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Wednesday, July 26, 2006

Carbonite - unlimited online PC backup for $5/month

Carbonite Online Backup is a (relatively) new offering that Dmitry just told me about.

I'm intrigued by Carbonite's business model. Any time someone offers a flat fee service they must be making a ton of assumptions about average use, and in this case I'm guessing they must be betting on the average PC user having less than 27GB of data

Using S3 as a pricing guideline, and if you spread the cost out over a whole year, AND you figure the average user might need to upload/download the data just twice over a year, then $5/month would allow storing, on average about 27 GB perpetually.

27GB storage per month: 27GB * $0.15/GB-month = $4.05/month
27 GB transferred twice in a year: 27GB * $0.20/GB-transfers * 2 transfers /12 months = $0.90/month
Total costs for Carbonite: $4.05 + $0.90 = $4.95/month

Again, that’s 27 GB of data, not sure how many people have that much data, yet. The average user probably has more like 10-20 GB. Obviously Carbonite must have studied some statistics and must also have made much less wild-ass guesses than mine. I'd say they might be successful - their biggest challenge is most likely going to be to get enough volume to offset their investment in the system and overhead; cost of storage is NOT the issue.



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3 Comments:

  • This is a pretty good analysis of how Carbonite is working their pricing. It's a little annoying that their service isn't actually unlimited. This guy http://www.nickstarr.com/2006/06/29/carbonite-when-unlimited-is-limited/ says he was capped at about 100GB. With the price of storage being so cheap you would think it would be more sound from a business standpoint to just let the few filehoarders out there back up their 100GB and avoid the brand damage, although I have to admit that they're creating some of their own problems by branding their service as unlimited. I think that probably draws those users who have a huge amount of data to back up.

    By Anonymous Steve, at Thursday, August 17, 2006 8:04:00 PM  

  • Looks like the link got cut off.I'll try it this way.
    Carbonite Backup Review

    By Anonymous Steve (Again), at Thursday, August 17, 2006 8:06:00 PM  

  • Steve, thanks.

    Very interesting to see that their plan is for an average user to store 10GB. That makes for quite a nice profit...

    By Blogger Oskar, at Friday, August 18, 2006 7:19:00 AM  

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