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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  • 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 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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