With a claimed seven million users and Mega's MEGAsync Windows synchronisation client in public beta, Vikram Kumar, chief executive of the “privacy company”, is bullish about 2014.
Mega founder Kim Dotcom resigned as a director of the company last September to focus on his defence against extradition by the FBI and to pursue his political ambitions. Dotcom was expected to launch his new political party, called the Internet Party, at an event in Auckland on Monday.
However, he has had to cancel the so called "PartyParty" because it may breach New Zealand electoral laws.
The launch was timed to coincide with the second anniversary of police raids on his Coatesville mansion, north of the city which in turn led to the closure of his earlier online storage service MegaUpload.
This week Dotcom revealed the party’s logo via Twitter saying “We are going to make politics exciting.” He followed that up yesterday saying “The Internet Party is neither left or right. It's UP!”
In the shadow of Dotcom’s high profile antics, development has been continuing at Mega. Kumar said the Windows sync client will be launched out of beta soon.
“This brings Mega’s functionality in line with the majors such as Dropbox and includes browser access, apps (Android and iOS), and desktop sync,” he told ZDNet.
“A few things are still due such as apps for Windows mobile and Blackberry as well as sync clients for Mac and Linux, but Mega’s essential foundation for cloud storage is now in place.”
After that, Kumar said, the focus will shift to Mega’s flagged strategy of delivering secure communication products including messaging, voice, and video.
“These products will deliver on Mega’s promise of end-to-end secure encryption delivered in a way that is so easy to use that everyone gets security and privacy automatically simply by using Mega,” Kumar said.
“Given communication needs are many times that of storage, it is possible that by the end of Mega’s second year, it will be known more for its communication products than today’s storage services.”
While seven million users is an impressive number, Mega offers a free storage service for users of 50GB or less. Exactly how many paid users the company has is not known.
Kumar said registered users have uploaded 625 million files representing over 15PB of data.
A rough calculation would put that usage at an average of 89 files uploaded per customer with each customer using an average of just over 2GB, well short of the threshold requiring a paid subscription.
Kumar said such averages aren’t meaningful, particularly where the number of registered users keeps rising.
“Mega has a standard ‘long tail’ customer base where a small proportion of users have a large share of total storage while a large number have a small number/size of files.”
Typically, in a freemium type model, conversion rates of free to paid users are in the range of 1%-5%, he said.
“Mega’s business plans recognise this reality and we are therefore comfortable with the average number of files/storage used versus the paid subscription threshold.
“Besides, as third party apps using Mega as a backend storage platform and Mega’s own communication products roll out, the files stored directly by a person on Mega becomes a less important metric.”
Kumar said Mega’s focus is on user growth and “excellent customer experience” rather than revenue or profitability.
“As such, Mega is not cash flow positive currently. The company has sufficient funds in the bank to get it to profitability in line with the business plan.”
He said Mega’s first year has been “fantastic” and better than the expectations.
“And, best of all, Mega has only just started and so it’s easy to be optimistic about Mega’s second year.”
Mega has 11 registered shareholders the largest of which, with 30 per cent of the company, is MD Corporate Trustee Limited, controlled by Kim Dotcom’s wife Mona Dotcom.
Dotcom will not be able to stand for Parliament in New Zealand himself as he is a permanent resident, not a citizen.