Here on planet Earth, data storage is getting cheaper every month. But in Mozy’s parallel BeanCounterEarth, it’s getting more expensive. Time to fork over, freeloaders!
What’s the deal?
Mozy’s excuse for raising prices is that people are storing a lot more information than they did in 2006. Therefore, with much regret, they have to raise prices: 50 GB will now cost $5.99/month, a $1 increase over the old unlimited plan.
Huh?
Back in 2006 the hot SATA drive was the Seagate Barracuda 7200.10, a 750 GB behemoth. Checking in at a mere 79¢/GB - $590 retail - it set a new price-performance metric.
Mozy backstory
In late 2006 Mozy - taking advantage of super-cheap disk storage - adopted unlimited storage for a fixed monthly fee. Those were the good old days.
Then in late 2007, the world’s largest independent storage company, EMC - who also owns VMware, Iomega and RSA security, among others - bought Mozy. On my own dime I used Mozy for Mac for 2 years before dropping it for non-performance in 2009.
And today?
Today you can buy a 2 TB SATA drive online for 3¢ a gig. Volume buyers can do better.
And that drive is not only faster, but more reliable and energy efficient. By any measure the disk drive folks have done an incredible job.
And because of that EMC’s Mozy can make even more money than ever just by buying new disks every year. But that isn’t enough.
The Storage Bits take
Inside a $16 billion company like EMC the Mozy business is hardly worth thinking about. EMC’s brass is used to 60% gross margins and revenues measured in billions.
But in consumer-facing businesses 60% gross margins are just not done. Even Apple - often criticized for high prices - gets by on less than 40%.
Consumer businesses get no respect inside most enterprise companies. When the quarterly business review gets to Mozy, it goes like this:
Designated stuckee: “Our Mozy revenue is up 7% and margins are up 8%! Score!”
CFO: “You still don’t amount to squat. Why are you wasting our time? I hate you!”
The technical solution is, of course, to lower infrastructure costs and provide innovative high-margin products to apply Advanced Margin Enhancement Technology: raise prices.
Welcome to the “free” market.
Comments welcome, of course. When asked, I now recommend Backblaze and Crashplan. Use online backup as a supplement to local backup.
