Why that cheap 'lifetime cloud storage' deal might cost more than you bargained for

Some companies are offering a large amount of data storage for very little money. What happens to your data if they go out of business?
Written by David Gewirtz, Senior Contributing Editor
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In small amounts, cloud storage is fairly inexpensive. You can even get a few gigabytes of free storage with most office plans. But once you start to grow your cloud storage needs into the terabytes, the dollars begin to add up.

For example, I use Apple's 2TB iCloud plan at $10/month. I also use Google Drive for cloud storage. In order to house my company's 57TB of data, I had to sign up for Google's Enterprise plan. For now, that costs $100 per month. Google has said that pricing will go up, but they haven't published what the increase will be for Enterprise plan customers. It's not a nice feeling to know you're going to get charged more, but to have no idea how much more.

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All that said, there is a way to get really inexpensive backup. All you have to do is look around for some deals. I found three that offer 5-10TB with a single 1-time lifetime purchase. Sound too good to be true? These offers probably are.

In this article, I'll deconstruct what I could find out about each of these three plans. After that, I'll share with you my recommendations, along with the caveats you should consider before giving up your bucks for a plan that seems too good to be true.

Degoo Cloud

Let's start with Degoo. I found it on a marketplace for all sorts of intriguing offers. Here, the marketplace is offering a 10TB lifetime storage plan for $99. As long as you access your account once a year, it will remain active.

Screenshot by David Gewirtz/ZDNET

It's not a bad deal, especially since the regular prices published on the Degoo site are considerably more expensive.

Screenshot by David Gewirtz/ZDNET

So who is Degoo? The company's About page says it's located in Sweden. Seriously. That's about it. There's virtually no content on the About page about Degoo. Disturbingly, a Google search for Degoo shows this:

Screenshot by David Gewirtz/ZDNET

I don't know about you, but Fake Storage Solutions, Inc. doesn't inspire confidence. More to the point, while the company has 1,221 Google reviews with a 4.6 average, a whole bunch of the reviews presented were one-star reviews with complaints. To be fair, there were also a substantial number of five-star reviews.

There are two other data points for Degoo. First, PitchBook has a profile showing the company with 11 employees and a $450K investment in 2017. Clearly, that's not enough to keep the company running all on its own; but for a cloud services company, it's enough to provide seed money.

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The second interesting indicator is a Google profile on the company. Google did a case study on the company, although it's not clear when the write-up was published. Interestingly, this tells us that Degoo is using the Google Cloud for storage and it has nine million users.

So, on one hand, the company does seem to be real despite the "Fake Storage" search result. But here's a simple bit of math: Google charges $0.020 to $0.023 per month, per year. A terabyte is 1,000 gigabytes. Multiplying 1,000 gigabytes times 10 (for 10GB storage) times $0.20, we find that Google's price for 10TB is $2,000.

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Clearly, $99 for 10TB is not sustainable. My bet is that storage vendors offering unlimited storage are doing the same calculus that health clubs do when they sell you a membership. It's betting that its customers won't fully utilize the resources they're paying for.

Even so, Degoo's unlimited deals don't come close to covering their costs for storage. Keep that in mind as we move on.

Prism Drive

Next up is Prism Drive. Here, we have a deal for 10TB for even less than Degoo. Found on another marketplace site, Prism Drive provides 10TB of lifetime storage for $89.99. Revenue from the marketplace sites selling these products generally comes from direct product sales, affiliate commissions, and partnerships with content creators.

Screenshot by David Gewirtz/ZDNET

As with Degoo, Prism's regular pricing is substantially more expensive.

Screenshot by David Gewirtz/ZDNET

My initial web search didn't turn up a Fake Storage company for these folks, but there was a Reddit thread where a participant who apparently lives near the posted address for the company in Santa Ana, CA says it's a virtual office, with no permanent tenants. That's essentially hearsay, but it's worrisome.

Then, there's the Trustpilot rating of 1.3 out of five. The leading review is "This is absolute crap."

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There is no About page. WHOIS provides no identity, other than showing that its site is a SquareSpace-based site. I found no details about what storage infrastructure Prism Drive uses. I also looked on LinkedIn for anyone who listed their employer as Prism Drive (or PrismDrive). No joy. Zero listings. What I did find was a ton of affiliate listings on tech websites hawking PrismDrive.

So there's that. On to our third and final company.

Polar Backup

Polar Backup is another storage plan being promoted by yet another deal site. This time it's only 5TB lifetime storage for $99. But still, it's lifetime storage.

Screenshot by David Gewirtz/ZDNET

This is heavily discounted from Polar's regular price for 5TB of lifetime storage at $675.

Screenshot by David Gewirtz/ZDNET

Let's continue our game of "Who are these folks?" The company doesn't post an address, but it does list two phone numbers, one with a London exchange and the other with a New York City exchange.

Despite appearing to be either a New York or London company, the company seems to be from Helsinki, Finland because the Governing Law clause of the site's terms and conditions says, "Any dispute related to the use of these pages will be settled by the district court in Helsinki, Finland." This tracks with a vaguely ranty Medium post claiming "Polar Backup is a scam," by a user named Noah Halstead.

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The domain for polarbackup.com is registered via Amazon, which may imply Polar Backup is using Amazon's storage infrastructure.

This is purely speculative, but Amazon offers a low-price, cold-storage (meaning, rarely accessed) service called Glacier. It would stand to reason that a storage service built atop AWS Glacier might be called Polar Backup. Amazon's S3 Glacier tier charges very low prices for uploads into storage. It's considerably more expensive to retrieve. That said, Polar might be able to support the unlimited business model if most users don't try to do many retrieves.

Another clue that Polar might be using AWS for infrastructure is the mention of AWS compliance on the company's GDPR page. Polar Backup is listed in Crunchbase, but with no details other than it may have an estimated 11-50 employees.

That's it. That's all I could find.

So, are these rip-offs?

Not necessarily. But I do have concerns:

The business model isn't viable: Offering unlimited storage using cloud infrastructure providers like Google and Amazon incurs monthly costs. Unless these companies own all of their infrastructure, there's going to be a one-time income with constant costs. Even owning infrastructure wouldn't cover the power bill. All told, this isn't sustainable.

If the vendor were huge, like an Amazon or a Google, and they offered a loss leader, that might make sense. But these are likely much smaller companies, and probably can't handle the monthly nut this would require.

Companies aren't transparent: We don't know who these companies really are. At all. What funding do they have? How many employees? Where are they located? Are they making enough money to support the promises they're making? We know none of that.

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Terrible reviews: All of these vendors have many terrible, terrible customer reviews. That's not a good sign.

But are they rip-offs? Are these vendors creating these deals and businesses with the express purpose of stealing from the folks who use them? I don't know, maybe not. That said, the vendors in question are also probably not going out of their way to build sustainable trustworthy businesses.

And really, that's my concern for you. These companies are offering a large amount of data storage for very little money. What happens if they go out of business? What happens to your data?

What could possibly go wrong?

I can't tell you whether or not these companies are rip-offs. But, they do have some structural concerns that make their offers a bit too good to be true. I did reach out to each company and gave them the opportunity to comment. As of publication, there have been no responses. 

So what could possibly go wrong? Well, the most obvious is that the company closes and you lose access to your data.

Let's say the company was legitimately started, but the founders just can't build it into a sustainable business. They're out of money. They need to get the hell out of Dodge.

When it comes time to close down, they might or might not be able to give their customers much notice. If you get a month's notice of the company closing, and you have a high-speed connection, it might be possible to pull all your data back down from the cloud in time. Not fun, but doable. That's if you get any notice, and if you don't have to battle every other user trying to pull massive amounts of data off their servers at the same time.

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Given this disturbing scenario, is it worth taking the chance with all your data? That's what you have to decide. Is it worth it?

Do you think these services are worth the risks? Let us know in the comments below.

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