Stop Competing with Unlimited Backups

You can’t compete with unlimited backup plans.

… and you shouldn’t try, because neither can anyone else.

Unlimited data backup plans, priced at some minimal fee of just a couple of dollars a month or around $50 per year, have been “a thing” for a while. The advent of cloud storage and the relatively low cost of such solutions made it so, but having even a shot at success selling a data backup service with unlimited storage for such a low price relied on being able to buy storage on a massive scale to drive the per-gigabyte price down, and this simply wasn’t possible for the vast majority of service providers.

 

The popularity of services like OneDrive, SOS and Monster Cloud made it appear to be a viable business model – they were all over the place, almost completely unavoidable, but other service providers couldn’t figure out how they were actually staying afloat with prices that low and storage ceilings that high, much less profiting. Sure, they throttle your bandwidth, limit the amount of data that can be transferred in a session, or refuse certain file extensions, but some of these services were still mind-bogglingly cheap.

 

We’ve always advised our service providers not to attempt to compete with companies offering unlimited plans for some absurdly low price. It isn’t worth it. Storage costs aside, you have overhead to contend with, too: other server hardware or rental fees, bandwidth, employees to provide support, office space rent, marketing efforts, etc. Making that back on just a couple of dollars per month per user is going to be difficult, if not impossible. The service you provide is more valuable than that, and so is your time.

 

So how did these companies justify continuing when the average user’s storage demands are rapidly increasing and the price doesn’t change to reflect that?

 

The answer is: they didn’t.

 

This month, multiple companies providing unlimited or nearly-unlimited backup plans for dirt cheap either killed those plans entirely, or drastically increased prices. One that charged about $4 per month for 1TB now charges $52 per month; another previously offered unlimited storage for $79.99 per year, but now offers 50GB for $44.99 per year. Even Microsoft’s own OneDrive has reigned it in – their free storage has dropped from 15GB to 5GB. If you need more space, you can pay $1.99 per month for 50GB, or $6.99 per month for 1TB and the Office 365 suite. They all came to the same conclusion we did: that unlimited (or virtually unlimited) storage plans for rock-bottom prices are just not viable long-term.

 

If you are currently trying to compete with these services, or considering basing your business plan on an attempt to compete with these services, please reconsider. We want you to succeed, and trying to compete with a dying business model isn’t the way to do it.