>You've got to love competition, but I wonder at what point Onedrive's race to the bottom in terms of pricing starts to impact Dropbox's valuation?
eh, I've looked into getting into this market, and the price I would feel comfortable with (at my scale... which is not large) would be around a penny per gigabyte per replication per month. 2 replications is about the minimum I'm comfortable with, so the $0.02 per gigabyte/month seems pretty reasonable to me, especially because the big players have access to some pretty dramatic economies of scale that I do not.
Hard drives are what, $150 per 4tb drive or so, to purchase? Figure that it's another $2000 for every 36 drives for a low-end motherboard and chassis; figure a 36 month life, to be conservative, and that's $5.50/month in capital. figure $200/month per kw usable. a hard drive is going to use 5-10 watts That's $1-$2/month per 4tb. so total cost is going to be around $1.88 per tb per month. Now, multiply by 2.2, as I'm going to have 2x replications and make each replication raid6, (10 disk stripes) so my cost is $4.14/month/tb If I'm charging $0.02 per month per gigabyte, that's $20/month per tb revenue. (Of course, this is all seagate gigabytes. It's more complex if you use GiB.)
That's plenty of margin. Now, this doesn't count over-subscription, and if you sell in 100gb blocks, not all of it is gonna get used.
Now, especially if you are letting users use this for more than just backups, you have per-account overheads like abuse handling.
But yeah, overall? from where I stand? the "race to the bottom" isn't even keeping up with hard drive prices. In a real "race to the bottom" someone at my scale wouldn't be able to make reasonable margins.
The biggest problem I see with the market is that most consumers don't need that much storage. I'm going to need a lot of customers to just fill my first 74 disk cluster. Then, if I let customers share the files, I'm going to have to deal with dmca bullshit, and I ain't doin' that for free.
eh, I've looked into getting into this market, and the price I would feel comfortable with (at my scale... which is not large) would be around a penny per gigabyte per replication per month. 2 replications is about the minimum I'm comfortable with, so the $0.02 per gigabyte/month seems pretty reasonable to me, especially because the big players have access to some pretty dramatic economies of scale that I do not.
Hard drives are what, $150 per 4tb drive or so, to purchase? Figure that it's another $2000 for every 36 drives for a low-end motherboard and chassis; figure a 36 month life, to be conservative, and that's $5.50/month in capital. figure $200/month per kw usable. a hard drive is going to use 5-10 watts That's $1-$2/month per 4tb. so total cost is going to be around $1.88 per tb per month. Now, multiply by 2.2, as I'm going to have 2x replications and make each replication raid6, (10 disk stripes) so my cost is $4.14/month/tb If I'm charging $0.02 per month per gigabyte, that's $20/month per tb revenue. (Of course, this is all seagate gigabytes. It's more complex if you use GiB.)
That's plenty of margin. Now, this doesn't count over-subscription, and if you sell in 100gb blocks, not all of it is gonna get used.
Now, especially if you are letting users use this for more than just backups, you have per-account overheads like abuse handling.
But yeah, overall? from where I stand? the "race to the bottom" isn't even keeping up with hard drive prices. In a real "race to the bottom" someone at my scale wouldn't be able to make reasonable margins.
The biggest problem I see with the market is that most consumers don't need that much storage. I'm going to need a lot of customers to just fill my first 74 disk cluster. Then, if I let customers share the files, I'm going to have to deal with dmca bullshit, and I ain't doin' that for free.