EMC significantly changed the pricing of their Mozy Home backup service last week. They eliminated their unlimited offering and replaced it with two metered offerings. The first offering is $5.99 a month ($1 more than the previous unlimited offering) for 50 GB and one computer, or $9.99 a month for up to 3 computers and 125 GB of data. Customers that go over their allotted number of gigabytes pay $2 per month for another 20 GB.
This immediately set off a firestorm of complaints, over 900 of which (as of this writing) are shown here in this Mozy Community forum thread.
Is it “wrong” for EMC to do this?
EMC has to do what they have to do to make a profit. Yes, those who are currently backing up terabytes of data to Mozy would have to pay hundreds of dollars a month to stay there, and that seems like a ridiculous price jump. It also seems ridiculous to think that someone would store your TBs of data and expect to keep doing that for only $5/month! So my first reaction to the news was that I wasn’t surprised by EMC’s actions.
The previous business model of Mozy is similar to several other “unlimited” business models. Sell unlimited Internet access to thousands of people and hope that all of them don’t want to use it at once. Sell hosted websites with unlimited bandwidth and hope that most customers don’t get anywhere close to using it. The people in my office building have unlimited use of the water fountain, but we can’t all use it at the same time. The “unlimited” concept works when you get the 80/20 rule right. But sometimes you don’t, and things have to be adjusted.
I believe that Mozy’s new pricing is meant to drive the Terabyte customers away. They couldn’t possibly be expecting for their terabyte customers to pay $200/month to store 2 TB when they could get the “same” for only $5/month. There will be a mass exodus of those customers, which is exactly what I believe EMC wants. Many will go to their competitors and others (based on the posts in the forum) will buy local USB drives and back up to those.
Should they have done it with so little notice?
This is where I think EMC went wrong. When I did my first Mozy backup, it took me months to upload my 300 GB to them. (That same amount would now cost me roughly $30/month.) They need to give their larger customers a whole lot more than a few weeks to move. EMC is forcing these home users to either pay hundreds of dollars per month or cancel their account and have no backups while they upload to their next provider. This, in my opinion, is very uncool and will earn EMC a lot of negative brand equity.
Was this a smart move on EMC’s part?
Short version: I don’t think so.
Only EMC will know when the dust settles, but I’m not sure they thought about the ramifications of forcing their larger customers to leave them. People who have terabytes of data tend to be geeks like me. (I’m a movie buff, and I now have over 6 TB of personal data at home.) Geeks like me tend to have a bunch of people around us that ask us what we think. EMC says that it’s 5% of the customers that are forcing them to change their prices. Suppose each of the customers in that 5% have 10 friends they recommended Mozy to, and that these angry geeks now call everyone they recommended it to and tell them to move. That 5% suddenly becomes 55%. Their could be a serious snowball effect and a significant revenue hit for Mozy.
But then again, what do I know? The company that everyone seems in a hurry to move to (Carbonite) actually lost several thousand customers’ data. Instead of falling on their sword, they’re actually suing their storage array vendor as if it’s their fault! Carbonite, a company whose entire purpose for existence is storing customer’s backups lost their backups. And they’re trying to pass the buck to their storage array vendor! Why would anyone store their backups there? And people are choosing them over Backblaze or Crashplan because they’ve… been… around… longer…
Like I said. What do I know.
I still ultimately think this move (and the way it was executed) is not a smart one.