So Very Uncool

The only true currency in this bankrupt world is what you share with someone else when you’re uncool.

The Hidden Meaning in Pricing

Bitcasa is a company that has angled to be a Dropbox competitor. Their hook? Unlimited Storage for $99/year. This week, that deal is no more. Now the same storage costs you $999/year (or $99 monthly if you go month to month). Over 10x the cost for the same thing.

A while back, I went apoplectic when Mozy moved from $5/month pricing to a variable rate that would’ve jacked my prices up 2,222%.Why would a company do this? The answer is, in my opinion, sometimes it’s because they want to exit the consumer market. It’s a passive aggressive way of getting rid of your most unprofitable customers. In Mozy’s case, they were acquired by EMC whose enterprise storage offerings are most assuredly not aimed at a cost friendly market. EMC doesn’t want the $5/month Carbonite, CrashPlan, or BackBlaze customers. Jack up the prices to insane levels and home users leave. Sure, Mozy offers a home plan of 50 GB for $6/month. CrashPlan, Carbonite, and BackBlaze all offer unlimited backup for $5/month. It’s like Wendy’s, Burger King, and McDonald’s all selling a $3 burger and Steak ‘n Shake decides to sell one for $350. The message is “We don’t want you as a customer but if you’re dumb enough to pay it, we’ll take your money …”

Is the same true for Bitcasa? I’m not certain. 98% of their customers (including me) aren’t using anywhere close to 5 TB of storage and 92% aren’t even using 1 TB, so what’s the deal? I suspect it’s to bring them closer to Dropbox’s pricing plans. They do offer 1 TB for $99 which is far more than Dropbox’s 100 GB for the same price. The only problem is that their technology is not as fluid as Dropbox’s. If I upload a large file in Dropbox, the bandwidth is throttled so it doesn’t make my Internet connection unusable. On Bitcasa it consumes all my outbound data until the file is loaded. The syncing seems to go on forever even when a file is done loading. I could go on and on. I tolerated the very rough edges of their technology because unlimited storage was a good deal that no other competitor offered. That deal made one overlook the immature implementation of their software but now this becomes much harder to ignore.

Passive aggressiveness is not a good strategy in life or in business. If you want to exit a market, do so with conviction. Had Mozy said that they were changing course to become an enterprise storage offering after the EMC acquisition and that they would cease offering unlimited home backup at any price, I would’ve respected it. Same for Bitcasa … tell me you want to more directly compete with Dropbox and that means ending the unlimited plan. Unlimited storage at $1,000/year is a price that no individual consumer will pay.

Even though I’m grandfathered in, I will likely stop using the service because I now no longer have faith that they really want me as a customer or that they’ll continue to be around much longer.