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How To Add 5.5 Petabytes and Get Banned From Costco

timothy posted about 2 years ago | from the you-need-the-executive-membership dept.

Businesses 273

concealment writes with this extract from GigaOm: "'We buy lots and lots of hard drives . . . . [They] are the single biggest cost in the entire company.' Those are the words of Backblaze Founder and CEO Gleb Budman, whose company offers unlimited cloud backup for just $5 a month, and fills 50TB worth of new storage a day in its custom-built, open source pod architecture. So one might imagine the cloud storage startup was pretty upset when flooding in Thailand caused a global shortage on internal hard drives last year. Backblaze details much the process in a Tuesday-morning blog post, including the hijinks that followed as the company got creative trying to figure out ways around the new hard drive limits. Maps were drawn, employees were cut off from purchasing hard drives at Costco — both in-person throughout Silicon Valley and online (despite some great efforts to avoid detection, such as paying for hard drives online using gift cards) — and friends and family across the country were conscripted into a hard-drive-buying army."

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Wow (4, Insightful)

taktoa (1995544) | about 2 years ago | (#41596559)

Unlimited storage for $5/mo? I have to get on this shit.

Re:Wow (2)

GeekWithAKnife (2717871) | about 2 years ago | (#41596591)

Unlimited storage for $5/mo? I have to get on this shit.

Website says $3.96/m for unlimited data. Something tells me this business model will not survive without some serious bandwidth limitations. After all, if you upload is limited to 100mb then you ability to (non commercially) fill Terabytes of data is limited.

Re:Wow (5, Insightful)

fuzzyfuzzyfungus (1223518) | about 2 years ago | (#41596893)

Unlimited storage for $5/mo? I have to get on this shit.

Website says $3.96/m for unlimited data.

Something tells me this business model will not survive without some serious bandwidth limitations. After all, if you upload is limited to 100mb then you ability to (non commercially) fill Terabytes of data is limited.

My impression(from friends who use them) is that they aim pretty heavily at home-user backup scenarios who are likely to be comparatively light users and have severely limited upstream bandwidth. They also don't do Big Serious SLAs and similar. Nor do they support things like backing up mounted NAS volumes or non Windows/OSX systems(I haven't check to see if the client is smart enough to recognize a mounted iSCSI device... It isn't exactly rocket surgery to distinguish a block device hanging from the Windows iSCSI initiatior from a block device hanging off the Intel whateverchipset SATA 2 port; but if you go with 'NAS = SMB/AFP" you'd miss it.

Still, convenient and cheap, if not as robust as solutions that cost more.

Re:Wow (2)

the_B0fh (208483) | about 2 years ago | (#41597107)

There was a photographer who wanted to backup terabytes of data, and they told him, sure. go ahead.

Ob python (3, Funny)

rossdee (243626) | about 2 years ago | (#41597389)

photography eh?

Nudge, Nudge, wink wink
Say no more

Re:Wow (1)

Anonymous Coward | about 2 years ago | (#41596641)

Unlimited for one device, and if you're offline for 6 months, they delete your data. They don't have offsite backup, so if you or their admins do a mistake.....you will have to reupload.

But if you just need a little bit extra security for your existing backup, they provide a good value.

Re:Wow (0)

Anonymous Coward | about 2 years ago | (#41597271)

...if you just need a little bit extra security for your existing backup, they provide a good value.

No, it is not "good value". You are better off just buying a cheap NAS and keeping it at your friend's place. Same level of safety as Backblaze provides and, if Backblaze charges $4 per month, a lot cheaper in the long run.

Re:Wow (0)

Anonymous Coward | about 2 years ago | (#41597615)

Your NAS will cost more than $4 in electricity per month.

Re:Wow (5, Interesting)

vlm (69642) | about 2 years ago | (#41596753)

Unlimited storage for $5/mo? I have to get on this shit.

Run the numbers. 50 TB a day sounds like a lot, if they've only got one customer. But they're probably got "a zillion" which would imply your very thin slice of the upload bandwidth is going to be choked to like a gig per day. The upgrade in my basement from (full) 1 TB drives to 2 TB drives took around overnight, less than 24 hours anyway, but over the net at a gig per day would be about 3 years to fully convert. Even if they're not limited I would have serious problems shoving more than 100 gigs/day thru my cablemodem, so thats at least 10 days.

Another interesting thing to analyze is $5/month is $60/yr, so subtract $5/yr for electricity to spin a drive, assume a drive lives 2 years (probably much longer) that means if you can buy a drive big enough to hold everything you want for less than $110, just stick a drive in your basement. Better bandwidth and latency too, I have gigE at home but only ten or so megs of cablemodem. $110 at tiger direct will get me 2 TB. So 2 TB is approximately the tipping point, use less and you're better off "self hosting" in the basement, use more and you're better off using their service (and they're likely losing money if you use more than 2 TB).

Also I'm curious if its "unlimited" like cellphone or internet access is "unlimited" in other words they'll cut you off if they're losing money on you.

House burns down? (4, Insightful)

PeterM from Berkeley (15510) | about 2 years ago | (#41596925)

A backup in your basement does nothing for you if your house burns down/gets flooded/has a catastrophic power surge/whatever.

Where else can you backup offsite?

--PM

Re:House burns down? (5, Funny)

philipmather (864521) | about 2 years ago | (#41597073)

I would say at your parent's house but this being slashdot that's probably not offsite.

Re:House burns down? (4, Interesting)

xaxa (988988) | about 2 years ago | (#41597201)

I would say at your parent's house

That's exactly what I've done. I set up some scripts to rsync data from my computer to a server in my mum's garage, and also the reverse.

That way, we both have important data (mostly photos) backed up off-site in different cities, and the photos are available to browse through a web interface.

but this being slashdot that's probably not offsite.

A friend went with an encrypted backup program, and set up more-or-less the same thing with another friend.

Re:House burns down? (1)

Albanach (527650) | about 2 years ago | (#41597149)

How about a neighbor. You could host a drive for them, they host one for you. Cheap wifi network connecting the drives to your networks. Encrypt everything you backup. You each have an offsite backup with reasonably fast connections.

Re:House burns down? (1)

YouWantFriesWithThat (1123591) | about 2 years ago | (#41597335)

yeah that is not a great plan to avoid having your data lost due to a natural disaster. flooding, wildfires, tornadoes, or hurricanes usually will not be localized to just your house in the neighborhood. off-site needs to be miles away at minimum, and ideally in another region.

Re:House burns down? (0)

Anonymous Coward | about 2 years ago | (#41597415)

There is a such a thing as a safety deposit box at the bank if you don't mind going there to swap a couple of HDD. While it is not up to date, it is better than nothing.

Re:Wow (1)

mrops (927562) | about 2 years ago | (#41596975)

I'm actually on CrashPlan which also offer unlimmitted, they haven't complained yet for about a TB of data. All you calculations are good, I have onsite backup as well, but I have digital photos of family/freinds for about the last 10 years which are about 150GB and then bought a 1080p camcorder about 4 years ago and that footage is already in excess of 500GB. So I really wanted an offsite backup to go along with backup on my NAS. 4 years of unlimitted storage costed me about $140 bucks. I am fortuante to have 7mbps uploads so the backup between 8:00PM to 8:00AM (my providers unlimitted usage hours) took about 20-25 days buy was done just fine. I tototally recommend it.

Re:Wow (1)

jeffmeden (135043) | about 2 years ago | (#41597291)

Unlimited storage for $5/mo? I have to get on this shit.

Run the numbers. 50 TB a day sounds like a lot, if they've only got one customer. But they're probably got "a zillion" which would imply your very thin slice of the upload bandwidth is going to be choked to like a gig per day. The upgrade in my basement from (full) 1 TB drives to 2 TB drives took around overnight, less than 24 hours anyway, but over the net at a gig per day would be about 3 years to fully convert. Even if they're not limited I would have serious problems shoving more than 100 gigs/day thru my cablemodem, so thats at least 10 days.

Another interesting thing to analyze is $5/month is $60/yr, so subtract $5/yr for electricity to spin a drive, assume a drive lives 2 years (probably much longer) that means if you can buy a drive big enough to hold everything you want for less than $110, just stick a drive in your basement. Better bandwidth and latency too, I have gigE at home but only ten or so megs of cablemodem. $110 at tiger direct will get me 2 TB. So 2 TB is approximately the tipping point, use less and you're better off "self hosting" in the basement, use more and you're better off using their service (and they're likely losing money if you use more than 2 TB).

Also I'm curious if its "unlimited" like cellphone or internet access is "unlimited" in other words they'll cut you off if they're losing money on you.

The number I am looking at is 50TB/day means 578MB/sec all day and all night (i am presuming there is some amount of day/night load curve). That's a lot of bandwidth for one organization.

But more practically, what are you doing to generate all that content? Even a serious photographer/videographer would be hard pressed to generate more than 10GB of backup-worthy content a day, especially not averaged over a whole week or month.

Re:Wow (2)

nedlohs (1335013) | about 2 years ago | (#41597593)

Everything is backup worthy when it's unlimited storage at a fixed price.

Re:Wow (5, Insightful)

wonkey_monkey (2592601) | about 2 years ago | (#41596851)

Who says Slashvertising doesn't work?

Re:Wow (1)

poetmatt (793785) | about 2 years ago | (#41596979)

They have some kind of cap/quota concept, as well as a maximum amount of transfer per a specific amount of time.

It's the not quite unlimited kind of "calling it unlimited anyway".

Can't they just... (3, Insightful)

grumpyman (849537) | about 2 years ago | (#41596573)

.. buy direct or maybe some wholesale? Is such deliberate effort worth the actual cost?

Re:Can't they just... (2)

oodaloop (1229816) | about 2 years ago | (#41596611)

Genius! I wonder why they didn't think of that?

Re:Can't they just... (2)

Zeromous (668365) | about 2 years ago | (#41596675)

Seriously. It was so bad the people who make the harddrives couldn't even buy them, from themselves at full price.

Re:Can't they just... (0)

Anonymous Coward | about 2 years ago | (#41596633)

It was at the time. The floods in Thailand did horrible things to the hard drive supply chain.

Re:Can't they just... (2)

Jumperalex (185007) | about 2 years ago | (#41596651)

Obviously the answers are no and yes. They are likely way to small to buy direct and 1) get a good price and 2) even be given the time of day.

Re:Can't they just... (4, Informative)

140Mandak262Jamuna (970587) | about 2 years ago | (#41596659)

There was flooding in Thailand. Factories were disturbed. This company tried to grab as much of the drives already in the pipeline as it could.

Re:Can't they just... (3, Interesting)

drinkypoo (153816) | about 2 years ago | (#41596695)

Costco gets such a good deal by buying in massive lots and handling distribution themselves that in fact it is worth the actual cost. I've been a costco customer off and on over the last few years and by remarkable non-coincidence I pretty much always check HDD prices. As well, I bought a pair of 1TB MyBooks when they were the big disk that Costco sold, and more recently I've bought a pair of 3TB GoFlexes. I like the return policy, and I can back up one disk to another (I disco the backup) and the two disks have very different service profiles so they're not entirely likely to die at the same time. And the prices were significantly lower than anything I could find from an even vaguely reputable retailer online.

People have complained bitterly about how hard it supposedly is to get a disk out of a MyBook, I've never tried. I don't know anything at all about how hard it is to get the disk out of a GoFlex enclosure. But I do know that until very recently the prices on these external disks were actually better than buying internal disks online. I know (personally) a couple of people who went that route when building a desktop system, decasing externals from costco.

Re:Can't they just... (1)

ZorinLynx (31751) | about 2 years ago | (#41596915)

Count me in as having done this. TigerDirect had a 3TB external drive for $40 less than the internals! It was an absolute no-brainer to buy it and decase it. Sure, there's no warranty, but it's worth the risk to save $40 since hard drives rarely fail and when they do it's usually after a few years when you should be retiring them anyway.

The case was a really shitty USB-only case, too, which was such a data bottleneck on the internal SATA drive that it would have been a colossal pain to use it as an external.

I'm guessing the external drives are sourced through different channels that for some reason weren't affected as much as the internal drives? Otherwise it doesn't make sense that the external would be so much cheaper when you're buying "more stuff".

Re:Can't they just... (5, Informative)

the_B0fh (208483) | about 2 years ago | (#41597131)

some hard drives (western digital, iirc) are now sold without the sata interface on the drive itself, for external models.

you rip it apart, and find out that you can't stick it onto a sata port...

They're a startup (0)

Anonymous Coward | about 2 years ago | (#41596763)

They're a start up. They're the little guys. So obviously there must be evil government regulations and taxes in place that work for big corporations but against them, had they gone that route. ...actually no, from TFA:

"Literally overnight," Budman told me, "... all the places we would go to get drives said, 'Sorry, we don't have any drives.'" ...However, when months passed and the situation only got worse â" some suppliers were offering 3TB drives that used to cost $129 for around $600...

I think they already tried, but that became unfeasible

Re:Can't they just... (0)

Anonymous Coward | about 2 years ago | (#41596911)

think you may have missed this line

"So one might imagine the cloud storage startup was pretty upset when flooding in Thailand caused a global shortage on internal hard drives last year"

Re:Can't they just... (1)

Transkaren (1925482) | about 2 years ago | (#41597053)

In that situation? No. They needed to buy 14 drives a day to maintain their storage increase rate; the companies they usually used were out of drives, and wholesalers were selling to the big box stores rather than their corporate customers.

Re:Can't they just... (2)

petermgreen (876956) | about 2 years ago | (#41597083)

There we floods in thailand which significantly reduced the supply of hard drives. Some vendors responded to this by imposing buying restrictions, some imposed caps on the number of drives that could be bought. Many did both.

You would think that vendors would try and get as much money as they can for their stock and to an extent that is true. However for something like hard drives the picture is more complicated. If someone can't buy a hard drive at a price they consider reasonable they won't buy the rest of the bits to build a PC either.

interesting. (1)

CimmerianX (2478270) | about 2 years ago | (#41596635)

How does that company stay in the black? Whatever, just goes to show how creative some people can be to get around an obstacle.

Re:interesting. (0)

Anonymous Coward | about 2 years ago | (#41596663)

Setting the bar pretty low for creativity there?

"Wow, drives from the usual suppliers are pretty expensive... why not pop down and buy a few from the store?"

"YOU CREATIVE GENIUS!"

Re:interesting. (2, Insightful)

Anonymous Coward | about 2 years ago | (#41596771)

There's a link in TFA to an older article about them starting up and how much it costs them to run their storage: apparently it costs them $94,563 for hardware, space and power for a petabyte over 3 years. That's about $0.0026 per gigabyte per month, so if users are charged $5 per month then they just have to gamble that the average user is going to use less than about 1.9 terabytes per month.

Obviously that doesn't include a lot of other stuff like wages, but you're still gambling that a user isn't gonna have more than a terabyte of data in the system, which doesn't seem like an unreasonable gamble for now.

;) Blablablah (0)

Anonymous Coward | about 2 years ago | (#41596653)

SWEET. And i'll start working on a rapidshare Right-Away!

What a bunch of douche bags (5, Interesting)

serviscope_minor (664417) | about 2 years ago | (#41596655)

Seriously, what a bunch of assholes.

So instead of doing the capitalistic thing and gouging with insanely high prices, the shops instead started rationing drives for a sane price so everyone could get a little bit of the very limited supply.

That was actually a really good thing to do. Instead of profiteering, they tried to make the best of a bad situation for everyone.

Then a bunch of dicks like this figure that they're more important than everyone else and that they should be able to get more than enyone else.

Selfish bastards. Nothing but scum.

After reading this I will not be giving them my money.

Re:What a bunch of douche bags (0)

lxs (131946) | about 2 years ago | (#41596779)

I agree that it's a pretty selfish thing to do, although I would probably have done the same in their place.
In a way they were lucky. There have been plenty of times and places where getting around rationing would get you shot.

Re:What a bunch of douche bags (3, Interesting)

iluvcapra (782887) | about 2 years ago | (#41597349)

I agree that it's a pretty selfish thing to do, although I would probably have done the same in their place.

The magic of Adverse Selection, when you discover the Golden Rule has a discount rate...

Re:What a bunch of douche bags (0)

mveloso (325617) | about 2 years ago | (#41596839)

Who are you talking about, BackBlaze or the stores?

BackBlaze did what they should have done: solve the business problem at hand. Does anyone know anybody that wasn't able to buy a 3TB hard drive at retail due to BackBlaze's purchases?

Re:What a bunch of douche bags (1)

jareth-0205 (525594) | about 2 years ago | (#41596885)

Does anyone know anybody that wasn't able to buy a 3TB hard drive at retail due to BackBlaze's purchases?

Err... how would you know?

Re:What a bunch of douche bags (4, Insightful)

serviscope_minor (664417) | about 2 years ago | (#41596945)

BackBlaze did what they should have done: solve the business problem at hand.

Ah, choice use of the word "business". That must mean that it's OK to suspend all morals as long as it's "business".

Basically no.

BlackBlaze did nothing. Do not pretentd otherwise by using the word "business" to hide the acts of individuals.

The _people_ at balckblaze figured that they they would be selfish and put their needs above the needs of everyone else. That's selfish, douchebaggy behaviour.

One that Costco, by not gouging with insane prices, wasn't engaing in.

Re:What a bunch of douche bags (1)

Anonymous Coward | about 2 years ago | (#41597067)

One that Costco, by not gouging with insane prices, wasn't engaing in.

You're confusing Costco with Mother Teresa. Costco has to consider "gouging" actions carefully because it has to worry about traditional/social media reactions, and their reputation as a low price house.

Costco didn't "gouge" because it wasn't in their business best interest to do so, not because they are nice guys.

Re:What a bunch of douche bags (4, Informative)

AlgUSF (238240) | about 2 years ago | (#41597187)

Honestly, I wouldn't think twice about doing the same thing. They are purchasing the drives, not stealing them. For "some reason" costco is buying them in lots where they can distribute them at that price. I guess they were just leveraging Costco and Best Buy's buying power to keep their business afloat.

Re:What a bunch of douche bags (0)

Anonymous Coward | about 2 years ago | (#41597801)

No, it is not what they should have done.

They should have tried to behave in an ethical fashion and negotiate purchasing from a supplier instead of causing a massive drain on a controlled source. Just because it's a "business problem" does not make their solution ethical in any way.

But America celebrates this type of bullshit from businesses so hey, raise a glass in toast to American entrepreneurial ingenuity!

Re:What a bunch of douche bags (2, Interesting)

Anonymous Coward | about 2 years ago | (#41596919)

Pretty much.

Besides that, anyone that thinks they can run a company with this business model and survive is a business moron, or a scam artist trying to make a quick buck. This is 90's dotcom level idiocy at it's finest. Unlimited storage for $5/mo? Unlimited bandwidth too I guess? Completely 100% unsustainable.

So I would expect slimy people like this to pull stuff like trying to scam more quantities of hardware than allowed. Getting friends and family to buy stuff? Uh, did you have them on payroll? I'm sure the IRS would like to look at their records.

Re:What a bunch of douche bags (2)

donatzsky (91033) | about 2 years ago | (#41597133)

Besides that, anyone that thinks they can run a company with this business model and survive is a business moron, or a scam artist trying to make a quick buck. This is 90's dotcom level idiocy at it's finest. Unlimited storage for $5/mo? Unlimited bandwidth too I guess? Completely 100% unsustainable.

Seems like it's you that's the business moron, as they're actually profitable. And until that $5M funding they got this year, they had been growing entirely through that profit. You can find all the details on their blog somewhere.
Also, they're not the only ones to do this. There's also CrashPlan (and others I assume) that offer essentially the same thing at about the same price.

Re:What a bunch of douche bags (1)

rudy_wayne (414635) | about 2 years ago | (#41597321)

I would be very suspicious of a company whose business model depends on them getting a bunch of friends and relatives to buy as many hard drives as they can from Costco.

WTF!!!

If BackBlaze is a legitimate company that needs a lot of hard drives, why can't they just buy them from the various distributors/wholesalers. Where do you think Costco gets their drives.

Re:What a bunch of douche bags (2)

nedlohs (1335013) | about 2 years ago | (#41597717)

It doesn't.

When there was a temporary disruption of hard drive supply chains, they noticed that external drives could be bought at costco for significantly cheaper than they could get internal drives from distributors/wholesalers. So they did.

And they get a bunch of free advertising on slahdot out of writing about it too.

Re:What a bunch of douche bags (2)

nedlohs (1335013) | about 2 years ago | (#41597695)

It's perfectly sustainable. Their customers will use more and more storage as storage prices fall, and coincidentally they'll be able to buy the additional storage to back it up since prices will have fallen for them too.

Yes they will lose money on some customers. As long as there are enough customers they make money on that's to cover it that doesn't matter. Every "all you can eat buffet" is making the same bet.

Re:What a bunch of douche bags (0)

Anonymous Coward | about 2 years ago | (#41596965)

Lol, free market.

Re:What a bunch of douche bags (-1)

rodrigoandrade (713371) | about 2 years ago | (#41597089)

Which is exactly why socialism doesn't work and never will.

Whenever you try to do something nice to help everyone and try to keep basic economic principles locked away in a cage (supply & demand, in the case), someone will game the system to their advantage.

Capitalism and modern economic theory trump all.

Re:What a bunch of douche bags (0)

Anonymous Coward | about 2 years ago | (#41597257)

What are you talking about? What happened was capitalism

They're minimizing cost (buying drives from Costco instead of their usual suppliers)

They're providing what the market wants (keeping their price at $5/month)

And these guys are apparently making profit, still growing as a successful start up, so in a way yes, capitalism does trump all.

There's no reason why the GP/OP being upset about them being "douche bags". This is simply another part of capitalism: the biggest douche bag usually to win. Nice guys finish last.

Capitalism was never about being "nice". It's about private ownership of capital, and profits. Nowhere does capitalism require people to be "nice"

Re:What a bunch of douche bags (2)

iluvcapra (782887) | about 2 years ago | (#41597461)

If Costco was a government entity this argument would make sense.

As it is Costco is a retailer; retailers are at liberty in an open economy to impose whatever conditions on a sale they please, buyers accept these conditions, and free exchange happens.

Costco's interest is in keeping as many customers as possible coming to their store, by maintaining an inventory at all times. If their entire inventory is bought up by CloudBackupInc on the first day, Costco is definitely hurt by that, because their business model only works by having as many customers as possible as happy as possible.

Capitalism and modern economic theory trump all.

Karl Marx couldn't have said it better himself.

Re:What a bunch of douche bags (3, Interesting)

Rob the Bold (788862) | about 2 years ago | (#41597173)

Seriously, what a bunch of assholes.

So instead of doing the capitalistic thing and gouging with insanely high prices, the shops instead started rationing drives for a sane price so everyone could get a little bit of the very limited supply.

That was actually a really good thing to do. Instead of profiteering, they tried to make the best of a bad situation for everyone.

Then a bunch of dicks like this figure that they're more important than everyone else and that they should be able to get more than enyone else.

Selfish bastards. Nothing but scum.

After reading this I will not be giving them my money.

The hard drive sellers weren't doing this altruistically. They made their call, figuring that rationing drives was the best for their businesses and best fulfilled their duty to their shareholders.

The cloud storage company also did what they thought best benefited their business and fulfilled their duty to shareholders/backers/etc.

It does not benefit us as individuals to assign a moral motive to the actions of a company. Whatever they do, it's for a business purpose. If it seems like one company is the good guy, it's just that that's what they think will help them return value to the owners. We must realize that they are all "selfish bastards" by the very nature of the capitalist system and not be fooled into personifying them.

What I've written in no way implies that you can't spend your money wherever you want -- or withhold it -- based on anything you want to base it on. If you find a business' actions to be detrimental to society or just contrary to your ideals, you can certainly boycott them. In fact, I think you should boycott if you feel as strongly as you appear to. In this way -- if you're not alone -- those actions on the part of the company may turn out not to benefit the shareholders and therefore force them to change.

You could also pursue a legislative approach, maybe convince your representatives that legal rationing is in the public interest. The US rationed commodities during wartime before, perhaps you can appeal that adequate storage space for all is sufficiently important for legal intervention.

Re:What a bunch of douche bags (3, Insightful)

serviscope_minor (664417) | about 2 years ago | (#41597587)

The hard drive sellers weren't doing this altruistically. They made their call, figuring that rationing drives was the best for their businesses and best fulfilled their duty to their shareholders.

they almost certainly could have got away with upping the prices by much more than they did. They chose strict rationing instead.

It does not benefit us as individuals to assign a moral motive to the actions of a company. Whatever they do, it's for a business purpose.

And this is a real problem. They're just Soylent Corporations: made of people. It's the people that act. Pretending otherwise is an attempt to justify imorral action.

Taking that to its illoigcal conclusion could lead to hypotheticals like

Well, it's OK that they kidnapped babies, murdered them and sold them for dog food. It was a really cheap source of meat and so the profit margin was immense. Excellent for business.

We must realize that they are all "selfish bastards" by the very nature of the capitalist system and not be fooled into personifying them.

No: you have been fooled into believeing that companies act independent of people. They do not and they cannot. Only people can act and people can and do choose to do immoral things for money.

The fact that they're doing it for money is no justification whatsoever.

Re:What a bunch of douche bags (2)

ColdSam (884768) | about 2 years ago | (#41597835)

That is a philosophical argument, not a practical one. Calling them "selfish bastards" is just shorthand for "companies who made business decisions I find to be unfair and/or evil." Then we treat them as such by punishing them in the market (or legal system). Without that feedback mechanism we would devolve into the baby killing/eating scenario posted by another.

Re:What a bunch of douche bags (1)

fermion (181285) | about 2 years ago | (#41597277)

Shortage of materials is really hard on direct to consumer retail. They have stock which they pay warehousing and interest on, so it usually costs more whcih consumers are are not buying at commercial quantities are willing to pay. OTOH, they expect for a retailer to have stock, so consumers get really annoyed and shop elsewhere. While commercials interests do have choice of where to buy product, most consumers are limited to retail outlets, and Costco is one of the few places that allow consumers a large discount. It is necessary for such retail outlets to do what they can to maintain stock.

This happened a while back in home improvement sector. The housing bubble was growing and had not burst. Everyone was building, and suppliers were having a hard time metting wholesale demand. Builders started going to retail outlets and buying all the supplies they could. Some retail had to limit quantities so that consumers would have selection. The idea was,IIRC, that if selection was not available they would go somewhere else.

One way for a commercial interest to protect themselves is to lock in supplies. Southwest did this with jet fuel and it gave them a competitive advantage for a number of years. Apple did this with several components and it has give then a competitive advantage. Sometimes firms just do not have the ability or courage to plan ahead, and they blame other people.

Re:What a bunch of douche bags (1)

tlhIngan (30335) | about 2 years ago | (#41597697)

Shortage of materials is really hard on direct to consumer retail. They have stock which they pay warehousing and interest on, so it usually costs more whcih consumers are are not buying at commercial quantities are willing to pay. OTOH, they expect for a retailer to have stock, so consumers get really annoyed and shop elsewhere.

Not to mention that this was also during the busy holiday season, to hard drives were going to sell no matter what as they got gobbled up as presents. Costco decided it would be better to serve the interests of its customers by rationing the quantity so more harried shoppers could get them than to simply let them go and replace the inventory with other stuff.

Customer service is an art - it can involve giving up immediate profit for longer term profit, as well as angering the few to please the many. PC stores often limited sales to "1 per customer per day unless buying a PC" so they'd have sufficient stock for their PC buyers (and builders - that one hard drive may allow them to sell a motherboard, CPU, graphics card, case, power supply, etc...).

It's a problem faced by toy stores every year - insufficient stock of the year's hottest new toy. And Apple has encountered rioting when the rules weren't followed (forcing them to enforce a world wide 2-per-customer-online-reservation system).

Got an in-demand item that's rapidly running out of stock? You could raise prices, let some scalper do it for you, or try to limit so more people have the opportunity to buy. The former is usually unattractive (especially if the price was announced beforehand) and can be seen as gouging. Scalpers aren't the kind of customers you want - the thought of profits would easily get them to outshove their way in any lineup - waiting in line a week before release is nothing compared to the profit of buying up the entire stock and selling it at grossly inflated prices (in other goods, good ROI). The latter isn't great for customers (there can be very legitimate reasons to buy more than 2).

Heck, black friday sales - scalpers are easily the ones who can wait all through wednesday night and thursday for buying some hugely discounted item and reselling (though fortunately for everyone, the items on heavy discount are typically stuff that are outdated).

Re:What a bunch of douche bags (0)

Anonymous Coward | about 2 years ago | (#41597397)

Well, they figured out that they need those drives, and they were willing to expend an increased effort to acquire them in an open marketplace. Maybe they thought they were "more important", but they didn't just sit there with a sense of entitlement and wait for somebody to fulfill it, they actually did something about it. I don't have any problem with that.

Re:What a bunch of douche bags (1, Insightful)

roman_mir (125474) | about 2 years ago | (#41597403)

That was actually a really good thing to do. Instead of profiteering, they tried to make the best of a bad situation for everyone.

- no, it was a stupid move by Costco. They got exactly what was expected to happen with this:

Then a bunch of dicks like this figure that they're more important than everyone else and that they should be able to get more than enyone else.

What Costco should have done (what is the correct thing to do) is to maximise efficiency in the market by raising the price to the level where the customers who truly needed the drives for productive reasons would be still willing to buy them, while those, who are not being as productive with the new drives would just have to wait.

It's the same exact thing as rationing, except it basically queues up the people who need the drives by priority, and those who need the drives most would buy them at a higher price, because those drives even at higher prices would be a justified purchase, because it would make the buyers more productive.

Those who are not being as productive with the drives wouldn't be able to justify the purchase at higher prices and would just wait until the prices come down.

Re:What a bunch of douche bags (0)

Anonymous Coward | about 2 years ago | (#41597599)

No, it was a smart move by Costco, AND by BackBlaze.

Costco bought the drives at a previously negotiated low price. They would be making profit even if they sold at their price. Costco had a competitive advantage (they could sell their drives at a lower price while still making profit), so they took advantage of it

The BackBlaze guys saw an opportunity to gain competitive advantage in their field, and they took action.

Both companies provided things consumers want (Costco: cheaper drives, BackBlaze: $5/month backup service) while making a profit.

The result shows: both companies are still here today. Costco's stock was higher than it was a year ago, with projected higher revenues.

What Costco should have done (what is the correct thing to do)

What Costco should do is for Costco to decide. You know, self determination and a right to their own property, the foundations of all other rights and freedoms?

Re:What a bunch of douche bags (0)

Anonymous Coward | about 2 years ago | (#41597463)

Someone please +1 the parent on my anonymous behalf. My first impression: why is slashdot even posting about such ass-o-holic behaviour patterns?

Re:What a bunch of douche bags (1)

0123456 (636235) | about 2 years ago | (#41597607)

That was actually a really good thing to do. Instead of profiteering, they tried to make the best of a bad situation for everyone.

Uh, no. It would be a really stupid thing to do.

Raising prices means that people who don't really need a drive right now wait for prices to drop, so the users who are willing to pay the higher prices to fulfill real needs can still buy theirs. Rationing means that a company which needs drives today in order to grow its business can't buy them because they're being sold below market price to Joe Sixpack who wants a bigger drive to store more downloaded pr0n.

Re:What a bunch of douche bags (1)

Theovon (109752) | about 2 years ago | (#41597619)

You now have a new fan. I wish more people thought like you and considered what they SHOULD do, ethically, in priority of what's merely LEGAL (or not legal as the case may be). If more people thought like you, then we'd have fewer stupid laws restricting everyone's freedoms on the basis of the selfishness of a few. Thank you for existing and having the willingness to point out that just because something's allowed doesn't mean it's right or doesn't have consequences for other people.

Re:What a bunch of douche bags (0)

Anonymous Coward | about 2 years ago | (#41597719)

yup, should have fucked their customers, employees and shareholders and gone bankrupt.

Skip the blogspam (4, Informative)

maztuhblastah (745586) | about 2 years ago | (#41596667)

Hear the story direct from Backblaze [backblaze.com] (bonus: goes into more detail).

Re:Skip the blogspam (1)

AlgUSF (238240) | about 2 years ago | (#41597207)

I like how they link to the article about how they build up their pods. Really cool info for the novice storage builder trying to put something similar together for their small enterprise. Enough information to get you going, enough redacted so that you actually have to DIY.

I don't get it (4, Interesting)

JobyOne (1578377) | about 2 years ago | (#41596701)

I'm confused. Was Costco selling these drives at a loss or something, just to get people in the door?

I can't think of many good reasons that they would look at customers coming in and buying assloads of their merchandise and say "NO! Get out of here and don't buy stuff from us ever again!"

Re:I don't get it (5, Insightful)

xlsior (524145) | about 2 years ago | (#41596791)

Many companies reserve the right to limit quantities. Making one customer happy by selling them every drive in stock means ticking off hundreds of others that wouldn't be able to buy the single drive they need.

Re:I don't get it (2, Informative)

Anonymous Coward | about 2 years ago | (#41596963)

Maybe they just wanted to prevent racketeering: a company buying up a temporarily rare commodity (making it even rarer) and reselling at a huge mark-up. Maybe Costco thought this unregulated free market needed some self regulation to help it remain healthy.

Re:I don't get it (4, Insightful)

Anonymous Coward | about 2 years ago | (#41596805)

I'm confused. Was Costco selling these drives at a loss or something, just to get people in the door?

I can't think of many good reasons that they would look at customers coming in and buying assloads of their merchandise and say "NO! Get out of here and don't buy stuff from us ever again!"

A valid question, but one which some logical thought should provide an answer to... I'd suspect Costco prefers to have many content customers (a customer who ends up at an empty shelf every day is going to go elsewhere, potentially even for other stuff) than one deliriously happy customer. The profit margins on those things are going to be minor anyway, so its not Costco were raking in the profits by selling all their harddrive stock. Presumably, this added profit did not offset all the other customers being unhappy with Costco that they couldnt buy they harddrives they advertise.

Re:I don't get it (1)

PPH (736903) | about 2 years ago | (#41597243)

'd suspect Costco prefers to have many content customers (a customer who ends up at an empty shelf every day is going to go elsewhere, potentially even for other stuff) than one deliriously happy customer.

Costco is notorious for getting a container load of something and putting it up on the shelves until it runs out. And then never carrying it again.

Supposedly, they cater to small businesses who need a consistent supply of certain items. Think of a restaurant putting something on their menu based on ingredient availability. Unless its their Kirkland brand whatever, their selection is inconsistent.

Re:I don't get it (5, Insightful)

localman57 (1340533) | about 2 years ago | (#41596845)

I'm confused. Was Costco selling these drives at a loss or something, just to get people in the door?

There's a difference between selling at a loss, and selling below market value. For instance, if Costco signs a contract for delivery of a million drives in Feburary, the factory floods in March, and Costco gets delivery in April, their drives are suddenly worth substantially more. They can either sell them at the previously intended prices, or they can raise prices to market value. In the first case they still sell them for more than they paid, but less than market value. In the second case, they take the customer for all they're worth, and make much more profit. Rationing is the only way the first one can work, otherwise someone will come in and buy all your drives, then resell them at market value.

Re:I don't get it (3, Funny)

BetterSense (1398915) | about 2 years ago | (#41597385)

Unless the drives are copyrighted!

Re:I don't get it (1)

wisnoskij (1206448) | about 2 years ago | (#41596869)

It was not that the drives they had were more expensive for them to purchase it was just that they could not get very many of them.
So they limited how much each person could buy instead of profiteering and raising prices so only the rich could afford them.

Re:I don't get it (1)

ZombieBraintrust (1685608) | about 2 years ago | (#41597011)

Costco likely purchsed the drives when they were available in bulk at low prices prior to the shortage. The clowd providers were buying drives as needed. Keeping inventory low.

Re:I don't get it (1)

Actually, I do RTFA (1058596) | about 2 years ago | (#41597541)

I'm confused. Was Costco selling these drives at a loss or something, just to get people in the door?

There was a delay in the pipeline. Like, all factories shut down due to natural disaster (Tsunami). Therefore, Costco (due to buying in bulk) and a few others had a supply that had to be stretched. Instead of raising rates to match the new supply with demand, they imposed caps on how many each customer could buy. Many other companies did so as well (Newegg for instance).

Now that the supply line has been fixed, you can go buy a shitton of drives at Costco, as I believe this company was doing before.

Basically, this is like complaining that the local grocery store won't let you buy all the water you want after a hurricane (esp. if you plan on reselling it.) when they are keeping prices low as a humanitarian gesture.

Re:I don't get it (1)

petermgreen (876956) | about 2 years ago | (#41597543)

There was a flood in thailand, this meant supplies of hard drives were massively reduced. Stockists of hard drives were left with three choices.

1: Crank up the price until demand came down to meet supply
2: Put restrictions in place to stop one customer buying too many, possiblly in combination with smaller price increases.
3: Do nothing

Whichever choice is taken some customers will be pissed off. Choice 1 is likely to be the most profitable if only hard drive profits are looked at. However if people consider hard drive prices unreasonable they may decide to hold off on their computer build/upgrade and hence hold off on buying other parts too. They may also feel bad about the supplier in general causing them to take unrelated buisness elsewhere.

Choice 3 means they won't have any hard drives to sell pretty quickly which will piss off customers who really needed a hard drive right now and will also make it very difficult to sell any other computer components.

So that left choice 2.

How smurfy of them (0)

Anonymous Coward | about 2 years ago | (#41596713)

They smurfed those hard drives, but obviously they didn't distribute the workload over a large enough number of individuals.

Maybe they could have hired meth addicts, but the annual cost of the costco membership would act as a pretty significant rate-limiter.

3.96$ a month... (3, Interesting)

geschild (43455) | about 2 years ago | (#41596789)

... is pretty cheap (5$ is for a family account). But as BB itself says, you can only upload 2 to 4 GB per day.

They should be making a mint on that service! They use home-brew storage pods and are very open about it, too!
http://blog.backblaze.com/2011/07/20/petabytes-on-a-budget-v2-0revealing-more-secrets/ [backblaze.com]

Anyway, be careful to read all the gotchas:
http://www.backblaze.com/remote-backup-everything.html [backblaze.com] (hint: 'everything' for a certain definition of everything. No virtual machines, ISO's and NAS storage by default.)
http://www.backblaze.com/internet-backup.html [backblaze.com] (hint: not all OSes are treated equally.)

(Full disclosure: I work for a storage manufacturer that sells de-duping storage so I think I understand their cost model a bit better than most.)

Re:3.96$ a month... (0)

Anonymous Coward | about 2 years ago | (#41597589)

With the push of their latest client, (mainly it does chunking of files rather than the entire file in one go) they lifted the restriction on file types and locations. It will now backup anything and everything it detects as local storage.

Internet Archive (4, Informative)

dr_leviathan (653441) | about 2 years ago | (#41596929)

Several months ago I met someone from the Internet Archive (archive.org) who told a similar story. The weren't expanding their storage at the same pace as Backblaze, but they were also resorting to shucking external drives to build their rack mounted servers.

All on consumer grade drives..... (0)

Lumpy (12016) | about 2 years ago | (#41596959)

If you thin your data is safe with these people..... Well you deserve to get what you pay for.

Re:All on consumer grade drives..... (0)

Anonymous Coward | about 2 years ago | (#41597103)

What makes you think "enterprise" grade drives are any better. Does parting with more of your dollars make you feel better?

Re:All on consumer grade drives..... (-1)

Anonymous Coward | about 2 years ago | (#41597147)

I love the armchair wanna-be IT people here. Come on back when you have actually TOUCHED corporate grade hardware little boy. And move your tricycle, it's in the way of the men that actually know what we are doing.

Re:All on consumer grade drives..... (1)

silas_moeckel (234313) | about 2 years ago | (#41597309)

If your using hardware raid it gets important mostly the time limited error recovery bit to keep raid cards from failing out the drive while it's trying to recover a block, Backblaze is not use hardware raid so it's a non issue. They are a scale wide not deep strategy. When one persons restore can be spread around a dozen servers your limiting factor quickly becomes there internet speed.

Re:All on consumer grade drives..... (3, Funny)

oodaloop (1229816) | about 2 years ago | (#41597513)

I think I had a time limited error recovery bit trying to read that post.

Re:All on consumer grade drives..... (3, Informative)

ledow (319597) | about 2 years ago | (#41597155)

Yeah. I'll bet they're not even using oxygen-free SATA cables either.

Who cares what they store it on? What's important is it adequately checked for consistency, and what are the backups like. Everything else is detail.

Guess what. Google bought off-the-shelf computer gear for years and some datacentres run things without "datacentre grade" cooling. They don't suffer because a) they do it properly (i.e. not RELY on those drives to never fail) and b) nobody notices because the service is still more than good enough.

"Enterprise"-grade drives are just warrantied for longer. It doesn't mean they won't die just as quickly. Like "RAID"-grade drives - same drive as every other one on the production lines.

It's like saying you can't use Intel Mobile chips in a datacenter. It might not be your first choice, but provided they fulfil all their service obligations (which includes response times, failover, etc.) then who notices and who cares?

Every single server I've ever installed used "consumer grade" drives. Every single desktop I've ever installed used "consumer grade" drives. Failures are actually FAR BELOW any stated MTBF and, who cares, because it takes seconds to replace and DOES NOT AFFECT THE OVERALL SERVICE for the user. And no-one I've worked for has ever lost data because of a drive failure. Ever. Even when servers have all but caught fire.

Re:All on consumer grade drives..... (1)

Omega Hacker (6676) | about 2 years ago | (#41597171)

Any even marginally architected system can deal with disk failures, and indeed *must*. The difference between using masses of consumer disks and a few enterprise disks is that while a failed consumer disk in a massive pool might cause a slight slowdown spread across all of your users, a failed enterprise disk in a business-critical system can ruin your whole day even if you *don't* lose any data. Remember how Google just lets hardware die and replaces it on repeated passes through the datacenter? Same thing.

Re:All on consumer grade drives..... (2)

prestonmichaelh (773400) | about 2 years ago | (#41597327)

You should read on how they build their systems. One of the ways they keep costs so low is using consumer grade hardware with the idea that it will fail. In general, consumer grade hard drives have about the same failure rate as "enterprise grade", they just usually have lower transfer rates. When your clients are syncing over 768k DSL uploads or even 3-5 Mbps cable upload speeds, hard drive speed is not going to be your bottleneck.

They actually have a guy whose job it is to just go around a day or two a week through their data center and replace the dead drives. Due to the redundancy they built into their systems, a drive failure isn't a big deal or really unexpected.

Re:All on consumer grade drives..... (0)

Anonymous Coward | about 2 years ago | (#41597459)

intreasting, I buy consumer grade drives with a 5 year warrenty, the enterprise drives come with a 1 year warrenty. Guess the manufacturers expect the enterprise ones to fail more frequently (based on the small numbers 96 drives, no failures I've dealt with 10k RPM SATA [WD consumer] drives are *more* reliable than the equivalent 10k RPM SAS enterprise drives as supplied by SUN (32 drives, 5 failures).

Re:All on consumer grade drives..... (1)

the_B0fh (208483) | about 2 years ago | (#41597577)

Apparently you believe:

a) they store only one copy of your data
b) that "enterprise" hard drives are some how better quality

Here's a hint: http://lmgtfy.com/?q=google+hard+drive+report [lmgtfy.com]

Makes no sense (1)

rudy_wayne (414635) | about 2 years ago | (#41597167)

The whole concept of online file storage makes no sense. Especially for consumes and especially in the U.S. where speeds are slow and costs are high. Getting your data into the "cloud" is extremely slow due to the fact that all ISPs severely restrict upload speeds. Then, once you finally get it all uploaded, getting it back will be difficult, even if you are fortunate enough to live in an area with decent speed, because you are probably one of the many millions of people whose only choice for broadband internet is the local cable monopoly, which means you probably have a monthly bandwidth cap, so good luck downloading all that data that will use up 2 or 3 months of your allowed quota.

Or you could just buy a couple of 2 or 3 TB drives and be done with it.

Re:Makes no sense (2)

prestonmichaelh (773400) | about 2 years ago | (#41597299)

It actually makes good sense as part of a complete backup system.

What happens to your data when your office/house/whatever with the 2 or 3 TB drives burns down with them in it, or someone breaks in and steals your desktop and the USB drive you left sitting on top of it?

Depending on the circumstances, I usually recommend RAID of some kind if possible, a USB/External Hard Drive on-site, and then some kind of off-site backup.

If your internal drive dies, if you had RAID, you just replace the dead drive. If no RAID, then you restore from your External backup. If you had a fire/theft or other major loss, you restore from web/off-site. In the case of BackBlaze, they offer 3 restoration options, included zip download of files, or FedEx thumb drive or external drive for additional cost.

Free Advertising! (1)

trevc (1471197) | about 2 years ago | (#41597197)

Come try it out!

Banned at Best Buy (1)

hoboroadie (1726896) | about 2 years ago | (#41597427)

More of a feature than a bug.

Compression anyone? (0)

Anonymous Coward | about 2 years ago | (#41597675)

Compression anyone?
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