Creeva's World 2.0: Swapdrive, Symantec’s Stupid Mistake | Creeva's World 2.0
john
· 1 year ago
I think Symantec is right. A real business is hardly built on top of free service, unless you can find other way to monetize your free service. In the online backup business, you cannot really use advertisement revenue to offset it.
When reading the news, I tend not to believe they have $13 million in profit, the amount of revenue is already very impressive. This makes a lot of other small companies feel shy. In this business, most companies are money-losing: just think about some companies offering 2GB to 50GB free storage, or charging only $50/year for unlimited storage… while the storage price is going down, operating a backup service is not the same as using some raw cheap hard disks. We are not sure how the free / cheap service providers can survive without a buyout by some big old industry giant. From that point of view, SwapDrive has been doing really great in business.
DriveHQ.com is another independently-operated major Online Storage and Online Backup service provider.
Like SwapDrive, DriveHQ has Online Storage and Sharing service based on the DriveHQ.com website, FTP and DriveHQ FileManager client software; and we also have business-class Online Backup service using DriveHQ Online Backup enterprise edition.
Unlike many other companies, DriveHQ is not funded by VCs. We have spent many years developing top-notch products and technologies. We make money by offering top-quality products and services to our customers and creating value for them. We offer customized services to small and big companies. Our service has powered from big telecom service providers to small accounting firms, etc. While we look forward to having some good luck, our business focus has always been to create value for our customers and stay profitable. At end of the day, we believe if online storage and online backup is really important for customers, they will pay for it at a good price.
First because of your business, pardon me if I think you are influenced in a certain direction. That being said while I think your prices are still to high for anything I would recommend to a home user (I'll get to enterprise in a second), your company is still significantly cheaper then Symantec's new offering.
While I understand completely that a backup service is more then just cheap disks, that does have a significant impact. Whether you think I'm proscribing to the "freeconomics" theory or the theory that all basic technology (bandwidth, CPU time, Memory) gets cheaper over time, what we are still looking at is prices as they should have existed 2-4 years ago.
I have 5 Mbit DSL - since I've moved to cell phone I've taken the phone companies discount by bundling and stripped my phone line off all services, so I get the service complete for $26.00 with all the taxes. Over 12 months that's a little over 300.00. I can also purchase 1 TB drives for 150.00. We are now up to 450.00 for the first year. Well I also need a computer - I know from compgeeks that I can buy a fully capable computer that can handle storage across the internet for 100.00, but to be fair I'll by a 2 year old server for around 200.00 - rack mountable so if I grow I can have more customers. Currently we are at 650.00. Domain name cost is trivial but we'll throw in 10.00 for that. 660.00 a year now.
We now want redundancy so we buy 3 machines with identical hardware which would be an extra 700.00.
So now we have 3 machines with 3 terabytes of storage space all mirrored to one another. and I've paid 1360.00.
Well now I look offsite. Since i live in a small town I could get a place for 300.00 a month that would supply the machine, and total electrical cost for this whole would be 1000.00 for a year (I'm guessing since I run more machines then this at home plus all my other appliances for less then this). That is a grand total of 4600.00 for an offsite location and a grand total of 5960.00 a year.
Symantec charges 450 for 50 GB - well now I have 1 terabyte of data offsite available mirrored twice, I can fit 20 users in that same amount of space. So at the same cost that comes to 9000.00 - which is greater then 30% profit (3040.00). If I get more users I am betting not all of them fill up that hard drive space so like all storage companies or band width companies I over subscribe and figure in 25-30 users in the same space (and I think compared to some oversubscribed services I'm still playing it safe with that number) if it is oversubscribed I can double drive capacity for 450.00 (or for the cost of one subscriber a year).
The second year however for the same customers I won't have to replace hardware (yes I know I'm talking rinky dink operation but once you scale hardware replacements become a smaller percantage so I'm talking ideals), but that would be an extra 1000.00 profit (getting close to 50% profit margin now) in the second year. So over 2 years my profit averages to around 40% - a very healthy profit margin.
Now looknig at the leve I should be getting for 450.00 a year - yes it's a complete rip off compared to what I know I can get for my percantage of a price, especially when we are talking 1000's of customers which drive overall cost to a lower price point. If you factor in utilizing single instance storage AND having 1000's of customers - now we are approaching 60-70% profit margins.
When you are talking enterprise customers yes more secure environments would be required, so this would drive costs up, but I know for fact (since I used to work there) that Symantec has such facilities on both coasts. So that makes increased cost neglible.
So for the cost you provide I could build a backup data center for have the space (if I don't oversubscribe) and look what I receive. When I recommend online or offsite backup solutions to friends and family this is how I figure out the numbers.
I literally almost subscribed to Mozy the yesterday, but thay don't support Windows 2003 on their home user plan, and that's where I store my data at home. Maybe I'll make my mac mini for storage site - and still do it. Otherwise the costs are still a rip off.
Yes I know if I got more then 20 people I wuold need to start hiring people to maintain, but that all gets cheaper as you get more customers. From reading Symantec's press release they are going to bundle this in their next consumer software offering, I'm sure you would love direct to millions of customers immediately like Symantec will get. So they don't even have to advertise like you do, so their costs are even cheaper.
It's all fleecing the customer for the amount of space and bandwidth you get
John Smith
· 1 year ago
perhaps the pricing is intentionally high, as to not compete against the swapdrive partners, which is the true source of it's revenues.
creeva
· 1 year ago
@John Smith: The rumor and the spin they are putting on it is they are going to be adding it into the Norton line. So this would prey on people like my grandparents who wouldn't know any better other then being told.
Since Symantec will essentially become a monopoly in the sense that they will have direct access access to all these customers because of the large install base footprint they will be able to get away with this pricing model.
It's similar to Microsoft bundling Internet Explorer and putting Netscape out of business. The only difference is that they can say it's not anti competitve since their price is higher then the competition - which would be the difference form the IE case. However the direct impact and access to users is similar especially since Mozy and others won't be able to compete for eyeballs to the same level as Symantec would by just tying it into their product.
John Smith
· 1 year ago
SwapDrive has hosted the Norton 360 online backup component from it's first introduction, Symantec set there own pricing that was bundled with the product. Get over the advertised pricing, it has not been updated in 5 years, because again, direct business was not SwapDrive's goal, hence 0% name brand recognition. SwapDrive never intended to go toe to toe with the likes of Google when they developed a backup service. SwapDrive resellers offer extremely aggresive pricing, if you were to research it a little deeper you would see what I mean.
Norton Online Backup, will be yet another rebranded service offering from SwapDrive, with extremely competitive pricing set by Symantec. You don't have to fear for your Grandma.
creeva
· 1 year ago
@John Smith:
That's fine, I'm entitled to my opinion and you are entitled to yours. I worked at Symantec for about 5 years. In that time frame I saw many acquisitions that felt out of place, and most of those products were run into the ground.
Symantec doesn't create anything from scratch anymore, they spend millions on things outside of their core business in the hopes ot expand, then a couple years later they loose interest and dry up. Since you work in the sector maybe you have different opinions on it, however I did work inside the company and since I've been gone business as usual hasn't changed.
The irony is your defneding this from the outside, the Symantec employee's that I still comminucate with told me I was spot on and they are taking bets on how long this side of the business will last before it's canceled or too botched to be saved.
The good thing though is after everything is said and done if it is screwed up the rest of the competition will have one less competitor to worry about. The real worry I have is the damage that can be done in the interim.
All Comments
When reading the news, I tend not to believe they have $13 million in profit, the amount of revenue is already very impressive. This makes a lot of other small companies feel shy. In this business, most companies are money-losing: just think about some companies offering 2GB to 50GB free storage, or charging only $50/year for unlimited storage… while the storage price is going down, operating a backup service is not the same as using some raw cheap hard disks. We are not sure how the free / cheap service providers can survive without a buyout by some big old industry giant. From that point of view, SwapDrive has been doing really great in business.
DriveHQ.com is another independently-operated major Online Storage and Online Backup service provider.
Like SwapDrive, DriveHQ has Online Storage and Sharing service based on the DriveHQ.com website, FTP and DriveHQ FileManager client software; and we also have business-class Online Backup service using DriveHQ Online Backup enterprise edition.
Unlike many other companies, DriveHQ is not funded by VCs. We have spent many years developing top-notch products and technologies. We make money by offering top-quality products and services to our customers and creating value for them. We offer customized services to small and big companies. Our service has powered from big telecom service providers to small accounting firms, etc. While we look forward to having some good luck, our business focus has always been to create value for our customers and stay profitable. At end of the day, we believe if online storage and online backup is really important for customers, they will pay for it at a good price.
John
http://www.drivehq.com
First because of your business, pardon me if I think you are influenced in a certain direction. That being said while I think your prices are still to high for anything I would recommend to a home user (I'll get to enterprise in a second), your company is still significantly cheaper then Symantec's new offering.
While I understand completely that a backup service is more then just cheap disks, that does have a significant impact. Whether you think I'm proscribing to the "freeconomics" theory or the theory that all basic technology (bandwidth, CPU time, Memory) gets cheaper over time, what we are still looking at is prices as they should have existed 2-4 years ago.
I have 5 Mbit DSL - since I've moved to cell phone I've taken the phone companies discount by bundling and stripped my phone line off all services, so I get the service complete for $26.00 with all the taxes. Over 12 months that's a little over 300.00. I can also purchase 1 TB drives for 150.00. We are now up to 450.00 for the first year. Well I also need a computer - I know from compgeeks that I can buy a fully capable computer that can handle storage across the internet for 100.00, but to be fair I'll by a 2 year old server for around 200.00 - rack mountable so if I grow I can have more customers. Currently we are at 650.00. Domain name cost is trivial but we'll throw in 10.00 for that. 660.00 a year now.
We now want redundancy so we buy 3 machines with identical hardware which would be an extra 700.00.
So now we have 3 machines with 3 terabytes of storage space all mirrored to one another. and I've paid 1360.00.
Well now I look offsite. Since i live in a small town I could get a place for 300.00 a month that would supply the machine, and total electrical cost for this whole would be 1000.00 for a year (I'm guessing since I run more machines then this at home plus all my other appliances for less then this). That is a grand total of 4600.00 for an offsite location and a grand total of 5960.00 a year.
Symantec charges 450 for 50 GB - well now I have 1 terabyte of data offsite available mirrored twice, I can fit 20 users in that same amount of space. So at the same cost that comes to 9000.00 - which is greater then 30% profit (3040.00). If I get more users I am betting not all of them fill up that hard drive space so like all storage companies or band width companies I over subscribe and figure in 25-30 users in the same space (and I think compared to some oversubscribed services I'm still playing it safe with that number) if it is oversubscribed I can double drive capacity for 450.00 (or for the cost of one subscriber a year).
The second year however for the same customers I won't have to replace hardware (yes I know I'm talking rinky dink operation but once you scale hardware replacements become a smaller percantage so I'm talking ideals), but that would be an extra 1000.00 profit (getting close to 50% profit margin now) in the second year. So over 2 years my profit averages to around 40% - a very healthy profit margin.
Now looknig at the leve I should be getting for 450.00 a year - yes it's a complete rip off compared to what I know I can get for my percantage of a price, especially when we are talking 1000's of customers which drive overall cost to a lower price point. If you factor in utilizing single instance storage AND having 1000's of customers - now we are approaching 60-70% profit margins.
When you are talking enterprise customers yes more secure environments would be required, so this would drive costs up, but I know for fact (since I used to work there) that Symantec has such facilities on both coasts. So that makes increased cost neglible.
So for the cost you provide I could build a backup data center for have the space (if I don't oversubscribe) and look what I receive. When I recommend online or offsite backup solutions to friends and family this is how I figure out the numbers.
I literally almost subscribed to Mozy the yesterday, but thay don't support Windows 2003 on their home user plan, and that's where I store my data at home. Maybe I'll make my mac mini for storage site - and still do it. Otherwise the costs are still a rip off.
Yes I know if I got more then 20 people I wuold need to start hiring people to maintain, but that all gets cheaper as you get more customers. From reading Symantec's press release they are going to bundle this in their next consumer software offering, I'm sure you would love direct to millions of customers immediately like Symantec will get. So they don't even have to advertise like you do, so their costs are even cheaper.
It's all fleecing the customer for the amount of space and bandwidth you get
Since Symantec will essentially become a monopoly in the sense that they will have direct access access to all these customers because of the large install base footprint they will be able to get away with this pricing model.
It's similar to Microsoft bundling Internet Explorer and putting Netscape out of business. The only difference is that they can say it's not anti competitve since their price is higher then the competition - which would be the difference form the IE case. However the direct impact and access to users is similar especially since Mozy and others won't be able to compete for eyeballs to the same level as Symantec would by just tying it into their product.
Norton Online Backup, will be yet another rebranded service offering from SwapDrive, with extremely competitive pricing set by Symantec. You don't have to fear for your Grandma.
That's fine, I'm entitled to my opinion and you are entitled to yours. I worked at Symantec for about 5 years. In that time frame I saw many acquisitions that felt out of place, and most of those products were run into the ground.
Symantec doesn't create anything from scratch anymore, they spend millions on things outside of their core business in the hopes ot expand, then a couple years later they loose interest and dry up. Since you work in the sector maybe you have different opinions on it, however I did work inside the company and since I've been gone business as usual hasn't changed.
The irony is your defneding this from the outside, the Symantec employee's that I still comminucate with told me I was spot on and they are taking bets on how long this side of the business will last before it's canceled or too botched to be saved.
The good thing though is after everything is said and done if it is screwed up the rest of the competition will have one less competitor to worry about. The real worry I have is the damage that can be done in the interim.