HP’s Upline Bites the Dust

HP Upline consumers have been notified by an email from Hewlett-Packard stating that the service would be discontinued effective March 31, 2009.  Read more at App Scout »

This closure, follows AOL’s closure of Xdrive this past January, 2009, and sparked an interesting Linkedin discussion on Cloud Storage business models including comments by David Friend, CEO, Carbonite and Peter Secor President and CEO at Allmydata.

David and Peter point out that it is tough to scale and make money. “Data comes pouring into our data centers at a rate of about 100 million files every day, or 70,000 files every minute around the clock. The software and architecture that allows all that data to get onto our redundant storage arrays without losing even one byte is incredibly complicated. So while it’s easy to back up one PC with one external hard drive, backing up many hundreds of thousands of PCs that are all simultaneously sending you data from every corner of the earth is quite another matter.”

A rough cost business model is:

  • 35% – Personnel
  • 35% – Infrastructure
  • 30% – Data Repair (the killer)

Notice that these add up to 100% leaving nothing for gross margin — so one can undertand why HP found this unacceptable!

Although other online BaaS (Backup as a Service) and StaaS (Storage as a Service) vendors have jumped all over these closures offering discounts to stranded users, the bloodbath is not over for sure. I wonder if Mozy will be the last one standing?


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