Google and Amazon are doing battle for your cloud storage business, and no matter who wins, you win!!!
Basically, the web giants have both enabled enterprise scale storage offerings. Google’s Cloud Storage and Amazon’s S3 Storage solutions have both been available for a while, but the competition is heating up. During the past week, they have traded public announcements of price drops – first Google, then Amazon, then Google again. The quick chronology is:
2012-11-26 (A New Hope) – On November 26th, Google fired the first shot. They announced price reductions of 20% and the launch of Durable Reduced Availability (DRA) storage. The prices undercut AWS and the DRA storage was the first competition to S3’s RRS offer. (Note: Google is probably more like the Empire than the rebels, but they are certainly the underdogs in the infrastructure on demand world when compared to AWS)
2012-11-28 – (The Empire Strikes Back) Just two days later, AWS struck back. At their re:Invent conference in Las Vegas, SVP Andy Jassy announced a 25% price cut at both Standard and RRS pricing for S3. (Note: we do not think that Andy Jassy really has any Vadar like qualities)
2012-12-01 – (The Return of Jedi) After two days of letting things sink it, Google dropped prices by another 10%. They are serious about making a play here, and appear ready to fight with price. (Note: we are pretty sure that if Sergei lost a hand in a light saber duel that there is a Google engineer’s 20% project capable of replacing the limb)
The big winner (as was the case with the release of each of the above referenced films) is the audience of cloud storage developers and companies.
Let’s hope that the next three installments are better than their fim counterparts…
Late last week it became clear via SEC filing that J2 Global (best known as the makers of eFax and similar online communications solution) made an offer to acquire online backup provider Carbonite for $270M. The price was a 37% premium to the publicly traded stock (NASDAQ: CARB) at the time of the offer (about a 30% premium as of today).
J2 is known for growing by acquisition, but typically buys “business” (i.e. buy subscribers) or “technology”. Unclear if it is looking for both here, as they have previously acquired several smaller online backup businesses (it bought European-based KeepItSafe in October of 2011 and Phoenix headquartered Offsite Backup Solutions in January of this year).
What’s next for J2? Well, they already own 9.9% of Carbonite. Let’s see what happens.
It looks like an update to Microsoft’s SkyDrive online storage system is wreaking havoc for users of certain browsers, specifically the Opera browser. It seems like the update results in the unintentional delivery of a massive number (2MB worth) of null characters, a story we saw first in the My Opera user forums.
The posting details the SkyDrive problem and includes useful screenshots. Other coverage of the problem (from Hacker News and The Next Web) noted that while it was clearly a case of poor coding and/or “netizenship” on the part of Microsoft, this crashing and freezing highlights flaws in the way Opera itself is designed (still uses one process for all tabs, allowing a problem in one to affect all others). Notably, the problem does not appear to affect other browsers similarly and Opera accounts for less than 2% of the overall browser share.
Anyone else noticing odd behavior? Or have information on a time line to resolution?
Online backup provider Carbonite (NASDAQ: CARB) announces its financial result for the third quarter of their 2012 fiscal year, and most indications were quite positive.
Storage Newsletter provided a nice summary of the results, the highlights of which are:
- Bookings for the third quarter of 2012 were $24.3 million, an increase of 19% from $20.5 million in the third quarter of 2011.
- Revenue for the third quarter of 2012 was $21.6 million, an increase of 35% from $15.9 million in the third quarter of 2011.
- Gross margin for the third quarter of 2012 was 66.6%, compared to 61.6% in the third quarter of 2011.
- Net loss for the third quarter of 2012 was ($3.4) million, compared to ($7.4) million in the third quarter of 2011.
The improvements all make sense and our part of the natural progression of the recurring revenue model (i.e. since bookings are in advance, revenue will continue to grow and since costs of storage tend to decline with scale, their margin improvement is expected). It seems like the should be profitable at this point, so the lag in generating earnings is likely due to high marketing costs, high G&A, and/or customer service.
The most confusing element is their churn report (“Quarterly retention rate was in the 96% to 97% range, consistent with prior quarters since 2009.”). Carbonite reports churn on a quarterly basis, which makes it harder to discern what is really happening there.
Question to our audience — does anyone know if other SaaS companies that report churn on a quarterly basis?
We’re back! After a long hiatus, the Cloud Storage Blog is under new management and returning to the airwaves… and just in the nick of time – it’s been a huge day in cloud storage news. Unfortunately, most of it is negative:
Dropbox releases security breach information
High flying cloud sync and storage site Dropbox published the details of a major security breach today. The BBC coverage provides a summary of the Dropbox security breakdown and Sophos issued a scathing critique.
Carbonite sanctioned by UK Court
Online backup provider Carbonite got a wag of the finger from the UK’s advertising watchdog organization, the Advertising Standards Authority (ASA). The group called Carbonite’s advertising misleading, noting that the highlight their “unlimited” backup space, but actually intentionally slow down users’ upload speeds when they start to store a lot of data.
They declared (and pretty much anyone with common sense would agree) that this is pretty misleading. The adjudication affirmed that Carbonite’s ads are misleading and prohibited them from being run in the same form in the future. Is the FTC next to act?
Notably, the company did not respond to the complaint. Also, they released 2nd quarter earnings info yesterday. Revenue and bookings are up by an impressive amount, but the market doesn’t seem to like the totality of the news, as the company’s shares are trading down 10.9%
Anyway, we’re exciting to be posting again but looking forward to more positive news for the space…