Backblaze S-1 IPO(sec.gov) |
Backblaze S-1 IPO(sec.gov) |
They were out touring with an artist in some remote country, I think it was Kazakhstan, when the artists macbook suffered hard drive failure. Everything was backed up on backblaze, but the internet connections they had available was simply too unreliable to get the backup down. They contacted backblaze and for a price that was high (but not insane for a company) backblaze actually flew a guy with a physical hard drive to their location.
Saved ~5 gigs from being canceled, and my friend has been a die hard backblaze evangelist ever since.
https://en.wikipedia.org/wiki/Nelson_Mandela_70th_Birthday_T...
According to this BB blog post[0] certain functions are unavailable ("making a new purchase, installing new trials, signing in to your account, creating new accounts, enabling B2, and creating a master Key"), and two B2 API calls (b2_create_bucket, b2_delete_bucket).
If these are the only disrupted features, then impact depends on the details of the use case (perhaps get object and friends have to be on demand but other changes can be async).
Now, why these specifics are in their blog post and not in the Scheduled Maintenance page itself, that is a fair question, because it leaves room for doubt that only this exact set of functions are affected each and every window.
[0] https://help.backblaze.com/hc/en-us/articles/227807447-Backb...
If it wasn't for the content and that they needed it ASAP I think regular air cargo would've sufficed.
>” In the years ended December 31, 2019 and 2020, our revenue was $40.7 million and $53.8 million, respectively, representing growth of 32%. We incurred net losses of $1.0 million and $6.6 million for the years ended December 31, 2019 and 2020, respectively”
Also, congrats Backblaze! The next adventure begins :)
Their software is just not good, I would say it's even bad. It just didn't work for me.
Something poorly written that they just didn't bother to improve. I guess because most of their customers can't tell the difference anyway whether it's working or not.
Is there any application, preferably for Windows, that can handle this for me? Synchronise files with a cloud system, but encrypting/decrypting them transparently as they are uploaded/downloaded.
Long time customer of their backup product, and I'm considering B2 for an upcoming project as a result. They seem to be good at doing what they do, which is always great to see :) Especially great to see an IPO from a company that isn't exploiting privacy, or gig workers, and instead simply providing a great service.
Am I reading this right that they only had 53 million USD in Revenue in 2020?
That's a tiny fraction of, say, Dropbox's revenue. I would have expected them to be in the 30-50% range of Dropbox on size.
And with 164 employees to boot, that's only $323,000 revenue per employee. I wonder what the compensation is like there.
I had to buy a separate product MSP360, and then even then configuring that to work with Backblaze wasn't easy (at all). I got stuck and gave up.
Hope they smooth out the kinks.
I'm not sure, sorry
If I were to start over, I would likely choose kopia, which does everything restic does and more (better performance, compression, GUI, etc.), and seems to provide a better out-of-the-box experience. That said, I haven't tried it out yet.
I even do this with Microsoft SQL Server using iSCSI.
What does this even mean? And how is their business even remotely competitive with the big 3? Bit pushing is a volume game, and it doesn't seem like they have much of it.
What I like about Backblaze B2 is that is has simple, no gimmick pricing, unlike almost every other cloud storage company. It doesn't have delete penalties, where they charge for storage you've deleted. It doesn't have minimum file sizes, where they charge for storage you aren't actually using. It doesn't have a minimum payment every month.
For backups, their business is very competitive with the big 3, especially considering that they will mail a physical drive to you with your data.
90% gross retention is really good, even if 110% NRR is bottom quartile for public SaaS. Wouldn't be surprised if they become profitable soon.
I would agree that B2 is their high growth area, but I do not think Cloudflare directly opposes B2.
If you consider they bought & added, net of depreciation, about $16M of assets to their balance sheet in 2020, the loss of 6M doesn't seem terrible. Using the bean counter approach - no new marketing, no spending on growth, no unnecessary R&D - they could have cleared about $20-25M of ebit in 2020.
Deciding to use your gross profit to fuel further growth (especially considering they're compounding it at a healthy rate and doing so without giving up equity or interest) is a wise move. If anything, it probably would have made sense to take some debt or finance more of the hardware purchases early on (as I see they are doing now at some scale as of 2020) in order to put those proceeds towards customer growth.
The only thing I see which is a marginal concern with these numbers is that it's difficult to see the split between marketing spend on b2 customers and backup customers (They spent $8M in 2019 on sales and marketing to generate 42k new customers, and $11.9M in 2020 to add 40k). It is very possible and likely that those marketing dollars went towards new enterprise customers (on b2 storage vs backup) and the revenue-per-customer number increasing during that timeframe seems to support that. Are blog posts calculated in the sales/marketing spend? Seems lots of the customers came from the organic content play.
Very cool to see the company who's free blog post about which harddrives are most reliable (when some had >5% annual failure rate and others <1% for the same price) nearly 10 years ago come around to s1.
On a side note, I'm a very happy Backblaze customer and the same time curse Dropbox for not offering a 100GB $5/mn plan. Backblaze pricing is very customer friendly.
2) I agree: Their incredibly hard drive reliability reports are like catnip! Here is a sample post if others don't know about these reports: https://www.backblaze.com/blog/backblaze-hard-drive-stats-q1...
https://news.ycombinator.com/item?id=15074289
>Finally, Backblaze is profoundly different than CrashPlan in that we never really raised any bank financing or VC financing. We're 90% employee owned, and there are no deep pockets. CrashPlan raised something like $150 million which comes with "pressure to grow fast or die". Backblaze is free of any such pressure, we own our own fate.
https://news.ycombinator.com/item?id=21006216
> Yev here -> we HAVE to be cash-flow positive since we're not VC-funded. When we started the company it was bootstrapped, so "making enough money to survive" has always been a part of the equation!
That last comment was from 2019, yet according to the S-1, they were actually unprofitable. What's going on here? Were they profitable before, then suddenly taking on a massive loss? Their loss in 2020 was huge compared to the one in 2019.
The extra fun bit is that just exfiltration will cost you.
Sure, you can probably do it cheaper with your "friend with a hard drive" solution, but there's zero redundancy there, you'll need to replace the hard drive when it eventually goes bad etc. etc.
For some people that's a tradeoff worth making, but for me, a few extra $ a month for peace of mind is worth it.
The original backblaze was literally Time Machine in the cloud.
Smart move IMO.
What's even revenue to say in the face of growth.
Also it irks me that the personal backup plan forbids network drives [1]. I can't backup my 4TB NAS but 80TB is fine because it's stored on one machine?
0 - https://www.backblaze.com/b2/cloud-storage-pricing.html
1 - https://help.backblaze.com/hc/en-us/articles/217665478-Why-d...
Think about it: if you have a backups stored with them via their proprietary backup client, you have to stick with them or lose all your backup revisions; there's no way to move revision history.
That's why they charged below their own rates, they knew people would be trapped.
Backblaze backup plan pricing is about to skyrocket.
Also consider that many other users may be using far less than what $60 could buy for Backblaze.
Even if Backblaze is suffering a huge loss on account of your usage, the fact that you commented here about it and indicated that there haven’t been any repercussions is a marketing message for the company treating paying customers in a decent way.
I’m sure people on r/datahoarders (Reddit) would already know of use cases like yours or may be thrilled to know of it.
If it were me, I'd continue offering the $6/mo unlimited plan, throttle upload bandwidth for personal backups larger than a TB, and offer a high-performance option for $6/mo/TB with no throttle that also supports Linux, network drives, and anything else you want to backup. That's still a 20% premium over B2, and they have control over the client behavior which is also an advantage.
edit: lol 80TB - hopefully it's mostly torrents and porn and they can de-duplicate it on their end from all my torrents and porn already on there :D
For example:
https://old.reddit.com/r/backblaze/comments/g26lgt/max_capac...
https://old.reddit.com/r/backblaze/comments/arnlyr/10tb_on_b...
I can't find the link.
p.s. "Right now we have computer-wide deduplication, but not farm-wide or account-wide!" 4 year ago http://disq.us/p/1q3efbb
The main issue is that if you haven't tried to be profitable, how do you know for sure you're spending the money wisely?
What if the whole point of the personal plan is "hopefully they can be encouraged to spend +$x with us"?
As a public company there's no chance backblaze will let this dude keep ripping them off.
It can apparently run via WSL. The main selling point is that it's made by colin percival[1], so if you really care about the security of your backups, you can't get any better.
Additionally, it's fairly reasonably priced. When s3 dropped their prices so that tarsnap became cheaper to run, he passed that on directly to customers[2]
[0] https://www.tarsnap.com/faq.html
[1] https://en.wikipedia.org/wiki/Colin_Percival
[2] http://www.daemonology.net/blog/2014-04-02-tarsnap-price-cut...
It’s like orders of magnitude more expensive than S3 and b2.
As others mention a lot of closed source tools offer local encryption, including Backblaze (although I believe they need your key in order to do restores, which might or might not defeat the purpose depending on your use case).
I was searching for something the could replace Backblaze on Linux for me, and Vorta+BorgBase was even better than that.
Encrypted and compressed by default, deduplicated, life-long (if desired) and diffable history, every snapshot can be mounted locally, alerts on missing backups, just a breeze to use, and works for my personal machines just like my VPS.
I use the macOS version and it's excellent.
Not sure what the long term strategy is, but I hope going public doesn’t kill them — seems like a nice little business that could just coast for years.
Why am I forced, because if I don't back up my phone using iCloud, then I need to back it up using iTunes, or not at all. That they have made copying photos off the iPhone terrible and iTunes terrible, is a good tactic to make me use iCloud.
For now I am holding out, sticking with backblaze (I love the do-nothing and it's backed up workflow) and probably will go the iTunes YUK route for backing up.
Yes, it does seem just like that and I believe we are witnessing an entity (backblaze, in this case) trying to switch from one zone of attraction:
Nice little business that throws off a ton of cash and grows organically but doesn't make anyone a billionaire ...
... to another zone of attraction ...
Scaled up enterprise that requires a sales and marketing effort (and accompanying infra) capable of revenue generation that matches the demands of an IPO and public shareholders ... and could possibly make someone a billionaire.
There's a big, deadly valley between those two zones of attraction and you have to push very hard to make that change. Very unlikely any kind of corporate culture or "human touches" survive that movement.
" ... seems like a nice little business ..."
Sometimes that's enough for people. Sometimes it's not.
Sometimes you paint yourself into a corner where the (IPO) is the only choice one has.
I wish them the best.
But yeah I tend to agree: why do they have such a large footprint?
I think brand awareness of Backblaze is insular - I remember Carbonite had the strategy of advertising on right-wing radio in the 00's which seems to have worked for them.
I don't think they're targeting Backblaze, but their position as the foremost middleman of the Internet means they're going to hurt direct competitors and partners pretty much any time they launch a product, until they're out of partners that host "cloud services". Which is a position Cloudflare put themselves in entirely on purpose.
[Edit: didn't realize Backblaze has cloud storage, I still think of them as the cloud backup company.]
But I think the niche between them is totally different.
1) 2.5kWh per month of drive-on power. Datacenter grade power: 30-40c/kWh normalized =~ $1.00 in power per drive. 2) 60 drives per 4U space. 10 storage pods per 1 rack. 600 drives per rack. full rack in a colocation facility: $250-$500 =~ $0.40-0.80 in physical space.
Total cost per year to keep that drive up is, very ballpark, $16-22. The cost of running the drive is minimal vs the initial cost of $500 for the drive and storage server/rack/installation/network equipment etc. Network costs to transfer data from/to that drive are obviously nontrivial but again, the majority of the hurdle is outlay for capital.
We use multiple great SaaS tools that in the last two years have removed DIY 'tiers' or 'plans' billing you can do online and forced us to sign yearly contracts, deal with pushy sales reps, and changed to opaque and stupid complicated pricing.
Oracle behavior! we have no choice but to bend over.
They are great tools which is why they can do this ;)
And the cost of the pods will be capitalized and depreciated so a large surge in buildings won’t necessarily lead to bad financials.
I was curious about this as well:
Cost of revenue consists of expenses for providing our platform and cloud services to our customers. These expenses include operating in co-location facilities, network and bandwidth costs, and depreciation of our equipment and capital lease equipment in co-location facilities. Personnel-related costs associated with customer support and maintaining service availability, including salaries, benefits, bonuses, and stock-based compensation are also included. Cost of revenue also includes credit card processing fees, amortization of capitalized internal-use software development costs, and allocated overhead costs.
We intend to continue to invest additional resources in our infrastructure and related personnel, and our customer support organization, to support the growth of our business. Some of these investments, including costs of infrastructure equipment (including related depreciation) and expansion, are incurred in advance of generating revenue, and either the failure to generate anticipated revenue or fluctuations in the timing of revenue could affect our gross margin from period to period.
50% gross profit is not great compared to a SaaS company, but still not terrible compared to <insert literally any other company that isn't enabled by tech>.
They also generate ~$12M in net cash from operating activities. So "profitable" is a weird one here. They'll have to continually invest in data centers and hardware, but generally speaking they are turning cash pretty well.
This is really all there is to it. You don't actually have to build a business anymore to get rich. You just put together something that looks like one, pay yourself a handsome salary for 10 years, then cash out and retire to New Zealand.
Sweet gig if you can get it.
Did you also start a business from the ground up and run it to the size that generates $50M in revenue? What exactly about Backblaze is a "sweet gig if you can get it"...achieving this is not trivial...
Of course it's not. You need to have gone to the right school, made the right friends, be the right ethnicity/gender (white or asian male), and have access to the right VC. But given all that, it's a cakewalk.
Granted, there are more Apple device customers than any other possible bucket, but is it enough to drive economies down to the point of competing on cloud pricing?
And if not, then they're still stealing iDevice margin to price cloud competitively.
More than Enough. When you have 1 Billion iPhone customer who are also in the highest paying basket. The purchasing power is likely over 50% of the total market. As similarly shown in App Store market.
The problem is Apple has always had an Asset Light strategy. Keeping many Datacenter of Storage running just isn't their thing. That is why they are still relying on Azure, AWS for iCloud Storage.
>And if not, then they're still stealing iDevice margin to price cloud competitively.
Currently the iCloud Services ( or in fact all Services Revenue ) are masked by App Store profit and Google's Search Engine Deal. i.e most of their other Services like Apple Music, iCloud, News+ are low margin business but are used to dilute down their extremely high margin profits from App Store and Search Engine.
If it costs them $1.25, and everyone else can do it for $0.75 because they have scale and capital... that doesn't seem long-term stable.
If one cloud provider becomes dominant, Apple loses. If Apple loses market share, they lose negotiation power, and Apple loses.
The only way Apple wins is if cloud stays a multi-polar race AND Apple stays cloud-portable AND Apple retains significant market share AND cloud stays commoditized.
I'm not saying it's a bad bet (I'm sure Wall Street loves the resulting financials), but it does seem like a dangerous long term strategy, if cloud becomes more of product.
Plus, to make their hardware more attractive by having that service available.
Storing backups is probably also quite cheap to do since the data would be infrequently accessed. You don’t need fancy ssds. Cheapo hard drives will be fine.
I use B2 for cloud, and two NAS boxes on my network. I used to use OneDricd thanks to a legacy plan that was generous, but that appears to have stopped working for unknown reasons.
All data is encrypted with a paraphrase I supply, so short of some spectacular amount of brute force I consider it safe.
What I backup: Three machines currently, my laptop, my desktop, and my wife's laptop. I don't do a full drive backup as I have no problem re-installing software, losing settings, etc. I just backup documents and media for the most part. This includes wedding photos, rental agreements, bank statements, my own git repos, etc.
All of the photos and most documents also sit in a dropbox folder and are downloaded across all 3 machines. We don't do every photo from our phones because we take a lot of rubbish but usually pull over holiday snaps etc pretty quickly.
When I backup: Each machine has a daily backup using Arq which goes up to AWS S3. I then have weekly backups to Backblaze B2. Only reason to not have daily going to B2 is just to keep costs low. This backup frequency feels comfortable for our uses and we feel fairly comfortable with photos being on dropbox and synced in real-time as those are the most important to us.
I also have a separate backup from my wife's computer which runs hourly and just stores documents related to her studying to minimise loss of work if the laptop crashed during the day.
All in all this costs about $3-$5 a month on AWS and a bit less for Backblaze B2. We then pay for dropbox individual plus at £95 a year. All the backups are compressed and encrypted by Arq and it rolls up and ages off backups for us as I don't really care too much about recovering something from several years ago. Looking at the S3 dashboard we're storing 168.3 GB in total across 4 buckets.
I'm sure many people will say this is insanely little data to backup, but it's not important to us to backup everything really, we'd rather have a simple and cheap system to backup the data that's important to us. With the prices I'd have no problem expanding it to more data if needed though.
In the future I'll probably look at buying a NAS and hooking it up to Arq as well, but that'll have to wait until we've bought our first house.
Final note of praise for Arq, UI is really simple (my wife who's not a techie understands it), you can setup email alerts, and recover individual documents from specific backups without needing to restore everything.
As per https://www.backblaze.com/blog/open-source-data-storage-serv... it costs them $0.036/GB.
So 8TB space costs them 294,91$. Well they have other costs too. But if they had him as a customer for 5+ years, they can start profiting :) Actually more years, because electricity, traffic, rent, salaries, etc...
I recently evaluated a bunch of cloud storage/backup services. rsync.net is a ssh-accessible ZFS filesystem (including support for zfs send/recv) in the cloud, B2 is object storage.
rsync.net has a cheaper version aimed at people doing borg backups. Unfortunately it's still 3x the cost of B2 for 1TB of data.
I looked at rsync.net and really liked the idea, but costing 5x as much just doesn't justify the features.
Where do they offer the 3x cost solution? Cheapest pricing I can find is 2.5cents/GiB/mo (the 5x price).
Also, the lesser number of people storing large amounts of original data (eg videographers) probably create enough community goodwill to make up for the cost.
I ended up setting up Nextcloud for myself and my wife. It isn’t fun to sync everything if your phone is already full, but a fresh install would have a very native feel with some setup and a fast host for your backup ( I currently self host at home, but I wfh so it matters little. )
It looks like much of the difference comes down to stock-based compensation. This doesn't cost the company any cash, but under GAAP, it has to be recorded as an expense. (IANAA, so take what I say with a grain of salt).
Judging from their current numbers the service is profitable on a per user basis, less marketing expenses.
This is a pretty reasonable way to look at it. Being cashflow positive means you can turn up marketing to grow and turn it down if needed.
There are many reasons why cash-flow and profitability can be out of step with each other, for instance, you might have capital expenditures that are going to influence future years' books, you might have an interest carrying bank loan, you may have invested money into acquiring users whose lifetime value is larger than the cost to acquire them but you haven't broken even on that yet, it's possible to have the reverse and so on.
Accounting for all this - and doing so properly - is not as easy as it may seem to be for an outsider or someone who is used to just sell their own hours, where you can immediately see the difference between income and costs and label that profits.
And even there the situation can get more complex, for instance, if work is done in one year but the invoice is sent in the next. Profit wise you are booking that money in the year the work was done, even if the actual cash only lands in the next. Pre-paid services are even more complicated (here you typically partition a chunk of the income month-by-month until the total amount is accounted for).
It’s also important to note that being cash flow positive is not the same as being GAAP/IFRS profitable (Net Income).
I had a drive fail and I thought I was OK...and then I discovered that my Crashplan backup archives on my own server were unreadable after they shut down Crashplan personal backup services.
I couldn't even install the client, either - they silently updated the client to have a logic time bomb and refuse to install.
But, if it’s a key generated at their end, they could dedupe the original data. S3 bucket encryption been an example.
Source: I work in deduplication for a well known company.
This would definitely limit the inconvenience caused by personal users with huge amounts of data - like op with his 80 TB
Apple has been basically funding Azure Expansion. Microsoft needed Apple to scale their Cloud business in a multi-year contract. And Apple using Microsoft to drive AWS price down. I think for one reason or another ( politics, strategic, or technical ) they have avoided GCP. Apple also partner with other Cloud Services Provider in different Region. And they are doing exactly what you described as Multi Cloud. Even their CDN are split between Akamai, ( used to be Limestone and they switch to something else I cant remember ) and their own.
I would not be surprised if their next move is to fund Cloudflare R2 Storage services. ( Once it becomes mature enough )
It's hard to convince people who go along with that "but you don't really have backups, you need to download everything locally and pay $5/month".
Code is all on GitHub, all my docs and emails are in gsuite (and don't get backed up anyway by BB). The only thing that does get backed up is a load of cruft and junk I've accumulated which is actually nice to start over on tbh.
I imagine more and more people are like this. Designers who used to have to be meticulous at backing up their source files now all work in Figma, etc etc.
The major weakness now is if GH or Gsuite had a catastrophic error (or your account gets booted off for incorrect reasons). I actually think that is the more pressing backup need than local files for many.
Can you go into why Google Drive is a better alternative? I can see 2 TB for $100/yr, but I don't think the products are exactly the same.
At least with Google Drive, the 2TB plan you can store what you want and access it in the cloud like a regular file. It works with rclone and restic, so you can use it for regular backups as well and it is extremely fast. I can upload over 750GB per day in about 3 hours with Google Drive, but it would take over 3 days with Backblaze.
Did you save $-10?
If I'm misreading your comment somehow, please correct me. Maybe I misunderstood something.
As far as pricing goes, $5 per month for 100GB seems steep. SpiderOak offers 400GB for less than that and so does Nordlocker (though Nord has its own problems). On the other hand, iDrive has been offering a whopping 5 terabytes for a whole year for just $3.98 in a deal I saw just a few days ago.
Overall, zero knowledge backup is the best route, Backblaze plays at that, on the other hand I wouldn't touch any backup offering by Google with a 10 meter cattle prod. Grotesque that they reserve the right to snoop right through your files unless you first encrypt them externally via third party apps.
You are not forced to backup your entire hard-drive. There is a 3rd party program called: rclone
That program let's you choose which files/directories get copied over to BackBlaze. We have 150+TB (+10TB/week) stored at BackBlaze and I use rclone exclusively to upload our content for backup.
Note, it's a CLI program that works on Linux/BSD. I'm not aware of any other platforms that it works on.
Unfortunately services where you can backup whatever files for fixed price attract "data hoarders" - people who are storing data just for the sake of storing it.
This is not accurate, please see my response to helloworld11
At some point, I'd imagine it's an optimization problem between (cost of failure) vs (liquidation value) vs (revenue per GB), where running them all the way into the dirt doesn't make sense. Or maybe it does?
But this is a SaaS, working with recurring revenue.
Some metrics to consider are:
- Cost of Customer Acquisition
- Lifetime Value
They could spend 200$ to get an average customer, but they will renew their subscription for an average of 5 years and generate over 2000$ in revenue during that time.
As long as you keep track of these metrics you know you're in a good direction or digging yourself a hole.
Besides other costs R&D, Admin, Marketing and Sales can be scaled up and down as needed, and become a smaller part of the costs as the company grows.
I'm currently doing borg backups to a local server, then using restic to back up my borg backups to B2. My reason for using restic over rclone is so that if the local backup is corrupted I've got history on the remote to fall back to.
I'm hoping to find a less cumbersome way to do this.
Some use-cases, like photo libraries, won't benefit much from compression, so I may use restic directly for those.
I'm sure there are ways to manage this though, I just haven't figured them out yet.
I've done borg for local backups for a while and figured I could just replace it with restic, then I discovered that restic doesn't do compression so I just pointed that at the borg repositories.
I'll probably use restic directly for things that don't benefit from compression and continue to use borg for things that do.
I'm open to better options though, layering two tools that basically do the same thing seems like a bit of a hack job.
This is in contrast to other cloud storage services which might (for example) allow you to save space on your phone by uploading your old photos to the cloud and deleting the local copies.
https://help.backblaze.com/hc/en-us/articles/217664898-What-...
If I really need a long-term cold backup, it costs about half as much yearly (with a half terabyte SSD) to copy the whole thing over to a B2 bucket and get rid of the live backup. That's what I'd do if I were going to Mars.
Idk about on first run, but I'm pretty sure you can pick and choose which drives it scans, including boot drive, and set up excludes as needed (handy to avoid backing up .git or node_modules)
I was thinking about B2.