Facing consumers with an appetite for cloud storage that has increased 50% over the past year, the world's largest consumer online storage provider said on Monday that it will no longer offer unlimited storage and will increase fees for the limited online storage it's now selling.
While Mozy may be among the first to change its pricing model for consumers, one industry analyst said most other providers will soon be forced to follow suit.
"Others are already doing things like bandwidth throttling to help control the volume of data being stored and limiting the types of files you can backup, but as far as raising prices we haven't seen that yet by others," said Gartner analyst Adam Couture.
Mozy, which is owned by EMC, opened its MozyHome consumer storage service in 2006. Since then, it has charged $4.95 per month for unlimited online backup.
While the new price and capacity points take affect immediately for new customers, existing customers will have until March 1 before they'll be required to change over to the new plans.
Today, however, Mozy services more than 1 million users, and while the majority of its customers don't abuse the service, about 10% are considered "power users" who store everything and are eating up enormous amounts of capacity.
Power users tend to not only store high-definition video, photos and music, but they also end up converting all their analog data to electronic to store that online as well, said Russ Stockdale, senior vice president of product marketing at Mozy.
Power users use as much capacity as the other 90% put together, he said. To give you an idea of how much that is, Mozy currently stores more than 70 petabytes of data for its customers.
"The analog camcorder became digital, and the digital camcorder became high-definition digital. Then all that stuff got built into your phone. Now you have people carrying high-quality digital devices and exhibiting a behavior where they reflexively store it," Stockdale said. "There's been a pressure across the industry on consumer plans that offer unlimited capacity."
Mozy said the typical size of a photo taken on an iPhone 3G takes up .5MB of storage. A photo taken on an iPhone 4 takes up 2.6MB, and one taken on a Droid X phone eats 2.3MB of capacity. When it comes to taking one minute of video on the latter phones, it consumes 82MB and 170MB, respectively.
Mozy's MozyHome service will now charge $5.95 a month for up to 50GB of storage capacity, and $9.99 per month for up to 125GB capacity (and as many as three computers.) Beyond those prices, if a user wants to add another computer to his or her existing storage, it will now cost $2.00 a month. They can also add 20GB of additional storage capacity for the same monthly price.
"We wanted to make the incremental cost of adding a computer less than it was in the past," Stockdale said.
Mozy competes with other storage providers such as Adrive, Flickr, Carbonite, Google Gmail, YouSendIt, Boxnet and SugerSync. Many of those companies offer free online storage up to 5GB and then charge a fee for unlimited storage after that. Some, such as Window's SkyDrive.live.com , offers 25GB of free storage, but bandwidth is severely limited.
Courture admits to being a power use of Carbonite's service, which he said he's sure they're loosing money on him. "But the philosophy of these companies has always been that power users are balanced out by their average users."