Backblaze endured drive shortage by creating ad-hoc supply chain

By on October 9, 2012, 5:00 PM

There are numerous variables which play an important role in whether or not a technology startup becomes a runaway success or an abysmal failure. One of those important factors seems to be adaptability -- the ability for a company to think quickly on its feet. In this interesting story posted on Cnet, we see a fledgling, cloud-based backup company called Backblaze do just that: avoid imminent catastrophe by being nimble and flexible. 

When drive prices went through the roof in 2011 due to a massive flood in Thailand, Backblaze's entire business model was in jeopardy. Suppliers were charging more than double for hard drives while Backblaze found itself ordering several hundred drives each month to keep up with subscriber demand. Experiencing similar troubles, other cloud storage outfits were changing their prices and plans, but Backblaze remained doggedly committed to keeping its $5/mo unlimited backup plan unlimited -- and $5. Something had to give.

To weather the hard drive shortage, Backblaze execs came up with an unusual solution: ask employees to source hard drives locally and online. After some initial success, the company began noticing that external hard drives were actually selling for less than internal drives. Suddenly, Backblaze had employees purchasing external drives while a line of workers prepped those drives for server installation by freeing them from their plastic-enclosure shackles.

The company promptly set up a "drive farming" page to help employees identify where the best deals were. Things were moving along well, but it was about to get more complicated.

Local businesses started enforcing customer limit rules -- two drives per person. Some managed to navigate around those restrictions, but over time, supplies dried up. An employee's out-of-state father came to the rescue though, shipping 50-60 drives at a time. This contribution, in addition to the voluntary efforts of employees, managed to give Backblaze enough time to stay in operation and ride out the drive crisis.

These days, Backblaze is adding roughly 3,000 drives to its service each month. The company still offers a one-size-fits-all, unlimited backup plan for as little as $3.96 per month.

User Comments: 5

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Ranger12 Ranger12 said:

Great article. Very interesting and informative. The ingenuity and flexibility seen here becomes increasingly rare as companies get larger. One of the few perks of being relatively small. They sound like a pretty good company.

Guest said:

I already use, and need, a more feature-rich option (SugarSync currently, but I'll switch back to SpiderOak when their software shapes up a little better), but I really respect their flexibility. That's everything thats right about a small, entrepreneurial companies.

RzmmDX said:

Holy crap, 3000 hdds per month?

I really wonder what is the hdd failure rate for them.

Rick Rick, TechSpot Staff, said:

Holy crap, 3000 hdds per month?

I really wonder what is the hdd failure rate for them.

Google did a study on drive failure rates a few years ago, looking at data from over a hundred thousand of their HDDs. They found that annualized failure rates were 1.8% for drives less than 1 year old and 8.6% for drives less than 3 years old.

There are a lot of factors to consider and those numbers might not perfectly reflect failures for consumers, but it's definitely the most comprehensive look at failure rates I know of.

Here's the study (pdf) [link]

Guest said:

I will have to admit I am more than a little surprised that a cloud storage service is using consumer grade hard drives. Yes they are cheaper, but the high cost will be a significant data loss if they are using the drives in any sort of a raid storage scheme. If they are simply duplicating data in multiple places, then it doesn't seem like quite as horrible of an idea. Kind of makes you wonder if they are not also using UPS's from Best Buy or Radio Shack batteries. If you want a cheap cloud storage service, then that's what you get, a cheap service.

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