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.

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