Bitcasa Increases Unlimited Cloud Storage Pricing Tenfold

Bitcasa, a cloud storage provider that has made a name for itself as a provider of unlimited storage in the cloud, invoked the wrath of customers and potential customers this week when it unveiled a new pricing scheme that increases the costs of its unlimited storage plan tenfold. But don’t start tweeting all kinds of bad things about the company just yet—there’s a good chance it won’t affect most of its customers.

Up until this pricing change, Bitcasa charged organizations $99 per year for unlimited cloud storage, but the price has been bumped up to $999 per year. It’s a far from insignificant price change, but according to Brian Taptich, Bitcasa CEO, existing customers’ current pricing plans won’t change. Besides, the vast majority (98 percent) of Bitcasa’s customers store less than 5TB of data in the storage provider’s cloud.

Taptich also noted in a statement to Talkin’ Cloud that 92 percent of Bitcasa’s customers store far less than 1TB. New customers will be affected, of course.

For new customers, 1TB of data will ring in at $99 per year; and considering the amount of data Taptich said most customers store, it really won’t make any difference. It’s those who are looking for large amounts of storage that will be significantly affected. New customers who subscribe to Bitcasa will pay $499 per year for 5TB of storage, and the unlimited plan will run $999 per year.

Also changing is the free plan. Existing customers will keep their 10GB of free storage, but new customers will be provided with 5GB of free cloud storage instead.

Any changes to plans will mean a shift into the new pricing model, though.

The new pricing model may not have any effect on existing customers (at least for now?), but the change certainly wasn’t well-accepted by those who follow the company. Many of the comments on the blog post introducing the new pricing plans were unkind, at best.

“We made the decision to focus on 98 percent of our customers, who use less than 5TB of data and want more usability—not just capacity. More than anything else our customers want their digital belongings to be more accessible and usable,” Taptich noted.

But is this just a matter of changing pricing schemes to cater to the 98 percent or is there something more to it?

Charles King, principal analyst at Pund-IT, chimed in, noting the price increase as “breathtaking.” Although he said the reasoning seems sensible, he posited the theory that something more was going on behind the scenes of the cloud storage provider.

“I have to wonder if another contributor was a small percentage of clients storing very large volumes of data. It’s a variation of the old story of an all-you-can-eat restaurant being put out of business by diners with bottomless bellies,” King told Talkin’ Cloud.

The new pricing scheme should sustain Bitcasa’s business model, King said. That said, a growing number of competitors in what is really a commodity space will keep pressure on Bitcasa.

A pure cloud storage play is tricky, at best. At worst, it’s a recipe for disaster. Just ask the likes of Nirvanix. Not that I want to suggest any other cloud storage player is about to keel over, but the market is becoming increasingly competitive—and let’s face it, the margins are low.