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Bitcasa bins $10-a-month Infinite storage offer

Firm cites 'low demand' plus 'abusers'

Comment One of the oddest cloud storage offers ever has just been binned as Bitcasa bumps into reality. When sprats are competing with killer whales what do you expect?

Back in 2011, startup Bitcasa offered Infinite storage for consumers in Bitcasa’s remote data centre, aka the cloud, for $10/month.

The business case for this appeared to defy all logic, and now the offer is dead.

According to a Bitcasa blog: “While our Infinite offering was one of our early value propositions, we have since found that only a small percentage of people use it (only 0.5 per cent of our accounts require more than 1TB, and less than 0.1 per cent require more than 10TB).”

“The reality is while we have tried to make our vision of infinite work, the low demand combined with the growing number of suspected abusers, means that supporting an Infinite plan is not a viable business for us.”

It would seem the "abusers" are business users pretending to be consumers – “We can only see the amount of of data stored – which for some customers, is at a level that seems impossible for individual usage.”

It can’t see any deeper into customers' accounts for Infinite storage because of its privacy policies...

Anyway, Bitcasa’s Infinite storage plan users “will need to transfer to a 1TB Premium plan or our new 10TB Pro plan to continue using our service.”

There are limits to an infinitely extendable hard drive in the cloud, it seems. But consider Bitcasa’s situation. It defines itself as a cloud-based file sharing and collaboration vendor, occupying the same overall slot in the market as Dropbox, Box, Egnytre and EMC’s Syncplicity – a crowded space to say the least.

It was founded in 2011 and, after a two-part seed round and cash infusions in 2012 and 2013, has taken in about $22m in total funding. This is not a lot. In fact it’s a drop in the ocean of cloud file sync-'n'-share funding.

  • Box has taken in $564m, more than 25 times more, grown like topsy and still can’t run an IPO.
  • Dropbox has taken in $500.1m in three rounds with an additional $500m of debt financing, making $1.1bn in total, a trivial (sarcasm alert) 50 times more than Bitcasa.

This is an incredible disparity in funding. When a $22m sprat is up against cash-engorged wannabe killer whales then it better get a superb niche marketing strategy to avoid getting smeared onto the ocean floor.

In this situation, giving away stuff for free doesn’t sound like a good idea in principle, not unless you do it as a bait-and-switch deal with a pretty guaranteed good outcome.

In June, Bitcasa did a deal with Samsung to give Samsung Windows 8.1 device customers 50GB of free cloud storage for two years. Hopefully they will then transition to a paid-for Bitcasa plan.

It has its Turn-key Drive service, for telcos, OEMs, managed service providers and VARSs to offer their branded cloud storage services to their customers. A year ago it launched a Secure Storage API, followed by a CloudFS Platform API for developers earlier this year. Some 7,000 developers have registered to use it for client projects. Now that sounds like a good niche marketing idea.

Bitcasa says it has customers in more than 140 countries, but not how many customers it has.

Seen from the Vulture’s storage desk, the cloud sync -'n'-share business has become a grim and dogged affair. With Box and DropBox and giants like EMC slugging it out with ginormous clubs, it’s easy for the small fry to get smashed to smithereens. Trying to make progress offering storage in the clouds after the easy pickings and low-hanging fruit have been scorched away is not easy.

But, having scarfed $22m itself, Bitcasa has its VCs wanting their exit. Well, the Vulture says, it's tough: you’re up against giants and are probably going to have to put in more cash to bulk up Bitcasa’s business. How does $50m sound? That's against sums like half a billion and one billion. Tough call. ®

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