Online Backup Service To Shut Down

Online Backup Service With A Sting In Its Tale… Last October launched a new online backup service offering 512GB of storage – for free.

As usual with such ‘amazing’ offers, this deal quickly spread round the internet – despite its similarity to the ill-fated Backify service (which shut down last November).

Both BeeCloud and Backify resold online backup packages (by LiveDrive) and both offered 512GB online storage for free – whilst the free storage on offer from the major players in this market is typically 2GB – 5GB.

It seems incredible they ever thought that business model could work and, sure enough, CSBuzz report that is now shutting down:

“Your account will continue to work until March 13th 2012, giving you the opportunity to restore files to your PC if needed. As of March 13th 2012 you will no longer be able to backup or restore data and all the files that are backed up will be removed online”

If you were unlucky enough to entrust BeeCloud with your data, make sure you download and store it elsewhere as soon as possible or you will lose it for good!

Lessons To Be Learned

I have written before about the need to read the small print of online backup products but the BeeCloud and Backify fiasco falls more under the old heading of ‘too good to be true’. Established companies only offer a small amount of free backup – to entice people into paying for more storage. The simple reason is that secure online storage costs money, a lot of money.

It’s a little more complex than this but, as a rough guide:

  • Backify actually got 50,000 new customers in the first few days of their free 512GB offer.
  • If all those customers stored 500GB each – that’s the equivalent of 25,000 1TB hard drives… That could cost over $1million without even worrying about the additional costs of support staff, developers, web designers and managers etc.
  • Of course secure backup means multiple backups (in case of failure) so you could double the number of hard drives required (or treble+ if multiple RAID arrays were used). Very soon the total costs could increase to well beyond $2million – and that’s from just a few days of customers!
  • Could anyone realistically expect to give users the benefit of that level of hardware and expenditure for a free account – that offers such huge storage that there is no incentive to trade up to a paying account?


When deciding to use online backup you need to trust the company, the way it markets itself and its core business strategy – it should be no surprise that BeeCloud (like Backify before them) failed to make this work.

Too good to be true, yes. The last example we will see of unworkable business models in an increasingly cut-throat online backup market?

Unfortunately I doubt it.