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Folks, Sugarsync just announced that it is doing away with the free accounts going forward. It is a popular sync and backup service, and this is a major change to their policy. As the CEO of a competing service here at IDrive Inc, I wanted to share some of our thoughts on this.

There are two extreme ends in the cloud backup and sync segment. There are some who offer unlimited storage for very little money. There is hardly any justification from a long term business perspective about how one can really survive with this model. At unlimited offer, and with continuous growth of user data, especially multimedia data in pictures and videos that are getting accumulated on user’s computers, it is a no win situation for backup companies.  At the best, it is a  marketshare play, at the worst, companies will be burning through their VC money fast. Mozy, a key player in this space backed out of unlimited after 5 years of offering this sort of a plan. Companies resort to put in artificial limits, such as throttling user’s bandwidth, or limit backups to a specific device, or limit file types or at least make it harder for users to choose the big multimedia files to backup to save themselves from getting caught in the unlimited storage tail-spin.

The other end of the spectrum is SugarSync who has a high price/GB and are doing away with anything free.

Ours has always been a sort of a middling approach which we think is more sensible. We offer the best price/GB with a free option that lets consumers and businesses have a full taste of the features that we offer. We offer unlimited device backup for every account. Users are only limited by the space they buy.  We are able to do this and stay profitable and can play this long term because of our vertical integration of the whole online backup service chain from owning or leasing our own servers, to our own home grown APIs, all the way up to the desktop and mobile clients. We can offer the best price/GB, best performance, and best set of features in this space. Vertical Integration is the key cornerstone of our strategy for the long term.

So if you are on the sidelines waiting to jump in on the best online backup service, IDrive offers a very compelling long term solution. Give it a spin. It offers free 5GB of storage!

Raghu Kulkarni
CEO, IDrive Inc.