Monday, August 13, 2007

Disruptive business model from Google coming soon.


Google is now offering bulk storage services, that may be a lot cheaper than buying your hardware and managing it yourselves. Google can probably buy drives at deeper discounts than the largest array manufacturer, so the old Storagenetworks model of outsourcing your secondary and tertiary storage may make sense if Google can drive the prices low enough.

The issue becomes one of whether corporate IT folks trust Google with their data and data security. If they drive the prices low enough, IT folks are going to have a hard time justifying the cost of expensive storage arrays for storing data that nobody looks at. Data security may become the trump card for outsourcing secondary and tertiary storage.

This article is interesting reading if you apply the pricing to the cost of storing and managing TB's of aging data.

"Google is initially offering four storage plans, starting with six gigabytes for $20/year, and culminating with a whopping 250GB - this is similar to a lot of people's hard drives - at $500 per year. On the middle ground, there's 25GB for $75 and 100GB for $250. The space is shared by your GMail account and "Picasa Web". As more and more people put their high-res digital photos online, and as megapixels go up and people become used to leaving everything in "the cloud", I'm sure this will be a healthy source of Google revenue.

In that sense, Google is competing now with hosting companies. But if you intend to use Google's space only for Picasaweb pictures, I humbly suggest you do the maths, as I think hosting companies still have an edge. The hosting provider I use for one of my domains has, for instance, a 110 GB plan - yes that's gigabytes of storage, and 5TB of data transfer per month - for $5 per month (that translates to $60/year for 110GB vs Google's 100GB for $250, in other words $0,54/GB vs Google's $2,50/GB)."

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