Article originally published July 2023. Updated in October 2023 to include Backblaze increase.
Wasabi announced a 17% price increase from $5.99/TB/month to $6.99/TB/month back in June. Backblaze quickly jumped on the bandwagon raising their price from $5B/TB/month to $6/TB/month (which is also 17%) at the end of August. Both price changes go into effect in October 2023.
17% is a surprisingly large jump for two cloud storage providers that market themselves as “hot storage at cold storage prices”. If you are a customer of Wasabi or Backblaze, you’re probably asking, “Why? And is there anything I can do about it?” The goal of this article is to answer both of these questions.
So, why the increase?
Wasabi has been keeping their prices down by adding lots of caveats and limitations of use. Some of these limitations include:
- A 30-90 day minimum storage terms, which forces customers to pay more for the storage of data that they’d rather replace frequently. A good example of this would be backup files.
- While Wasabi says “free egress” to make it look like their prices are lower, they actually only allow customers free egress if their egress amount is equal to or less than their storage amount. So if you have 1 TB of data and you download more than 1 TB in a month (common in streaming scenarios), then your use case is not a good fit for them. Wasabi states that they “reserve the right to limit or suspend your service.”
- Just like the big hyperscalers, you also have to pay extra for multi-region storage. Whether it is storing copies for durability or for regional accessibility, this multiplies your storage cost for each region you want data stored in.
These limitations only could hold Wasabi’s price level temporarily. Why? Because Wasabi uses a data center model just like AWS. As more data is stored on Wasabi, more hard drives are needed and more data centers must be built. There is only a temporary economy of scale to this model. As the prices to manufacture hard drives and build and operate data centers increases, so does the price of cloud storage. On top of the price, this model is also worse for the environment.
Additionally, transfer performance is becoming more important as use cases are moving to the edge and file sizes are increasing. This means that unless Wasabi wants to lose business to disruptors that move large files fast, they need to make some investment in product improvements.
Did Backblaze just pull a ‘me too’?
It’s no coincidence that Backblaze came out with an equivalent increase right after Wasabi. Backblaze had likely been thinking about how to raise prices for a while and felt a ‘free egress’ pricing model would help them remain competitive.
But just like Wasabi, Backblaze egress is free for only certain users for up to 3x the amount of data stored. Beyond that you will pay $10/TB of egress. That makes it more expensive for backup and much more costly for use cases that require a lot of bandwidth.
Watch 2.75 min video comparing cloud object storage providers to get a clear understanding of why ‘free egress’ isn’t actually free.
And just like Wasabi, Backblaze was built using the traditional data center model. That means they have really high operational costs. They are also one of the most limited providers regionally. They only serve the US and Europe with limited data centers. So perhaps the price increase may go toward regional expansion.
And similar to Wasabi, they aren’t known for their stellar performance so some of the price increase may be going toward improvements there.
Is this going to keep happening?
Whether you are storing your data with Wasabi or Backblaze, with a hyperscaler like AWS, or even with a CDN like Cloudflare, the cost of cloud storage will likely continue to increase. That is because each of these providers all have a centralized data center architecture. Not only will costs continue to increase with the growth of data, but consistently good performance will be harder to achieve without extra investment. Larger file sizes and a greater need for accessibility further away from data centers will result in lackluster user experiences unless you replicate the data and pay for storage in multiple regions.
Fortunately, there is an alternative cloud storage model that completely disrupts these limitations. Instead of data stored discretely in data centers, data is encrypted, segmented, then distributed to tens of thousands of storage locations throughout the world. Each file is split in 80 pieces, but only 29 are needed to rebuild the file. This model allows for consistently good performance anywhere in the world because the file segments are sent in parallel and the fastest segments are used to deliver the file.
The best part is that this model uses underutilized capacity in existing hard drives. That eliminates the costs for storage that Wasabi and its competitors all incur and significantly lowers the carbon footprint of cloud storage. The distributed cloud storage model also eliminates the extra costs for multi-region replication. When the data is automatically distributed all over the world, companies never have to worry about durability or accessibility. And with file delivery at the edge, CDNs are rarely needed. Because low cost storage isn’t just about the storage fee, it's more about the extras you need to make it work for your use case.
What can I do to keep my costs low?
Migrating to distributed cloud storage is a simple way to keep costs low today and into the future. Storj is the leading enterprise grade distributed cloud storage provider. Our solution has an S3 compatible API, and is as good or better than AWS on security and performance. And Storj is much more economical than both Wasabi and Backblaze. You can calculate the cost savings and ROI for free here.
Migration from Wasabi and Backblaze to Storj is easy and free.
Whether the price increases going into effect are motivating you to switch or you just don’t want to keep paying so much for cloud storage, Storj is a solid move. You won’t just stay within your budget, many of our customers are able to shave a zero off their monthly spend. It's a move that will save you money now and into the future. And it’s significantly better for the planet.
There is no reason to continue to get burned by Wasabi and Backblaze price increases. Switch to Storj today.