Backblaze: Mounting Losses, Lawsuits, Sham Accounting, Insider Selling
271 points by PaywallBuster 2 months ago | 162 comments- nikisweeting 2 months agoNone of this really shook my faith in Backblaze being able to recover until I got to this part:
> Instead, Backblaze’s new CFO, Marc Suidan, joined from Beachbody (NYSE: BODI), a multi-level marketing company
eek
- jmcguckin 2 months agoI remember when my mom used to hold Tupperware parties.
I guess they could go door-to-door selling backup or maybe hold Backblaze parties…
- hiyer 2 months agoBeachbody isn't an MLM. They sell workout programs (used to be dvds but have now moved to a subscription model). From personal experience, I can say that at least one of their programs - Tony Horton's P90X - is very good.
- lolinder 2 months agoThey have been historically [0], it looks like they only changed their model last October [1], a few months after Marc Suidan switched to Backblaze.
TFA even specifies this:
> Instead they hired Marc Suidan who joined from Beachbody (NYSE: BODI) - a publicly traded health and fitness company where he was CFO between May 2022 and August 2024 when the company was operating as a “multi-level marketing” company.
[0] https://www.cnbc.com/2011/01/31/beachbody-grows-exponentiall...
[1] https://nypost.com/2024/10/01/business/beachbody-lays-off-th...
- slenk 2 months agoThey WERE an MLM until they stopped being able to make money. There are good YouTubers out there dedicating time to getting people out of MLMs (some are basically cults). 99% of people in MLMs lose money.
If you think he is a good CFO I think you drank the coolaid.
https://marencrowley.com/podcast/the-demise-of-the-beachbody...
- tanjtanjtanj 2 months agoMy roommate freshman year of college was hocking P90X boxes and trying to get a "downstream" going. Quacks like a duck to me.
- jimmydddd 2 months agoThe workouts, including P90X, were great. The MLM part, which you and I may not have been aware of, was on the coaching side. Coaches would try to recruit other coaches to be downstream of them, and so on. Part of it was also selling their over priced protein shakes. But yes, if you were just a person who bought a P90X dvd and did the workouts, your were oblivious of this and just got in good shape and loved the products.
- cyanydeez 2 months agoMLMs focus on recruitment over product selling is what makes them an MLM. The actual product having some use is coincidence.
- 2 months ago
- sixhobbits 2 months agoI know nothing about them so not saying you're wrong but the statement "X is not an MLM" is normally a positive indication that X is an MLM.
And then promoting them also gives strong mlm vibes.
So I would bet more money on them being an mlm after reading your comment than before
- ellen364 2 months agoUnder that rule of thumb, anything accused of being an MLM will seem like an MLM, even if the accusation is absurd.
"Uh, what?? Air isn't an MLM, it's just the thing we breath. We all need it to live."
"Huh, I guess air is an MLM after all. Wild."
- slenk 2 months agoBODI was an MLM that had to stop being an MLM and are hemorrhaging money
- ellen364 2 months ago
- lolinder 2 months ago
- jmcguckin 2 months ago
- sjml 2 months agoArticle says they're losing customers to Wasabi, but as far as I can see on a quick perusal of their website, Wasabi is just straight storage? For me, a lot of the benefit of Backblaze comes from a (mostly) good client solution that handles the automated backup. The backup history upsell is also great for someone (like me) whose travel patterns often mean going months without reliable internet.
I know I could use some open source stuff to get similar functionality, but I feel almost as nervous rolling my own backup as I would rolling my own crypto. Does Wasabi have some client solution that I'm missing?
- esperent 2 months agoBy coincidence I just spent several hours today comparing exactly these two services (Wasabi vs B2) and even though I am familiar with Backblaze and have used it before, I went with Wasabi. It's basically the same price, has more regions, a very simple interface, and rather than having to manage both hot and cold storage Wasabi is cheap enough to just throw everything into hot.
The only downside I found is that they limit free egress to 100% of your storage (so if you store 1tb, you get 1tb egress). In practice I don't think this will be an issue for my use case.
So I'm an example of a person who this morning had almost never heard of Wasabi, knows Backlaze well, and after an hour or two of research I have completely switched over.
- mdasen 2 months agoIsn't B2 cheaper than Wasabi? B2 is $6/TB while Wasabi is $6.99/TB. Why would you have to manage hot and cold storage with B2?
Wasabi also treats every object as having a minimum 90-day storage period. So if you upload something and delete it, it's still considered "stored" for billing purposes for that 90-day minimum.
B2 also gives you 3x storage as free transfer compared to 1x for Wasabi.
I'm not saying you shouldn't go with Wasabi, but the reasoning you've articulated doesn't seem to track.
- masfuerte 2 months agoAdditionally, Wasabi bills you for a minimum of 1TB of active storage, which is $6.99/month. For my modest backup needs it is way cheaper to use any service that bills per GB.
- smileybarry 2 months agoWasabi used to be the cheaper option when B2 didn't offer variable free egress. B2 was basically "cheaper S3" as it still charged $0.005/GB for egress, while Wasabi was free egress (I think their upper limit used to be >1x your storage, so maybe that changed, or I'm misremembering?).
If your storage was fairly consistent, not tiny, and you intended to pull it regularly, Wasabi would come out on top. B2's egress change probably shifted the scales to favor B2 for those cases.
- Manouchehri 2 months agoWasabi also charges objects at a minimum 4KB of storage, which isn’t great if you have millions of files at 1-2KB.
- masfuerte 2 months ago
- mdasen 2 months ago
- gruez 2 months ago>Article says they're losing customers to Wasabi, but as far as I can see on a quick perusal of their website, Wasabi is just straight storage?
That's addressed in the article:
>Since 2021, Backblaze’s B2 Cloud Storage segment revenue growth has outpaced its legacy Computer Backup segment. In Q4 2024, the company announced that its B2 Cloud Storage segment generated $17.1 million in revenue, surpassing its Computer Backup revenue of $16.7 million.
Even if Wasabi isn't a straight replacement for Backblaze's entire business, it's a replacement for its biggest and fastest growing segment.
- nikisweeting 2 months agohow in the world do they only make $17.1 in revenue, everyone I know is on BackBlaze, even if they're only used by techy people I'm surprised they're not making $100m+/quarter.
- gruez 2 months agoAnecdotally most people, even "techy people" don't do actual backups. At best, they have icloud/google backup turned on for their phone, and upload important files are on dropbox/onedrive.
- geerlingguy 2 months agoThey're cheap (the reason many people use them), and the number of people we know that use them is ridiculously outsized compared to the general population, because we know people in the tech sphere.
- conradfr 2 months agoMaybe you know their entire customers base.
I know nobody who use them, so it all balances itself.
- anon7000 2 months agoI mean, my B2 monthly bill is like 17 cents.
If they don’t have enterprises and people storing large amounts of data...
- gruez 2 months ago
- j45 2 months agoAppreciate the intro to Wasabi, happy to learn about others too while evaluating backblaze.
- nikisweeting 2 months ago
- e40 2 months agoI used to be a customer of computer backup, but had issues with it and their support suggested I delete my backup and start over with a new account. I was flabbergasted. On macOS btw.
I ended up rolling my own solution with rclone and testing b2 and r3, going with b2 because of the price and speed.
- sandbags 2 months agoYears ago I used Backblaze and it twice "lost" my entire backup with their support staff shrugging and suggesting I start it again. At that point I didn't have fibre so a full backup was weeks if not months. Needly to say I opted out of their service. I am not overly surprised that this is not a solved problem.
- e40 2 months agoYeah, it's clear it has bugs and doesn't work well. rclone to B2 works fine for me. And I tested with Cloudflare R2 and can switch to it if BB goes under.
R2 was slower than B2, in my tests. I think it's slightly more expensive, too, but not much IIRC.
- e40 2 months ago
- sandbags 2 months ago
- tw04 2 months agoYou’re missing the point. Enterprise customers where they would presumably see the bulk of their profits is what they’re losing to wasabi. Commercial “unlimited backups” is not a wildly profitable business which is why basically every other competitor in the space either failed or intentionally exited the market segment.
- sjml 2 months agoAh, got it; that makes sense. Thanks for the clarification.
- sjml 2 months ago
- dehrmann 2 months ago> but I feel almost as nervous rolling my own backup as I would rolling my own crypto
Is there a Restic frontend for Windows that you'd be comfortable setting up a family member with?
- cheshire_cat 2 months agoIt's not Restic, but Kopia has an optional GUI and runs on Windows: https://github.com/kopia/kopia
- cheshire_cat 2 months ago
- PaywallBuster 2 months agoBackblaze business is 50% object storage (from financial statements)
That's where Wasabi is taking customers
- esperent 2 months ago
- lud_lite 2 months agoAs a customer do I need to worry? It is my favourite cheapo backup.
- klodolph 2 months agoI recommend worrying about any service where you don’t pay a fee that scales with usage. This includes Backblaze. Yes, I recommend worrying about Backblaze and I’ve recommended worrying about it for a while.
Storage costs money. People love to dream up creative business models where your personal storage is subsidized by some other part of the business, but I think it’s just a matter of time before the business model changes. At the end of the day, there’s a massive gravitational pull that brings everything in line with market rates. These days, I think we have a pretty good idea of what market rates are for cloud storage. Anything less than market rates should be viewed with suspicion.
From another angle, in any long-term relationship with a vendor, you want the vendor to make money. We know that major cloud vendors do, or at least close enough, because they charge the same for small customers and big ones (or close enough). None of them offer unlimited data… or at least, not any more (most of them used to, but those parts of the business always get shut down).
- rsync 2 months ago"I recommend worrying about any service where you don’t pay a fee that scales with usage."
This is the issue and it is a heuristic that people need to develop.
Your provider especially your backups provider needs to have interests that are aligned with your interests.
The non-B2 portion of Backblaze has a financial incentive to keep you from using their product and to use as little of their space as possible. This is a bad, misaligned set of incentives.
On the B2 side, all of our suspicions about the (well timed) "me too" IPO have been confirmed with each and every quarterly report showing increased debt load and the classic "losing money but making up for it on volume".
Now that money isn't free anymore it's just a matter of time.
The sad part is they don't use standard, commodity JBOD enclosures so there won't even be anything useful in the fire sale :(
- mindslight 2 months ago> The sad part is they don't use standard, commodity JBOD enclosures so there won't even be anything useful in the fire sale :(
Can you elaborate on this? They mount in a standard rack and it looks like they have a backplane connected to a commodity motherboard. I'd think if you wanted it to be a JBOD you could replace the motherboard with an external SAS connector. Based on your nick I'm sure you've thought this through so I'm curious.
The only thing I see is that it looks like you have to slide the whole unit out to swap a drive, but that seems like an inconvenience rather than a show stopper.
- klodolph 2 months ago> Your provider especially your backups provider needs to have interests that are aligned with your interests.
I also think about all those cafés with free WiFi, where you buy a single coffee and take up a table for six hours while you browse Facebook and have your screenplay open in the background. I benefit, but the café doesn’t.
- mindslight 2 months ago
- gruez 2 months ago>These days, I think we have a pretty good idea of what market rates are for cloud storage. Anything less than market rates should be viewed with suspicion.
Are you talking about their B2 product or their backup SaaS? The former has "fee that scales with usage", and the latter probably has enough normal users (ie. not data hoarders backing up 50 TB on the $99/year plan that they're not losing money overall.
- klodolph 2 months agohttps://www.backblaze.com/cloud-backup/pricing
$99/year with no limits on data, as far as I can tell. The context here is someone talking about personal backups, not Backblaze’s broader offerings. We know the market rates for cloud storage, more or less, since they’ve converged somewhat, across the industry. This makes it easy to calculate what kind of usage patterns would lead someone to save money at Backblaze.
Cloud services often have a free tier or cheap tier to attract new customers. IMO, this is not it. This is a product. These people are not turning around and signing contracts with Backblaze at work. At least, not many.
So it could be that people are just using it below its limits, or it could be that it’s subsidized by other parts of the business. Overall P&L is irrelevant—you want to be able to explain this product as a profitable product, as some viable sales channel, or as marketing.
My recommendation is to buy storage products where the company is making money off you, or nearly.
- mingus88 2 months agoAccording to the article they _are_ losing money overall, every quarter since the IPo
- klodolph 2 months ago
- Spooky23 2 months agoI’d make the exception for Google Drive, OneDrive and whatever the AWS one is. The hyperscalers are able to get prices way cheaper with economies of scale and price models in a sustainable way.
When O365 launched, they were using spinning disk for exchange. The issue was that they stranded capacity because of the IOPS needs of exchange. So “free”, (low iops) SharePoint and OneDrive for business data utilized that “free” capacity.
- rsync 2 months ago"I’d make the exception for Google Drive, OneDrive and whatever the AWS one is."
No - no exceptions.
We must, as sophisticated 21st century actors, insist that providers (especially providers of critical services) have financial interests that align with our own interests.
I don't care how big the parent is or how much money they have to burn - if it makes financial sense to keep you from storing your backups you need to go elsewhere.
- j45 2 months agoThe economies of scale go into profit for them while still incrementally increasing costs for clients.
If it was aligned with economies of scale, customers would get more storage for the same price every year.
We don't hear about cloud prices coming down that often.
- rsync 2 months ago
- j45 2 months agoStorage is a fixed fee (space on a hard drive). It make money every month when it sits there and is used.
Bandwidth costs can seem like a lot more, but when you purchase a 10 gig fibre, you have unlimited data, up until the full speed of the 10 gig fibre, 24/7. That number in TB can be calculated.
Clouds massively mark up services. Ones that underprice can have the opposite problem.
I have heard good things about the Backblaze service itself, and appreciate the hard drive reviews they put out.
- lud_lite 2 months agoThanks! I suspect that for my use case (actual backup no meed for cloud access) s3 glacier is statistically cheaper.
- gruez 2 months ago>actual backup no meed for cloud access
How do you test your backups? You do test your backups, right? Your other comment mentions using dropbox, but that's hardly a real backup solution, and you could easily run into a situation where you need to retrieve files beyond the 30 day window.
- gruez 2 months ago
- leidenfrost 2 months agoWhat do you recommend as an alternative? I use it as a cheaper replacement to S3
- geerlingguy 2 months agoI backup to Amazon Glacier S3 Deep Archive backed buckets. The price is only a little higher for a few TB than other providers, though egress fees in case of restore are a lot higher. That's a tradeoff I'm willing to make as I'd have two have two separate local NAS replicas corrupt or die before I need to rely on the Deep Archive.
- Spooky23 2 months agoFor raw backup, I use GCP. Pricing is similar to AWS and the deep storage is easier to use.
For most regular people, I suggest Google Drive or OneDrive because you get the value add of the their ecosystem. With Google, Photos are good. With Microsoft, the Office+OneDrive subscription is a great value.
- billfor 2 months agoIDrive.
- geerlingguy 2 months ago
- immibis 2 months agoYou should worry they'll increase the price and worry they'll delete your data if you don't pay the higher price. It's not necessary to worry they'll go out of business just because they are charging a fixed price. They'll raise the price long before going out of business.
- j45 2 months agoHaving your own NAS in the mix more and more is unavoidable.
On one side, the cloud is someone else's computer they will always charge more an more for it because customers have not learned the economics of cloud hosting and how profitable it is on the other end.
On the other side, a NAS is your storage computer, in a simplified home appliance form. Connect it to back up to any cloud you wish.
- j45 2 months ago
- jillyboel 2 months agoHuh? b2 absolutely scales with usage. Here is their pricing page: https://www.backblaze.com/cloud-storage
- rsync 2 months ago
- everfrustrated 2 months agoThey're not at risk of going bankrupt. This is more about confidence in the company to go anywhere that would help the share price.
The company is being plundered and run for the benefit of the exec team printing shares for themselves. Nobody should be buying shares expecting the price to rise.
- stego-tech 2 months agoIf the service isn’t making money consistently, I would worry about its long-term viability. This is basic commoditized storage they’re managing to screw up making a profit on, not some super-niche or brand-new product line.
It’s bits in a barn, and they’re not making rent. That’s worried me enough to re-evaluate my relationship with them, especially in light of this research.
- dist-epoch 2 months agoIf it's your only backup, yes, you definitely should.
- lud_lite 2 months agoIt's one of two backups. The software is great. Dropbox level of just works. iDrive by comparison is cheaper but always errors and files it couldn't touch.
- nikisweeting 2 months agoYeah do NOT do iDrive if you use git or care about symlinks, I learned the hard way. Backblaze doesn't backup symlinks either for that matter...
- nikisweeting 2 months ago
- lud_lite 2 months ago
- PaywallBuster 2 months agoThey already increased price from $5 to $6 sometime ago
Financial statements indicate they selling services at 50% margin, but all the extra sales/admin/R&D add up to a loss
They could cut all of that I guess, it's not like object storage need a lot of innovation and they've already stopped making their own storage servers and
- klodolph 2 months ago
- mikeryan 2 months agoTotally an aside but is Morpheus what happened to the Hindenburg Research guys after the founder of that stepped away? The site is eerily similar and the timing makes sense. I loved reading Hindenburg’s research.
- sndean 2 months agoI think so, or at least they have Hindenburg alumni working for them: https://x.com/NateHindenburg/status/1900596203156304371
- justinclift 2 months agoAny idea why the founder stepped away?
- mikeryan 2 months agoSounds like he just decided it was time. He wrote a pretty gracious post about it.
https://hindenburgresearch.com/gratitude/
Funny, I wrote this without seeing what the full URL was (I’m on my phone) so the use of the word “gracious” preceded me knowing the path was /gratitude
- SSLy 2 months agoTo me, the Hindenburg Research announcement seemed to suggest that they were being threatened by the subjects of their research.
- mikeryan 2 months ago
- sndean 2 months ago
- guerrilla 2 months agoWell if they go out of business where the hell am I going to get my hard drive statistics from? ;D
- tgtweak 2 months agoDid they cook the books on those too?
honestly I participated in the IPO then sold when it was up a bit - I had faith in their fundamentals as a business but they did not seem mature as a public company.
- guerrilla 2 months agoI don't know what the incentive would be for doing that. Could they use it to drive prices on HDDs lower somehow? I vaguely recall them being activist as far as quality.
- guerrilla 2 months ago
- tgtweak 2 months ago
- rdtsc 2 months ago> While Budman claimed that he wanted to avoid any appearance of trying to “time the market,” he appears to have done so nearly perfectly, as Backblaze’s shares crashed by as much as 26% intraday following the announcement and have continued to slide ever since.[5]
Doesn’t that seem like insider trading? I guess he can claim he didn’t know so and so was going to quit.
- hinkley 2 months agoNot to say he’s innocent, but insiders can also trigger market crashes just by selling their stock. There are public records of substantial holdings by company insiders and while I don’t think they’re made available immediately, they are updated periodically and people can and do read into it.
That’s part of why they usually deputize a brokerage to periodically sell a fraction of their holdings at intervals.
It’s been a long while since I paid any attention to this but I do believe I saw at least a couple of instances of an insider triggering weakness in their stock just by increasing the rate of sale of their holdings.
- rdtsc 2 months agoYeah it would have to be something like that. It seems a too obvious of a move, so I figured he might have had a solid loophole.
- hinkley 2 months agoTo wit: Bill Gates did a bunch of press before starting his foundation to make it clear that him selling MS shares was not about concerns over MS’s future but that he needed a shitload of money for other pursuits.
And Warren Buffet would use many frontmen to slowly buy shares without triggering a buying frenzy. You can’t just buy or sell 3% of a company without causing drama.
- hinkley 2 months ago
- rdtsc 2 months ago
- Spooky23 2 months agoIt almost certainly is. Canceling the planned sale makes it look even worse.
But… are there securities laws in this era where policy decisions are timed to pump/dump the lowest?
- hinkley 2 months ago
- avsteele 2 months agoVery happy with their B2 storage. Easy to use, works well, prices fine. I use it as a backup target for several of my Synology NAS's. I hope they stay in business
- PeterStuer 2 months agoWasabi a more known brand than Backblaze in the storage space? Doubt!
- mdasen 2 months agoIt might depend on who you are. I think Backblaze is well known on here because they've been around for longer and their hard drive stats posts are well liked.
If you're a less technical CTO, Wasabi seems to do a lot more traditional marketing on things like sports games: https://ibb.co/21qNkM9b (NBA, NHL, Premier League soccer). I'm not saying that makes them better, but a lot of people with purchasing power are going to be seeing Wasabi around.
Wasabi has also been pushing value-add services on top of their storage with Wasabi AiR (https://wasabi.com/cloud-object-storage/wasabi-air). It's basically an AI-powered database of your content. If you're running a place generating lots of content, having a system automatically tag and make searchable all those images and videos is a really nice value-add. Being able to search for a video clip containing a specific person in your library junk pile of video can be nicely useful for a lot of organizations.
It could just be that different people get their brand awareness from different places.
- mdasen 2 months ago
- Fizzadar 2 months agoMoved to wasabi from their s3-like b2 product because it was so utterly unreliable. Pretty wild list of things if true.
- e40 2 months agoI use b2 and never had any issues. What problems did you have?
- e40 2 months ago
- everfrustrated 2 months agoMorpheus Research should look at Fastly next.
- sndean 2 months agoCan anyone recommend a decent Backblaze alternative in case things really go south? Not so much for storage but for the automated computer backups that I have Backblaze doing. I'm okay paying more than Backblaze's $9/month.
- wmf 2 months agoI haven't tried it but Arq has a good reputation.
- tinodb 2 months agoI’m using Arq which backs up to a Hetzner storage box. Cheapest €/TB I could find.
- cantrecallmypwd 2 months agoMuch data, medium risk tolerance: Mega
Small data, or low risk tolerance: Tarsnap
- rsyring 2 months agoTarsnap restore times are crazy slow. Avoid.
We replaced with Borg.
- rsyring 2 months ago
- ryao 2 months agoI have no experience with them but I have heard good things about rsync.net. They use ZFS.
- bartvbl 2 months agoI use Jottacloud, which is quite similar in many respects.
- wmf 2 months ago
- memset 2 months agoWho are the players in the “s3 compatible but cheaper than AWS” space?
- Wasabi
- idrive
Who else?
- manquer 2 months agoAlmost every cloud provider outside of Azure and GCP have an s3 compatible offering . S3 API is de-facto standard for object storage tooling
Cloudflare, scaleway, hetzner, OVH, Oracle, minio and dozens of others all have s3 compatible object stores
Most of them expect AWS have at least inter cloud transfer free (or discount Azure and GCP) being part of bandwidth alliance(BWA).
AWS S3 pricing is designed to keep you in the ecosystem , not be the cheapest, so tend to be costliest not cheapest unless your workload is archival.
For almost all non archival workloads egress costs will be on par or much higher than storage costs and AWS[1] charges a lot for any bandwidth.
AWS also makes migration really expensive so if you started with them, you are likely stuck as you would have to pay up to 10-12 months of cost to migrate out if you are on anything but the standard tier (cheaper the tiers higher the retrieval costs)
[1] All tier one providers have 10-20x b/w costs compared to tier two , however Azure and GCP discount for inter cloud transfers AWS does not
- Manouchehri 2 months agoGCP has an S3 compatible endpoint for GCS. I’ve used it and it works fine.
It’s only Azure that isn’t on the S3 API train.
- manquer 2 months agoYeah you are right, thank you the correction.
I vaguely remembered they announced it, but didn't find it on a quick search, thought maybe I was wrong.
- manquer 2 months ago
- memset 2 months agoUnderstood. Are there lesser-known providers that I could consider for hobby projects?
- j45 2 months agoWasabi seems reasonable.
- j45 2 months ago
- Manouchehri 2 months ago
- Manouchehri 2 months ago
- memset 2 months agoExactly what I was looking for - thank you!
- memset 2 months ago
- thomasjudge 2 months agoHow about S3 Glacier?
- cvalka 2 months agoStorj
- manquer 2 months ago
- registeredcorn 2 months ago> Initial Disclosure: After extensive research, we believe the evidence justifies a short position in shares of Backblaze (NASDAQ: BLZE). Morpheus Research holds short positions in BLZE, and Morpheus Research may profit from short positions held by others. This report represents our opinion, and we encourage all readers to do their own due diligence. Please see our full disclaimer at the bottom of the report.
Although I appreciate that they included this, I can't help but feel it would have been more apparent if this statement had been included before the bullet points of the article. By the point I saw that statement, I had already formed an opinion on Backblaze. Although I am not saying Morpheus has done anything inherently dishonest, I do think the placement was intentional, and that it would have served the readership better if it had been the first thing that readers see.
- cj 2 months agoFrom the article (TLDR: the author has a financial interest in seeing their stock decline)
> Initial Disclosure: After extensive research, we believe the evidence justifies a short position in shares of Backblaze (NASDAQ: BLZE). Morpheus Research holds short positions in BLZE, and Morpheus Research may profit from short positions held by others. This report represents our opinion, and we encourage all readers to do their own due diligence. Please see our full disclaimer at the bottom of the report.
- Spooky23 2 months agoSure, but I’d more worried that the founders and management seem like they are short. The CEO left, announced a big stock sale, cancelled it, then dumped a bunch coincidentally when the CFO left (but before disclosure). Then the company hired an MLM CFO.
Oh, and the finance employees refused to sign off on the books and a few are suing the company.
It sucks, but Backblaze is cooked.
- cj 2 months agoSure, I agree.
But this is a hit piece. For any hit piece, I think it’s important for readers to know the motivations of the author, regardless of the validity of the claims.
- cj 2 months ago
- gruez 2 months agoThat's basically how every short report works. Finding corporate malfeasance and writing a report costs money, and Backblaze isn't famous enough that journalists from the new york times or propublica would go after them. So the only people with incentive to expose such corporate malfeasance are short sellers.
- dist-epoch 2 months agoAnd contrary to popular opinion, Taleb thinks that you should put more weight on such opinions, because they have skin in the game and are willing to back their beliefs with money. Short selling is not risk free, if they are wrong, they will get burned.
- hobs 2 months agoI mean, just read the article - if half the stuff stated is true its pretty bad, though its interesting how much of the drama is centered around 2022.
- tw04 2 months agoIf half the stuff stated is not true, he’ll assuredly be facing a lawsuit.
- tw04 2 months ago
- jillyboel 2 months agoAnd writing articles like this makes it more likely they become right
- Spooky23 2 months agoWell yeah, when people find out that someone is stealing from them, they tend to not want to do business.
- 3eb7988a1663 2 months agoThat is how short selling works. Do lots of research, find some fatal flaw in a business model that everyone else has missed, and put money on the position. The final step is you have to advertise your findings, otherwise you are sitting on secret knowledge which the market will not price appropriately.
- Spooky23 2 months ago
- hobs 2 months ago
- dmtroyer 2 months agoI would have appreciated seeing this at the top of the article.
- Spooky23 2 months ago
- Havoc 2 months agosigh...literally just recommended it to a family member as the simple option
- EasyMark 2 months agodo some research, this article smells of hit piece, especially since the author is set to make money off of bad publicity for the company.
- nodesocket 2 months agoYou should not stop recommending Backblaze due to a short seller's opinion piece. What are their motivations?
- EasyMark 2 months ago
- jmcguckin 2 months agoI think Backblazes pricing model is unsustainable and expect them (and any competitors who mimic their model) to eventually fail when the money runs out. Racks and racks of disk drives use a lot of power and cost a lot to keep running. A better model would be storage based on tape; one of those large tape libraries (e.g. iceberg) with nearline disk space. Most of the data that gets uploaded never gets accessed, so keeping it on tape instead of spinning rust makes sense. Sure, there’s tradeoffs, but imagine how much they’d save if they could downsize their data center spending by 90%.
- aghilmort 2 months agough backblaze was great alt to S3 the heroku of storage for a while, used them often few years ago
- erichocean 2 months agoShort-seller writes disparaging article to move market, news at 11.
(At least they disclose it at the bottom, but it should be in the title.)
- PaywallBuster 2 months agotl;dr
this is activist short seller report/investigation, some of the points made:
- never been profitable
- execs selling aggressively
- loosing customers to Wasabi
- accused of cooking the books
- being sued by former execs for anti whistleblower/wrongful termination
- execs leaving
- ryao 2 months agoWasabi uses ZFS while backblaze does not. I wonder if this in any way contributed to the cost differences.
- Twirrim 2 months agoBackblaze uses erasure encoding, which is currently the best and most efficient way to do storage. It's how every major object storage platform works.
The very quick high level explanation is that in storage you talk about "stretch factor". For every byte of file, how many bytes do you have to store to get the desired durability. If your approach to durability is you make 3 copies, that's a 3x stretch factor. Assuming you're smart, you'll have these spread across different servers, or at least different hard disks, so you'd be able to tolerate the loss of 2 servers.
With erasure encoding you apply a mathematical transformation to the incoming object and shard it up. Out of those shards you need to retrieve a certain number to be able to reproduce the original object. The number of shards you produce and how many you need to recreate the original are configurable. Let's say it shards to 12, and you need 9 to recreate. The amount of storage that takes up is the ratio 9:12, so that's a 1.3x. For every byte that comes in, you need to store just 1.3x bytes.
As before you'd scatter them across 12 shards and only needing any 9 means you can tolerate losing 3 hard disks (servers?) and still be able to retrieve the original object. That's better durability despite taking up 2.7x less storage.
The drawback is that to retrieve the object, you have to fetch shards from 9 different locations and apply the transformation to recreate the original object, which adds a small bit of latency, but it's largely negligible these days. The cost of extra servers for your retrieval layer is significantly less than a storage server, and you wouldn't need anywhere near the same number as you'd otherwise need for storage.
The underlying file system doesn't really have any appreciable impact under those circumstances. I'd argue ZFS is probably even worse, because you're spending more resources on overhead. You want something as fast and lightweight as possible. Your fixity checks will catch any degradation in shards, and recreating shards in the case of failure is pretty cheap.
- cantrecallmypwd 2 months agoMore or less.
XFS or ext2 (or 3 or 4 wo journal), without LVM or mdraid.
There's no point to adding RAID at the hardware or OS level for object storage boxes when redundancy exists at the application level. A drive with too many errors will be marked "dead" and just spun down and ignored.
Metadata servers OTOH tend to be engineered to be much more reliable beasts.
- srean 2 months ago> It's how every major object storage platform works.
Very interesting. Could you name a few, am curious. I would be happy if erasure codes are actually being used commercially.
What I find interesting is the interaction of compression and durability -- if you lose a few compressed bytes to reconstruction error, you lose a little more than a few. Seems right up rate-distortion alley.
- cantrecallmypwd 2 months ago
- ksec 2 months ago>Wasabi uses ZFS
Can't seems to find anything specific about Wasabi uses ZFS on Google. And Wasabi doesn't change you on egress. So I guess they are similar in terms of pricing.
Although B2 seems to be way more popular on HN. I rarely see Wasabi here.
- ryao 2 months agoThere is the testimonial on Klara Systems’ website:
"The developers at Klara Inc. have been outstanding in helping Wasabi resolve ZFS issues and improve performance. Their understanding of ZFS internals is unmatched anywhere in the industry" - Jeff Flowers, CTO, Wasabi Technologies
You could also search the OpenZFS repository for commits with the word Wasabi in them.
- badlibrarian 2 months agoBook price is $6.99/TB for Wasabi vs $6/TB for Backblaze. Wasabi charges 90 days minimum for storage, and egress bandwidth is limited (honor system) to your total monthly data storage amount.
- rustc 2 months ago> And Wasabi doesn't change you on egress.
Wasabi only allows as much egress as the amount of data you're storing and I don't think you can even pay for more: https://wasabi.com/pricing/faq#free-egress-policy.
- cs02rm0 2 months agoCircumstantial, but they want software engineers specifically with knowledge of ZFS:
- trollied 2 months agoBackblaze don’t charge egress if you put it behind Cloudflare (even the free tier).
- ryao 2 months ago
- perrygeo 2 months agoI suspect it does. When I was evaluating Wasabi years ago, the sales engineers were very interested in knowing what specific kind of data we had and how compressible it was. So my guess (pure speculation) at the time was they use ZFS compression internally but charge customers for the uncompressed size.
- Twirrim 2 months agoIf they care about compression at the ZFS level, that means your file is going to be visible to anyone able to log in to the server, because they're relying on (at best) encryption at rest. That's not a great security model for a storage service. You don't want anyone to be able to log in to a server and see your actual files unencrypted.
If they're going to compress/decompress, ideally you'd want them to have that at the point of ingestion, then encrypted, and then store that on the target drive.
That way you can put very strong controls (audit, architecture, software etc) around your encryption and decryption, and be at reduced risk from someone getting access to storage servers.
- dist-epoch 2 months agomost of the files that matter, the big ones, are already compressed/high entropy - images, videos, ...
- Twirrim 2 months ago
- 2 months ago
- k8sToGo 2 months agoWasabi also has a minimum storage requirement of 90 days
- mkj 2 months agoWasabi doesn't seem to be a public company, so are they profitable?
- Twirrim 2 months ago
- ryao 2 months ago