Scaling is a hot topic in businesses, especially with startups that expect to become Slashdotted or Digged anytime soon. Google recently announced they would increase the speed at which their Gmail would gain storage capacity, mainly in response to Yahoo! and Microsoft recently upgrading and surpassing Google’s storage offerings.

Reason 1: Scaling is good for consumers

Google promised a continued increase of storage for Gmail but not for Picasa. The increase in storage for Gmail is a good thing as there is much more value in the promise of a service scaling with you, than a service that doesn’t make any clear plans. In time, we all collect more and more data and therefore need more and more storage. This doesn’t mean that our habits change, but just that it generates some nicely accumulated data.

Picasa doesn’t scale yet though, which generates some serious issues in scalability to users. For example, here is a simple graph showing a fanatic Picasa Web Albums user that (on average) uploads 4.3GB of photos per year, set over 5 years. It uses the current prices which might in time change, but at the moment it shows that a non scaling service could seriously affect your yearly costs.

As you can see, limited storage where the price doesn’t scale in time is seriously not a good deal for the consumers. In the beginning, 10GB of photo storage on Picasa will cost you $20 a year, but as you cross that limit you will have to go to $75 a year for 40GB. Although 10GB is a lot, my hypothetic user and many other users will inevitably cross this limit in time, meaning that would suddenly have to pay almost 4 times the price for the same behavior!

Note: Although Google promised a continued increase of storage, the speed might be a bit slow for some users, meaning that these services are still limited. Unlimited storage is often a good deal, but the best deal for any user is clearly highly dependent on the habits of the user.

Reason 2: Scaling is good for business

Scaling online storage is also good for (some) businesses, which is why Flickr decided to go for their model of unlimited storage. Flickr’s business model thrives on their community, and therefore getting an active community is important. Making their pro-accounts unlimited was a good thing for their customers as they got a better deal the more they uploaded. At the same time it was a good deal for Flickr as all those people uploading, tagging, commenting, and generally socializing around those photos made their business more valuable.

Obviously this doesn’t necessarily work for services where uploading more doesn’t directly add value to the product, but you would be surprised in how many cases it does make sense. In Gmail for example, the best reason for Google to add unlimited (or scalable) storage is that to them information equals money. If a lot of people start throwing away some of their “unimportant” emails because they don’t have any space left, Google loses information about us that they would love to use for showing us advertisements.

Conclusion

In short, if you ever want to offer some online storage, scalability is a good thing to think about for both consumers and business. If unlimited storage isn’t possible, making clear plans for the future of the storage adds some very nice incentive for customers to use your product over others.

This entry was posted on Sunday, October 14th, 2007 at 23:44 and is filed under Uncategorized.