I got an email this morning from a long-time user complaining about our recent price increase: "It's great that you've released Remote Access, but why does that justify a price increase?" As you may know, we recently increased our yearly subscription fee by $5, to $54.95. The simple fact is that the size of our average user's backup is growing by about 3% per month. That's 36% more data every year, and consequently we have to buy 36% more disk space and pay for 36% more bandwidth. Luckily the price of disk storage is also coming down, so we can keep our price increase to just 10% after 3 years. There's a new generation of less expensive 2TB drives coming out later this year that should allow us to hold this price for quite a long time — certainly several years. Meanwhile, we're still 10% less expensive on an annual basis than the companies that are hawking $4.95/mo ($59.40/yr).

— Dave
CEO, Carbonite

When Carbonite entered the online backup market in May 2006, everyone in the online backup business was pricing their services by the gigabyte. We introduced the first backup service with unlimited storage for a fixed price. Why? Because our market research showed that people didn't like having to learn new software applications and they didn't like having to figure out what they needed to back up. If your backup is limited to, say, 5GB, you are forced to pick and choose files and folders. We envisioned a service that didn't require the user to do anything other than put in an email address and password.

Many people think that we came out with unlimited backup in order to win the "gigabyte war" vendor A gives you 5GB for $5/mo, vendor B gives you 10GB for $5/mo, and so on. But that's really not why we decided on unlimited backup – the REAL reason was simplicity of the user experience. If you make the capacity unlimited, then the user doesn't have to make any choice – we just back up everything by default.

What happened, of course, is that our direct competitors were forced to switch to an unlimited pricing plan, but THEY DIDN'T CHANGE THEIR PRODUCTS! They missed the point. You still had to learn new software. Every bit of complexity makes it harder for the user and lowers adoption rate.

We are committed to one simple task: protect all the valuable data on your computer with the absolute minimum of effort and at the lowest possible cost to you.

— Dave
CEO, Carbonite