technaut (technaut) wrote,

Permanent Storage

Most ISPs charge obscenely large amounts of money for storage on their systems, especially when one considers its actual value. Currently, mass storage can be gotten as cheaply as 60¢ per Gigabyte, and the price is dropping steadily, such that it halves roughly every 2 years.

Now, the storage that you buy in the form of a hard drive is not going to last forever. I don't know what the typical Mean Time To Failure of a modern Hard Drive is, but they are usually only warrantied for three years, so lets go with that number. (EDIT: This report may shed some light on actual MTTF rates in modern disk drives.) This would seem to indicate that a base rental price for storage, right now, is about 20¢ per Gig per year. I don't know about your ISP, but mine charges around $48 per Gig per year, a substantial difference.

If we assume that a hard drive needs to be replaced at the end of its warranty period, then the cost to replace that drive will have fallen to roughly 35% of its initial cost by that time. Three years later, its replacement will have fallen by 35% of its cost. With a bit of math we can then figure out the actual cost of storage for any length of time.

In fact, since the cost is exponentially decreasing, there is a finite price at which you would have paid for an infinite amount of time. In this case, that's equal to about 1.55 times the initial cost. So, this gives you the current cost to store a Gig of information forever to be only about 93¢.

That number is something one could build a business case around. One would have to charge more per Gig if one wanted to run a business, as there are all sorts of overheads that I haven't taken into account above, but the total price to a consumer for permanent storage would still end up being quite low. Keep in mind I'm being very conservative with these numbers. Most drives last far longer than three years.

Now, what kind of business could you run based on this? I can see several possibilities. You could sell infinitely long warranties on hard drives, promising to replace them with an equal amount of storage free of cost if they ever failed for any reason. You could start up a an online data-vault and severely undercut all of the competition. You could also make a commercial version of the Internet Archive.

This last possibility deserves some explanation. The Internet Archive takes regular snapshots of web pages and rehosts them, so that you can look to see what a web site looked like at one or more different times in the past. Naturally, they can't archive everything, and there are many holes in their coverage. Many short-lived events, like the defacement of a website appear and vanish between snapshots.

What a commercial venture would do is release plugins for Internet Explorer and Firefox which allow you to visit an arbitrary website and request that it be saved forever. You could save just the current page (which will usually cost a few fractions of a penny), or request that a whole site be spidered and stored, and the user billed accordingly.

People could use any number of micropayment schemes (including the new one proposed by paypal) or the micropayment issue could be sidestepped by letting someone open an account with the storage company, which would keep track of the minuscule charges for later combined billing.

The beauty of this scheme is that multiple people are likely to ask to have the same site preserved, but the storage need only ever be bought once, even in the case of a rapidly changing site if the company uses proper delta technology. Each additional request to store a site is pure profit.

In addition the costs of permanent storage aren't all accrued by the storage company at once. When someone pays their 93¢ for storing a Gig forever, the company need only spend 60¢ immediately. The rest will go into the bank where it will gain interest until that storage needs to be replaced. Thus the company can end up with substantial income earned on the money saved to meet future demands for technology replacement.

Thus, there are at least two obvious revenue streams that one can tap in such a company, and probably several more indirect ones depending on the details of how the company is set up.
Tags: storage
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