Mozy Pro Prices Increasing Dramatically

According to an Information Week article on Feb 27, EMC has announced new pricing for it's online backup service Mozy Pro. Under the new pricing a SOHO customer with 1 server and 10GB of data will increase from $8.95/mo to $24.95/mo. A 100GB customer will pay $224.50/mo, up from $89.50.

I am sure a lot of people are thinking that EMC is screwing up Mozy. I don't think we should blame EMC for this. Long before EMC came into the picture Mozy has been giving away free and dirt-cheap online backup accounts. This was a very effective marketing strategy for Mozy. They amassed a customer base in the hundreds of thousands, most paying nothing and others paying relatively small amounts. That business model can't be sustainable for the long-term. I think Mozy's plan from the onset was to build a big customer base with the free accounts, and then sell the company and make a ton of money for the management and VC investors. Seeing how EMC bought Mozy for $76M last fall, I would say they accomplished their goal.

EMC didn't buy Mozy to give away free accounts and dirt-cheap backup services. They probably don't have any intentions of selling the business either. I would have to believe that EMC intends to turn the Mozy business into a profit for their shareholders. I would also expect the other Mozy offerings to be adjusted with that goal in mind as well. Don't blame EMC for this, they are not the ones that created a business model that was designed to suck up market share and then sell the business.

1 comment:

Anonymous said...

I don't care what you say, EMC took over Mozy and is doing what we all expected; they are putting the screws to the customer base. All they want is our money!!! Mozy sux anyway, there are much better choices. Stay far away from EMC!!!