Okay, the only thing worse than a string post is the promise of a string post the next day and then not following up on it for a week.  Guilty.  Actually there a lot of things worse than either of these things, but my apologies anyway.

I posted at some point last week about the pricing decisions we are making around the centralized video storage capability.  In that post I posed the question as to how much storage we should include with our base service, assuming that providing some amount of storage is good so that people could try the service and providing unlimited storage is bad bc that is only good for the few customers that would take advantage of the business model and suddenly archive 10 years worth of video “for free”.

After debating this internally for a little while, we came to the conclusion we were thinking about it wrong.  We had been trying to figure out the minimum amount of storage we could provide so that customers could try that aspect of our service (just enough) but we could still charge a lot of customers that would exceed this threshold.  We concluded this was a shortsighted approach – if we provide 500Mb or 500Gb of central storage with the base service, it doesn’t really matter that much from a cost standpoint - storage is cheap (and saavy customers know this).  What does matter is figuring out how customers are going to use the service and how to make it more valuable for them.  To do that you we need to give customers enough central storage to enable them to utilize it in creative ways that help improve their business.  If we give them too little we’ll constrain their ability to use it and fewer new applications and use cases will likely be created.  If we give them a decent amount of storage (more than enough) and let them play, they’ll figure out ways to use it to create value.  If we pay attention we can learn from this and enhance our service to accomodate their new needs.  At that point they should be willing to pay us more if our enhancements drive real value for them.  They should definitely be willing to pay more than they’d pay for simply another 100Gb of storage.

Net of all of this is we are going to be generous with initial storage to let customers experiment and won’t have a pricing model that is directly tied to the amount of storage you get on the network.  We are after all selling a service, not a hard-drive.