Storage: too cheap to meter?

At a recent conference, I saw Chris Anderson make a presentation in which he quoted the famous 1954 prediction by Lewis Strauss, the chairman of the Atomic Energy Commission, that “our children will enjoy in their homes electrical energy too cheap to meter.” Having paid my own electric bill last night, I think I can say with confidence that Strauss was slightly off in his forecast.

Nevertheless, it’s worth keeping his prediction in mind when thinking about computing and, in particular, data storage, as it turns, like power before it, into a utility. Dave Gurnell, a software engineer at Untyped, recently began using Amazon’s S3 storage service to back up his hard drive on his desktop computer. He was surprised, a bit later, to receive an email from Amazon warning him that it “was unable to charge your account based on the payment information you provided.” That was odd, he thought, since the credit card he had provided was valid.

He logged onto his account and discovered “that my balance was a whopping $0.01. A single cent!”

It turned out that his credit card company refused to process such a minuscule charge, so Amazon waived it. Writes Gurnell: “A month’s backups, totally free of charge – that’s value for money. I shall be recommending S3 to all my friends.”

So utility data storage, at least at a personal level, may not yet be too cheap to measure. But it is becoming too cheap to bill.

7 thoughts on “Storage: too cheap to meter?

  1. Anonymous

    Huh? seen what IBM, HP, EDS etc still bill customers in their outsourcing contracts…as high as $ 5 per gb per month…

    By my estimate outsourcers support 20 petabytes of storage (that’s 15 zeros of bytes)…lots of that storage cost to be squeezed before we get anywhere near “free”…and already Michael Dell and others are predicting shortages in storage as consumer demand expands with multi-media needs…

  2. Tom Lord


    You are comparing apple’s and oranges. S3 is not an outsourced backups service, products from those other companies are. S3 promises you a certain network protocol, 99.99% availability — backup services provide a heck of a lot more than that (and, arguably also provide less — since S3 is of more general utility). This has huge implications for the operational costs of S3 (i.e., they’re much lower per byte of capacity).

    Is Dell really predicting a world-wide storage shortage? That seems unlikely. I’ve seen him quoted in the press recently as predicting a business cycle in which demand for low-end NAS devices will spike (a market for which Dell the company is building products). That’s not the same thing as a storage shortage.

    Looking at all of the data centers being built and shipping containers packed, I wonder if we won’t have, instead, a kind of railroad boom: an initial over-build, followed by a crash, followed by a consolidation (followed a century later by de facto nationalization and ruin :-).


  3. dubdub

    You realize how much he was storing is an important piece of information, don’t you?

    Don’t you???!!

    According to amazon’s S3 calculator, I would have to be backing up only 50 megabytes/month and have no data transfer to get a penny a month charge. A DVD’s worth of data (4GB) costs 60 cents a month (again, not including bandwith, etc). The DVD itself costs 25 cents (one time).

    S3 is hardly free, but it is a viable way to archive your personal/small/medium office data. There are other solutions too.

  4. Anonymous

    Tom, it is apples and oranges…but the majority of corporate America is not using or planning to use S3 any time soon. There is a significant difference between utility computing in the “majors” and “minors” the majors we are far, far from reasonable, forget free…btw I wrote 2 companion notes on utility computing in the majors and minors below

    My point was let’s not talk about “free” storage yet…

  5. Nick Carr

    This is also, by the way, an indication that S3 has a suboptimal pricing schedule (and in this case is leaving money on the table). Flat fees are simple, but in the end utilities need to go to variable pricing.

  6. dubdub

    Nick — Sigh. Please read my comment above.

    S3 has variable pricing, based on usage and bandwidth. The poster you referenced could not have been storing a significant amount of data.

    See amazon’s S3 calculator

    Please consider hanging around the Sci-Fi writers less, or at least do a little research!

  7. Nick Carr

    S3 charges a flat fee for storage, with a few broad tiers for bandwidth use.

    The poster you referenced could not have been storing a significant amount of data.

    Yes, dubdub, I think that’s understood. He was backing up some PC files. The point is not that a typical, significant user of S3 pays a penny a month (see first paragraph of this post); it’s that networked storage is extremely cheap and rapidly getting cheaper.

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