Unlimited Cloud Storage Nearly Drove Bitcasa to Bankruptcy

logo-WHIR

This article originally appeared at The WHIR

Bitcasa has unveiled more details about why it had to discontinue its unlimited cloud storage plan in an interview with Gigaom on Tuesday. According to Bitcasa CEO Brian Taptich, the company could simply not afford to keep unlimited-storage users as customers.

Taptich told Gigaom that one customer who stored 82 terabytes of data with the unlimited storage plan was costing the company between $3000 and $4000 per month.

Bitcasa announced the change at the end of October, and said that a growing number of “suspected abusers” meant its Infinite cloud storage service was no longer a viable business model for the company, even though only 0.5 percent of Bitcasa accounts required more than 1TB of storage.

Taptich said that Bitcasa’s encryption technology prevented the company from seeing who the data belonged to, which means it couldn’t get rid of data that belonged to inactive users on its servers. Its new infrastructure, on Amazon, will prevent this by letting the company know when data is tied to inactive accounts.

One customer, upset by the discontinuation of the unlimited storage plan, launched a tentative class-action lawsuit against Bitcasa. He claimed Bitcasa didn’t give him enough time to migrate data. US District Judge William Alsup ordered the plaintiff to pay for $99 for an additional month under the company’s new pricing plan if he needs more time to migrate data.

According to Gigaom, the legal documents stated that the court-ordered extension was likely to push Bitcasa into bankruptcy within weeks or days. Taptich told Gigaom he couldn’t comment on specifics because of the pending court case.

This article originally appeared at: http://www.thewhir.com/web-hosting-news/unlimited-cloud-storage-nearly-drove-bitcasa-bankruptcy