Last month, I wrote about my own Windows Home Server installation on which I rely completely for most of my work.  Everything–and I mean everything–is stored on my WHS machine.  Book chapters, articles, ISO images I need access to from anywhere, my entire iTunes library… it’s all there.  About the only thing I don’t store on my home server are my VMware virtual machine files.

To protect my data, I use WHS’ volume duplication feature, which protects me against local hard drive failure.  To protect my data from more catastrophic failure–perhaps my house burns down–I use a service from Proxure called KeepVault.  In my September 14 posting, I indicated that I’m very pleased with the KeepVault service.  At the time of the writing, the service was listed at $199/year for unlimited storage, but Proxure was running a special that gave people the same service for only $99/year.  I now need to make a correction on some newly outdated information that I wrote in that blog posting.

Imagine my surprise tonight when I was at the KeepVault site looking for something and I stumbled across their new Windows Home Server backup pricing page.  No longer is there an unlimited storage option.  The highest level option is now a 2TB tier that costs $1,499 per year.  Yes, Proxure took what was a $199 service for unlimited use, instituted a storage cap and then increased the price by a factor of 7.5.  So far, there has been no communication from the company regarding this increase, nor has their been correspondence regarding what happens on users’ anniversary dates when they will again be charged for the next year of service.  At present, I have not found a way to see how much storage space I’m using on Proxure’s servers, so I don’t even know how much space I would need to order.  I know I’m nowhere near 2TB, but their overall pricing has undergone dramatic changes.  Under the new plans:

  • Up to 100GB – $99/year
  • Up to 500GB – $449/year
  • Up to 2TB – $1,499/year

These are listed as “special prices” on the KeepVault pricing page, so who knows what the real pricing will ultimately look like once the specials disappear.

I’ll be the first to admit that I never thought that the $99/year deal that was offered would be a long-term deal as there is simply no way that Proxure can reasonably cover their costs at that price for users that use massive amounts of storage.  I didn’t even think that Proxure would continue an unlimited storage plan for $199/year.  After all, “unlimited” is a pretty generous amount of storage.  However, I never in my wildest dreams thought that I would see such a massive departure from what was considered a great deal by a great number of Windows Home Server enthusiasts that have been evangelizing the service.  Honestly, I thought that we’d see a price tag of $299 or maybe even $399 for the unlimited service.  Heck, with how I use the service, even $499 would be good!

Obviously, there is a bit of anger from the users that have been using KeepVault at what are now considered bargain prices.  In the Proxure KeepVault forums, a customer asked about the price increases and got the following response from Proxure:

“In order to maintain our excellent service and reliability, we have adjusted our pricing to remain competitive in the marketplace.”

“Adjust” is probably a poor choice of words in this instance.  It appears that one of two things happened:

  • KeepVault’s initial service was established on an unsustainable business model.  They underestimated the amount of storage that would be used by Windows Home Server users backing up their servers.
  • KeepVault pulled a “bait and switch” by luring customers in with radically low prices and then adjusted them to where they wanted them to be all along.

For the benefit of the doubt, I’ll assume that the first option is what happened.  Regardless, it’s probably safe to say that some of Proxure’s biggest users will flee the service, which is probably the real intent behind these major price increases.  It’s likely that Proxure is more interested in focusing on the lower end of the online storage market where there is more profit to be had.

Proxure should seriously consider implementing the following:

  • A way for users to see how much is being stored on the company’s servers.
  • A way to delete files on Proxure’s servers that I no longer need. Right now, even if I deleted files from my server, they are not deleted from Proxure’s servers. On the surface, this is good since it protects me if I accidentally delete a file locally, but I should have a way to actually remove files to keep my space utilization low. Further, as I move files around my server, moved/copied files are also stored on Proxure’s servers.

As I’ve indicated, I can’t really blame Proxure for increasing their prices.  Without a doubt, I want them to be able to stay in business, after all!  Where they have fallen down is in the communications department by not notifying users of the new prices or as to what happens when it comes time for existing users to renew their subscriptions.