Ignoring disk failures and server operating costs.

That said, 5TB isn't a huge number. It could be as low as $200 of hardware cost. With them paying $60 a year, they may or may not end up being a drain on the company's resources. Though they're definitely not paying a full share of the fixed costs the company has.

Edit: Though the full scenario is paying for three clients, so $180 for that much data, and that should easily be profitable.

We don’t know how much their servers cost, but we can extrapolate how much storage costs to store 5TB over time since they report both how redundantly they store files, their hard drive failure rate and I believe the cost per hard drive.

> We don’t know how much their servers cost

Their blog posts say it's about $3500 without drives.

I didn't pull $200 out of nowhere. If you stuff a $3500 chassis with 60 $325 12TB drives (current amazon price) and you're getting 80% storage efficiency, that's exactly $40 per usable TB.

Add an extra 25% for safety, and then add a big $400 per month for power/data/space and replacing the one-ish drive per year that fails. Assume you throw the entire thing in the garbage after five years. These are pretty pessimistic numbers, but it's still only $92 per TB per 5 years. With three accounts that's $460 dollars of direct costs on a revenue of $900.

To be profitable on 5TB in one account is much trickier. It depends on the hosting costs far more than the hardware costs, and those are hard to guess. If they're over $150, it might be impossible to break even on direct costs, even given more than five years.

Oh, and a much simpler thought came to me.

B2 is clearly going to be profitable per byte. It would charge $20 for 4TB and $25 for 5TB.

In comparison to that, $18 for 4-5TB is probably not losing money.

why assume if they are publishing annual failure rates as well as the level of redundancy? Your assumptions are wrong.

Which assumptions?

They published that they use 17:20 erasure coding. Have they published exactly how much overhead they get from their filesystem? I don't think it's unreasonable to blindly guess 5% for that.

The published drive failure rates are about one drive per year per 60 drive vault, which is exactly what I said. And we can estimate the labor cost of replacing that drive as tiny. What we don't know is the cost of power, networking, and physical space for the server. So I picked $400 (minus the drive fraction) per month as a nice round "this is double what I can find for many colocation offers, but still avoids losing money" number.