Cloud storage supplier Wasabi is a stick-to-your-core-focus business and its core focus is offering disk drive-based S3 object storage in its cloud, with the pitch being that it’s cheaper than Amazon with no egress fees.
Update: Note on Backblaze reserve capacity deals added. 29 November 2023.
Although Wasabi is not a technology trailblazer it must be doing something right because, as EMEA VP Jonathan Howes pointed out, Wasabi is growing at twice the cloud storage market’s average growth rate, according to IDC numbers. In late 2022 it had more than 40,000 customers and Howes says it now has 60,000.
Howes and Wasabi’s VP for Cloud Strategy, David Boland, briefed us earlier this month and extended what we had learnt from an interview with Wasabi CEO and co-founder David Friend in February. Boland said Wasabi basically replicates its cloud datacenter pattern in each of its 13 regions. A set of servers and disk-based storage chassis plus software will be installed in a co-location datacenter, often one run by Equinix. It’s expanding by growing the customer base in a region and also by adding regions.
There is no wish to add additional tiers of storage, such as, for example, a tape archive tier, or faster-access SSD tier. It does supply a file access service, Wasabi Cloud NAS, but this is basically a NAS gateway running on-premises and providing file-access to files stored as objects in Wasabi’s S3 cloud repository.
It also supplies multi-tenancy and accounting software to its MSP customers so they can sell white label or Wasabi-branded cloud storage to their customers and get up and running in a short time.
Howes said Wasabi has qualified its software as a backup target for data protection suppliers, such as Veeam. He claimed that it’s not seeing competition from on-premises, object-based backup targets, and suggested these serve a separate market. Nor is Wasabi seeing competition from Web3, decentralized storage suppliers, it told us.
Howes agreed that Wasabi is a tier 2 cloud storage provider, in general revenue terms, with AWS, Microsoft and GCP in tier 1, and CSPs such as Backblaze and OVH Cloud in a tier3.
Wasabi charges $6.99 per TB per month pay-as-you-go storage while Backblaze charges $6.00 per TB per month, with neither charging egress fees. However Backblaze does levy an egress fee of $0.01/GB once a customer downloads more than three times the average monthly data stored amount.
Even though Backblaze has an upfront pay-as-you-go pricing advantage, Wasabi says it can undercut it by selling reserved capacity storage with 1, 3 and 5-year terms, giving customers substantial pricing discounts for capacity purchase commitments on this basis. Backblaze also offers reserve capacity pricing deals. Wasabi says it covers more geographic territories than Backblaze.
Howes says customers find egress charges objectionable. While allowing that Wasabi operates under an AWS/Azure and GCP price umbrella, he doesn’t think think that the big three will lower their egress prices – because they make too much money from it, and also because Wasabi and its competitors are not hurting the big three enough.
S3 cloud storage is fertile ground. Howes says Wasabi can stick tightly to its S3 knitting and continue to grow for the foreseeable future.
