Calculating the cost of online backup service

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While there are free online backup services available most quality services do charge a monthly or yearly fee. This is not strange considering the companies are usually employing multiple employees and on top of that paying thousands of dollars each month towards their data centers.

But because many of us still live in the world where everything on the internet is free we would like to calculate how expensive an online backup service actually is compared to an old fashioned external hard disk backup or other solutions.

Even though there are excellent services online that offer online backup for just $5,- per month we are going to consider $10 to be a fair monthly price. In this situation the total cost would come to $120,- per year. This includes the software that makes daily backup, the online storage of usually around 100 GB and 24/7 maintenance by the backup company.

Let’s compare this to the regular way of making physical backups once a week. An external hard disk will probably set you back around $100 but will last at least for three years. This will come down to $33 per year. The biggest costs comes in your personal time. Let’s assume you usually charge companies at least $75 per hour and you spent 15 minutes per week on making a backup towards your external hard disk. This is exactly one hour per month or 12  hour work on a yearly basis.

This brings the total to $900,- in labor hours you could have been working for clients and thus lost income. Together with around $33 per year for a new hard drive the total yearly costs of physical backups is $933. This is more than 7 times as expensive as using an online backup service.

It turns out to be an easy decision after all to spent $10 now and save over $800,- per year in lost income.