Will Your Data Disappear When Your Online Storage Site Shuts Down?

From Free to Free With Strings Attached

While some companies have decided to throw in the towel and close down unprofitable services, other businesses have taken a different tack. Kodak Gallery (originally called Ofoto) recently went from free to kind-of free in March.

Now, if you don't buy something from the site you'll get the boot. But you can keep your photos there by spending $5 with the site annually as long as you have less than 2GB worth of data stored on the service. If you have more than 2GB, you'll have to spend $20 annually. Kodak outlines the new terms of service on its site; note that it urges you to keep a copy of each image you upload to the site in a separate and secure place.

According to a letter from Victor Cho, Kodak Gallery's general manager, the service used to store billions of photos for 75 million members. "The quality storage service the Gallery provides is significant in terms of our business costs," Cho wrote in an open letter to customers.

"For Kodak it comes down to keeping the 5 million customers who are willing to pay for a service and recognizing that the other 70 million that pay nothing aren't worth as much," Park Associates' Scherf says. By keeping loyal customers over freeloaders, these companies increase the average revenue per user and reduce overhead costs.

That could be vital in a year like this one, in which Kodak reported to investors that it was on track to lose from $200 million to $400 million.

"Online storage is not like putting money in a bank," AW2.0's Williamson says. "You can't just assume data will be safe on the Internet until the day we die." He adds, "Users cannot absolve themselves from being 100 percent responsible for their own data."

Protect Your Data

Here are some suggestions to help you plan a smart backup strategy that includes online and offline options:

• Find the Right Online Backup Service
• How to Prevent a Data Disaster
• Fifteen Backup Programs to Safeguard Your Data
• Hard Drive Disaster: A Cautionary Tale
• PC World's Storage News and Reviews