Mimi Kong: Now, how do you see AI aligning to your strategy and financial results?
Gleb Budman: So we talked about the AI opportunity for us a little bit earlier in the call. So, but I’ll just touching on that for a second, which is it’s obviously a massive use case for data. Backblaze V2 is an ideal platform for those storage use cases. We help customers at various places in their workflows. And our partnership with Coreweave supports customers who wish to use Backblaze for storage, Coreweave for specialized GPUs. And we certainly believe that we have a significant opportunity to continue to help in that space.
Mimi Kong: What do you anticipate will be the hardest hurdles in the coming years? And what are the challenges that should be anticipated?
Gleb Budman: So as we scale and we continue to become a much larger business, ensuring that we continue to maintain our great culture is certainly something I’m paying a lot of attention to. Our people care deeply about our customers, each other, our mission. And I want to make sure that we don’t lose that as we become a larger and larger company.
Mimi Kong: Frank, this question’s for you. In what many other ways are you planning to bring in cash and expand the company so we could see a healthy share price growth?
Frank Patchel: Now for our current growth plans, we don’t expect to need to raise cash. And that’s because of our overall growth, the price increase and the operating efficiencies that continue to phase in. But we are actively investing in growing the company because remember, we have a huge market of $100 million in front of us.
Mimi Kong: Gleb, how do you plan to compete with the massive cloud companies such as Microsoft, Amazon, and Alphabet?
Gleb Budman: So we’ve competed with them since the day we launched B2 Cloud Storage seven years ago and we continuously win customers away from them. We are easier to use. There was an analysis that found that our customers saved 92% of their time by using us. We’re dramatically less expensive. We now have free egress, which is something that they are trying to do the opposite of. They’re trying to lock customers in. And now we are also faster than Amazon. So we feel very good about our ability to compete successfully.
Mimi Kong: Now, considering the current conflicts the U.S. is economically or otherwise involved in, how do you see the company being affected both short term and long-term?
Gleb Budman: So we have about half a million customers spread across 175 countries. We don’t have any particular concentration in conflict areas, so I don’t think the company is directly affected. Looking at the U.S. economy specifically, which is obviously experiencing some economic pressure on interest rates and inflation, etcetera, that challenge in many ways is an opportunity for us as we believe that we’re well positioned to help customers when they’re affected by those pressures. Since we’re such a good value for them as customers look to optimize their costs and their workflows, we’re a great way to do that.
Mimi Kong: Gleb, nowadays, we rely more on remote storage for our data. With that being said, we have also progressed to terabyte-sized micro-memory cards. Is Backblaze interested in on-site server or alternative node storage options for its clients?
Gleb Budman: We always listen to customer needs. For the most part, we see customers shifting from traditional cloud providers and from on-premises to Backblaze. We don’t see a lot of interest in redeploying on-premises equipment, but always listening to clients and paying attention to what they’re trying to do. If something shifts on that front, we’ll certainly look to consider it for our roadmap.
Mimi Kong: Are there any plans to change pricing model or tiered pricing?
Gleb Budman: No current plans. We just successfully rolled out the price increase that we’ve talked about on this call. We have a very simple pricing model. That’s one of the reasons our customers like us. We don’t have that same complicated pricing structure that Amazon has, which can result in expenses running away from customers. So no plans to change that.
Mimi Kong: Now Frank, this one’s for you. What is the growth of the company?
Frank Patchel: Well as we reported, we have 15% of growth, but our B2 flagship product grew 31%. We also made a substantial increase in our guidance for Q4, and we discussed that we really are at an inflection point. So due to that continued growth that we’re getting in new logos and the price increase, we see that growth continuing and carrying into 2024.
Mimi Kong: Now, Gleb, if Backblaze prices are competitive, then what do you see as the biggest hang-ups conversion and adoption to your services?
Gleb Budman: Historically, we haven’t spent a lot on branding and awareness, but we’re taking steps in that direction, as I mentioned earlier about our brand building efforts. When customers do evaluate Backblaze, we have a high rate of success. And I think one of the important things is that we’re starting to see the shift toward the open cloud. For a long time, years and years ago, there was the adage of no one got fired for buying IBM? Then it became, you did get fired for buying IBM, because over time, customer needs change and technologies change, and these shifts sometimes take time, but when they do, they become significant. And we see the pendulum shifting back to customers wanting to break free from that lock-in of the traditional clouds. And so that’s a trend that I think we’re seeing and see a lot of opportunity in.
Mimi Kong: And this is our last question. We’re getting close to time. Now, Frank, what is being done to limit cost of operations to better the PE ratio as it sits in the negatives?
