I have to admit Allmydata has had a rough time. The original team had difficulty executing on the vision and most had to be replaced. Using a peer-to-peer client to have lower bandwidth and storage costs and hence lower pricing have not been a comparative advantage in an over-funded world where many money losing free competitors have emerged. Moreover, despite the security and encryption users hated the idea that their files were stored on other people’s computers. The product we had originally devised was much more difficult to use than we had anticipated. Frankly the software was slow, bloated and buggy!

Over the past year we rebooted the company. We changed the team, rewrote the specs, redesigned the product and changed the business model:

• We redefined the problem Allmydata is trying to solve: Allmydata is the solution for online storage, backup and sharing.
• The way we decided to solve this problem is by building a virtual drive on your computer that acts exactly like a regular drive if you use the Allmydata client:

1. Allmydata shows up as a drive
2. You can store as many files as you want of any type
3. You can run files directly from the virtual drive or copy them to your local drive
4. We decided not to build our own backup application, but instead to integrate to the backup applications built into Vista, XP and Mac OS or allow users to use any backup client they want
5. We created a web interface that looks exactly like the client to give remote access to files without needing to download the software client

• We simplified the business model dramatically removing tiered pricing and offering an all you can eat plan for $4.99 per month for unlimited storage with a 1 Gb free plan.
• We removed peer to peer from the downloadable client as it was too resource hungry and slowed uploads down dramatically. We did keep it on our back-end to split the files on our own servers to allow us to use cheap Linux boxes and hence have much lower costs than all our competitors, Amazon’s S3 included.
• We rewrote the software client such that memory usage went from as much as 200Mb to less than 30Mb.
• Simultaneously with the Allmydata 3.0 release we are releasing a beta version of the Mac client both for Tiger and Leopard.

All the changes above happened incrementally over the past year or so. None of them on its own was a game changer, but we would like to believe that the sum total of the improvements create a “Skype-like” (meaning easy to use and understand solution) for users’ storage, backup and sharing needs.

We’ll see what the future holds but for the first time in a long time, I am becoming optimistic about Allmydata!