Backblaze (NASDAQ:BLZE) Chief Financial Officer Marc Suidan outlined the company’s recent operating progress and key go-to-market priorities during a presentation at the Citizens Technology Conference, emphasizing an effort to accelerate growth in its B2 Cloud Storage business while improving cash flow generation.
Shifting from “grow at all costs” to growth with cash flow
Suidan said Backblaze’s posture following its 2021 IPO resembled many companies from that period—focused on investing heavily to grow, even if it meant “burn[ing] capital.” When he joined, he said the company was still “in free cash flow burning mode.”
He also cited improvement in the company’s “Rule of 40” score, which he said rose from 9% to 35% over a year. However, Suidan cautioned that Backblaze is “not” yet where it wants to be, adding that the company believes B2 “should be growing faster” while maintaining “healthy economics.”
Computer Backup updates aimed at managed service providers
While B2 remains the primary focus, Suidan discussed recent product updates for Backblaze’s Computer Backup business, including an Advanced Installer and a command-line interface. He said the Computer Backup product has historically skewed toward consumers, but Backblaze has been working to appeal more to businesses—particularly by enabling managed service providers (MSPs).
He described the current mix for Computer Backup as roughly 75% consumer and 25% business, with the business segment averaging “6–7 licenses” per customer. Suidan said that profile is typically served by MSPs, and the recent releases are intended to make it “more attractive for MSPs to manage.”
Backblaze’s objective for the Computer Backup business is stability rather than rapid expansion. Suidan said the product experiences about 10% annual churn, while adding roughly 7% customers annually for a net decline of about 3%. He said the company aims to bring that net change to 0% because the business is a “very healthy cash cow,” supporting investment in B2 growth.
B2 Neo: positioning for “Neocloud” partnerships
Suidan highlighted “B2 Neo,” which he said enables Backblaze to white-label its B2 service for “Neocloud providers.” He described the Neocloud category as a “fairly new” but “booming” market. Referencing an external report, Suidan said there are about 200 Neoclouds and that the market is expected to grow 46% annually to roughly $230 billion in five years. He added that storage typically represents around 6% of Neocloud economics, translating—based on his framing—to a $14 billion opportunity for the type of storage Backblaze provides.
According to Suidan, many Neoclouds already have storage in place, often built on open-source systems that may be “less reliable” with “limited functionality and features.” He argued that these providers are unlikely to match Backblaze’s pace of innovation and referenced the company’s “eleven nines” durability track record and performance levels as differentiators. He said Backblaze has “numerous” Neoclouds signed up beyond the largest one it recently announced and is in pipeline discussions with “at least half a dozen.”
Asked about what makes prospective Neocloud customers move to Backblaze, Suidan pointed to a mix of technical limitations (including multi-tenancy constraints) and economic factors. He described a use case where data needed for compute workloads sits on flash during processing, but can be stored more economically elsewhere when not in use. He said the economics between the two tiers can be “almost 10x” different and suggested some providers are motivated to shift data off flash to free capacity and improve monetization.
Largest TCV deal: ramp driven by operational requirements, not core performance
Suidan said the company’s largest total contract value (TCV) deal to date will contribute roughly 300 basis points of growth in fiscal year 2027, with revenue ramping over time due to development and implementation needs. He described the engagement as involving deep diligence and close collaboration between the customer and Backblaze engineering.
He said the customer’s requirements were focused less on core durability and performance—areas he implied were already proven—and more on capabilities that support OEM-style resale to end customers. Suidan cited areas such as:
- Billing capabilities
- Limit rating by customer sets
- Manageability
Importantly, he said this work is not “bespoke” for one customer and should be applicable to other Neocloud partners, potentially improving future implementations.
Go-to-market focus: pipeline growth as the key leading indicator
On go-to-market execution, Suidan described building a more traditional B2B sales and marketing “muscle” as a major shift for Backblaze, which he said historically relied on consumer-oriented demand and product-led growth rather than outbound selling.
He said the company grew pipeline from $15 million in 2024 to $30 million in 2025, with a goal to double again to $60 million in 2026. Suidan said the $60 million target is intended to be achievable, noting that, with an “industry standard” conversion rate the company is “comfortable” with and “even beating,” such pipeline could support a goal of reaching “30% and above” growth relative to current levels. He also described a typical cadence in which pipeline generation translates into bookings the next quarter and revenue roughly two quarters later.
Regarding larger deals (defined in the discussion as $500,000-plus in ARR), Suidan said their longer, less predictable timing is the reason they have been excluded from forward guidance. He emphasized that the variability can be structural—driven by contracting, security reviews, and proof-of-concept testing—and said Backblaze is prioritizing predictability rather than making guidance dependent on a small number of large closes.
When asked what would define success for the company’s next phase of go-to-market initiatives, Suidan reiterated that pipeline is the “best leading indicator,” including both new customer pipeline and expansion pipeline, which he said tends to convert at an even higher rate.
About Backblaze (NASDAQ:BLZE)
Backblaze, Inc, a storage cloud platform, provides businesses and consumers cloud services to store, use, and protect data in the United States and internationally. The company offers cloud services through a web-scale software infrastructure built on commodity hardware. It also provides Backblaze B2 Cloud Storage, which enables customers to store data, developers to build applications, and partners to expand their use cases. This service is offered as a consumption-based Infrastructure-as-a-Service (IaaS) and serves use cases, such as public, hybrid, and multi-cloud data storage; application development and DevOps; content delivery and edge computing; security and ransomware protection; media management; backup, archive, and tape replacement; repository for analytics, artificial intelligence and machine learning; and Internet of Things.
