The importance of still doing a local backup despite using a cloud one is that you can bulk recover rapidly from your local backup if your hard drive failed etc. Then use the cloud just to retrieve the latest data since your last manual local backup. I've never attempted it, but I'd hate to try and recover 500gb from the cloud! Personally I can't see how it would work. As a reseller now it costs £480 a year including 5tb across all customer accounts. Charging £1.99 a year would only allow an average of 20GB per customer across 240 customers JUST to break even. I cant see how they would do it. They're either newbie idiots and they'll panic when they realise that an extra 5TB costs them £50 per month automatically billed - instantly give up and leave you in the shit, or they have more money than sense. My guess is the first of those two. One other slight possibility is that they are selling a retail disc at £1.99 that they acquire almost free from Livedrive and that Livedrive hope to earn that customer at full pricing of £5 per month the year after. Who knows!