@Jeremy Wright - if the increased cost to you of additional sites is mostly or entirely the Amazon S3 cost, consider creating a tier in which you charge for actual usage or, even smarter, allow bulk users to hook up their own AWS accounts and let them pay that directly to Amazon.

The goal would not necessarily be to profit from the big fish but, rather, to win them as long-term users who:

1. Will influence others to become your customers.

2. Will evangelize your future offerings.

3. Will not fund your direct competitors.

4. Will probably be experienced WordPress users who will not soak up your time with newbie support questions but, rather, will provide invaluable feedback and ideas.

Keep pricing very simple at the entry level, certainly, but it is okay to have a more tailored approach at the level where people have dozens or even hundreds of sites. Create a special, break-even pond for the big fish to swim into and they will bring, in their wake, lots of smaller fish to fill up your simple, entry-level ponds.

Always be aware of what your competitors offer in terms of value (as opposed to simply price). For instance, BackupBuddy is a mature plugin with lots of users (enhancing its credibility, a value in itself) and the ability to not only backup WordPress (both SingleSite and MultiSite) but also cloning, an increasingly important feature. ServerPress makes it easy to migrate sites from your server to your desktop for local development before deploying back to your server again. ManageWP makes it easy to backup and update all your sites at once. Page.ly offers backed up WordPress hosting with fully-automated upgrades etc.

Lots of different teams are tackling essentially the same problems from different angles, what you have to figure out is how to addresses the problems of managing WordPress in a way that adds sufficient unique value that people choose your solution over others.

Personally, in terms of branding, I would not place sole emphasis on backup because, although it is of central importance, your feature set will inevitably gravitate towards doing much more and, anyway, you really need to have the .COM of your name if you want to be taken seriously.