As the price of online storage plummets, can independents like Dropbox and Box survive?
If history repeats itself, then all those smaller companies are about to get squeezed by some very powerful market forces.
Over the past year, the per-gigabyte price tag for online storage has been driven down by a handful of slashing moves from the biggest platform players around:
- Last March, Google upended the cloud storage market by increasing the default storage allotted for free Google Drive accounts to 15 GB and cutting the upgrade price by 80 percent, to $10 per month for a terabyte of space.
- Apple followed suit at this year’s WWDC, announcing a new iCloud Drive that will cut the price of 200 GB of storage to $4 a month (the same price per gigabyte as Google) when it goes live this fall.
- And now Microsoft has joined the party, matching Google’s 15 GB of free space for OneDrive and its $2 per 100 GB per month upgrade price. But the real deal comes with Office 365 Personal, which will soon include a terabyte of OneDrive cloud storage (along with the full Office suite) for $7 a month or $70 a year. The $100-a-year Office Home lets up to five people in a household get that terabyte along with Office apps on each of their devices.
Those prices make independent cloud storage services like Dropbox and Box look like terrible deals.
Dropbox is still asking $20 a month or $199.00 per year for its 200 GB package, which is five times what the competition is now charging. And if you want a terabyte of data you have to move to the Dropbox for Business platform, which costs $15 per user per month, with a five-user minimum.
Box is also overdue for a price cut, with its price list still showing the $15-per-month (five-user minimum) Business plan as the “recommended” option. Personal account holders have to pay $10 a month if they want more than the basic 10 GB of free storage, and then they’re capped at 100 GB, a rate that’s five times higher than what Google/Apple/Microsoft charge.
If you were around at the pre-dawn of the Internet, this story should be eerily familiar.