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Microsoft ups the ante in cloud storage price war

All Office 365 subs will now get 1TB of OneDrive cloud storage. Microsoft (MSFT +0.5%) had begun offering 1TB to business Office 365 subs in April.

In addition, Microsoft is upping the storage allotment for free OneDrive accounts to 15GB from 7GB, and respectively slashing prices for its 100GB and 200GB standalone accounts by 73% and 65% to $1.99/month and $3.99/month.

The free allotment and 100GB pricing is now even with Google Drive's; Google charges $9.99/month for 1TB, and $99.99/month for 10TB. Following recent price cuts, Apple is set to offer 5GB of free iCloud storage, and respectively charge $0.99/month and $3.99/month for 20GB and 200GB.

The price war could take a toll on Dropbox, which recently raised funding at a $10B valuation: Dropbox charges $9.99/month ($99/year) for 100GB, and $19.99/month ($199/year) for 200GB.

BOX, which argues its enterprise feature set keeps its services from being commoditized, charges $5/month for its Starter plan, and offers unlimited storage for its Business ($15/month) and Enterprise ($35/month) plans.

Microsoft has made a priority of boosting Office 365 sales: The year has already seen the launch of Office iPad apps (full versions are free with Office 365 subscriptions) and a 365-focused Salesforce partnership. Commercial 365 sales doubled Y/Y in calendar Q1.

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Comments (2)
  • KevinRemde
    , contributor
    Comments (510) | Send Message
    What's interesting about this is not so much that Microsoft is wooing more customers with lower prices. It's more about how Microsoft obviously sees that there is enough future potential value in "Services" (as a "Devices and Services" company) to risk lower margins on that part of this huge-and-growing business.


    Like software, the provision (and sale of) services can bring much greater profit through higher margins than can, say, the creation and sale of hardware. The people who are exclaiming, "Oh no.. they're practically giving their software away now!" or "Why would Microsoft create hardware when hardware margins are so thin?" should also consider the vast potential that is cloud and cloud-provided services for both businesses as well as consumers.


    This is huge.


    Disclaimer: Long $MSFT and longtime employee; though I don't work in this particular part of Microsoft. But, yeah sure... I'm a fan.
    23 Jun 2014, 03:33 PM Reply Like
  • Peskar
    , contributor
    Comments (38) | Send Message
    When most consumers do not use their quota, it is cheap to increase it.
    23 Jun 2014, 05:27 PM Reply Like
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