Alan Pelz-Sharpe, principal analyst at Deep Analysis, who has been watching this space for years says that consumer cloud storage pricing has always been a race to the bottom. “You can only make a margin with mass scale. That’s why firms who are not Microsoft, Amazon or Google are pushing hard for business and enterprise customers. Google One just brings that message home,” he said.
If you get enough scale, as Dropbox has with an estimated 500 million users, if you can get a percentage to pay $8.25 a month for a terabyte of storage, it can add up to real money. When Dropbox filed its S-1 to before it went public earlier this year, it reported more than $1 billion in consumer revenue. It would be difficult if not impossible for a startup launching today to compete with the existing players, but the ones out there continue to compete with one another, driving the cost down even further.