Cloud Storage Pricing: Consumers and Businesses Driven By Costs and Features

Some concepts in technology are inevitable and continuous – like the ever-decreasing costs of storing data – from hardware costs to the software and networking technologies that enable data storage – costs will continue to decrease. Cloud-Pricing-Explained

This week Google dramatically dropped the cost of storage for its consumer cloud storage service – Google Drive.  One terabyte of Google Drive storage is now priced at $9.99 per month vs. the previous price of $49.99 per month– a drop of 80%.

This pricing drop highlights how consumers are driving the evolution of technology by not only bringing their own devices to work (BYOD), but now many of them are bringing their own software and services (BYOS) to work as well.  While Google Drive is included with Google Apps – a business grade SaaS solution used by some businesses, a Google Drive account is also included with a consumer’s Google+ account or Android device.

Google is in a war to capture data and consumer files. And when IT is not in full control, employees are storing data on consumer accounts. At the same time, many employees are putting pressure on their IT teams as they raise their expectations of IT to improve application usability, flexibility, data storage policies and access to their favorite applications.

Google’s battle for consumer loyalty and data will continue to push the industry and ecosystem.  Dropbox, Box, Microsoft and Apple will be forced to respond with a price drop for their existing users, while new consumer cloud storage users will select the service that meets their loyalty or feature and cost needs.  For these providers it’s a big long term play – the concept of “Data Gravity” coined and theorized by Dave McCrory states that the services and applications tied to data and its locality will drive these consumer businesses for years to come.  Google is seeking to use “gravitational pull” to bring more data and applications into their services.

It’s important to note that Google did not drop the cost for cloud storage in its enterprise cloud offering.  Google Compute Engine’s storage fees are still $0.04 per GB, per month and it has an outbound transfer cost of $0.12/GB.

I think margins in the Cloud Computing IaaS space are simply too high. As I wrote last August when we dropped our pricing dramatically, AWS margins are over 90%and I am sure Google’s margins are as high or higher. ProfitBricks continues to lead in the real price war for business grade cloud computing compute and redundant cloud storage.  We simply charge $0.04 per GB per month for business class cloud storage and our outbound data transfer cost is $0.08/GB (33% less than Google).

With data storage being one of the top challenges of businesses today – what is your company’s plan to manage data, ensure data security and data redundancy while controlling costs?