Amazon Undercuts Rivals on Storage Prices

Amy Larsen DeCarlo
Amy Larsen DeCarlo

Summary Bullets:

  • Once again, Amazon is playing the role of market disruptor with its new cut-rate pricing plan for unlimited storage.
  • Cloud Drive’s deep price cuts are certain to have a big impact; competitors including Google, Box, and Dropbox will have to respond.

Amazon making a price cut is hardly news, given its cloud services arm’s penchant for dropping its fees. However, when the retailer reduces the annual fee for unlimited storage to $59.99, the market takes notice. Cloud Drive has no restrictions on the number of users and no ceiling on the size of an individual file. This low-cost, unlimited storage plan will have broad appeal to both businesses and consumers.

Who won’t see the appeal? Amazon’s competitors. Dropbox, Box, and Google will most certainly have to respond, if they haven’t already. Amazon Cloud Drive’s new price and unlimited storage structure fundamentally changes cloud storage pricing both for consumer and business services.

More significant than the price is the lack of limitations. Google Drive is $9.99 per month for up to 1 TB of storage. Box’s Business unlimited business storage solution is $15 per user, per month, and there is a 5GB cap on individual file sizes. Dropbox charges $12.50 per month for up to five users for unlimited storage. How and when will rivals respond, and will this maneuver have any impact on Dropbox’s planned IPO? Longer term, can any provider make money at these rates? And how long until providers need to ratchet up cloud storage prices, and by how much? For now, it is a buyer’s market.

What do you think?

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