Under Competitive Pressure, Dropbox Doubles Capacity, Not Prices

Uder pressure from Google Drive and other industry heavyweights, Dropbox announced it is doubling the capacity of its Pro 50 and Pro 100 online storage options and will also offer a new 500GB service plan.

By Lucas Mearian
Tue, July 10, 2012

Computerworld — Dropbox, the most popular consumer online storage service, announced Tuesday it is doubling the capacity of its plans but keeping its prices the same. The company is also now offering a new 500GB service plan.

Dropbox's service plans begin with 2GB of free storage, and its first paid upgrade -- Dropbox Pro -- had been 50GB for $9.99 month or $99 per year. The 100GB plan had been $19.99 a month or $199 a year.

Dropbox Pro now comes in 100GB and 200GB service plans, but at the price of the original 50GB and 100GB plans, the company stated in a blogpost. The new pricing will go live Tuesday evening.

The company also announced existing Pro users can get a free, three-month Pro 100 trial that friends or family can use.

"Since time immemorial (2008), folks have been asking us for a bigger Dropbox. We've heard from architects with giant drafting files and photographers with huge portfolios, but mostly we hear from families who have more than 100GB of photos, docs and videos," Dropbox stated in a blogpost. "And now that Dropbox can automatically upload your photos from just about any camera or phone, everyone's adding tons of pictures and videos to Dropbox every day."

Dropbox has been under increasing pressure from other traditional consumer online storage services, such as SugarSync, Carbonite and Mozy. The greatest pressure, however, has come from non-traditional industry behemoths, such as Microsoft with Azure, Apple with iCloud and most recently, Google with its Drive offering. Google Drive, which launched in April, undercut competitors' prices, and shook the industry to its core.

Google Drive offers 5GB of free capacity and allows an upgrade to 25GB for $2.49 a month, 100GB for $4.99 a month or 1TB for $49.99 a month. When a user upgrades to a paid account, the storage capacity for the user's Gmail account also expands to 25GB. On an annual basis, Google Drive charges $60 for 100GB.

"Certainly, when Google came into the market with Drive with four times the storage for what Dropbox was offering, I'm not surprised to see a shift in pricing for them to remain competitive," said Gartner analyst Michael Gartenberg.

The cost to use Azure Extra Small Compute has dropped in half. In March, Microsoft cut the price of its cloud storage service as did Amazon on its Elastic Compute Cloud.

At a time when the personal cloud is beginning to eclipse the personal computer as the center of consumer's digital lives, online storage is becoming a key component, Gartenberg said.

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