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Google Drive Takes It to the Competition


Google drastically dropped the price for storage on Google Drive this week, to the point where it now undercuts virtually all of its competitors. At $9.99 per month for a terabyte of online storage, Google puts all of its competitors to shame, but there is more going on here than just a price war.

Dropbox wants $9.99/month for 100GB, SugarSync has a $55/month plan for one terabyte of data that is shared by up to three users and Microsoft’s OneDrive, which only features annual plans, starts at 50GB for $25 per year, which is even more expensive than Google’s new $1.99/month for its 100GB plan. Apple wants $100 per year for its 50GB plan.

Maybe even more importantly, Google’s new prices significantly undercut those of its own cloud storage platform for developers, as well as those of Amazon’s S3 and Microsoft’s Azure where most cloud storage startups host their files (Dropbox uses S3, for example). Those startups are big enough to earn discounts for storing large amounts of data, but even then, Google’s price for consumers is lower than what developers can get on those platforms.

Why is Google willing to do this? Obviously, it wants more (paying) users on its platform and an attractive price sure helps, but it’s also  fighting off competitors in a market it does not yet dominate.

But Google Drive isn’t only about storage; it’s also where Google productivity apps live, and it’s closely linked to its photo sharing-storage tools and Gmail, all of which share the same pool of available online storage.

With these recent price cuts, Google locks the competition into a price war where it’s hard to beat because it even undercuts the usual wholesale prices for online storage. At the same time, it’s ramping up investments around its products that use its storage service to shut down competition in that area, too.

The next few months sure look like they’ll be interesting…

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