Last week, Dropbox announced they are doubling the storage for each pricing tier of its Pro plan. In other words, users who previously paid $9.99 a month for 50 GB will now receive 100 GB, and users paying $19.99 a month for 100 GB will now have 200 GB of storage. The increase of data is one of a few new changes Dropbox has made recently to try and combat the powerful competition of Google Drive and the rest of the cloud storage options. While this change may seem positive, Dropbox’s attempt to compete don’t come close to Google’s offering, and draws unwanted attention to the actual value of storage space.
Since Google Drive’s release at the end of April of this year, Dropbox has felt the pressure to improve its service. Drive not only offers cheaper storage options, but it’s a product of Google; one of the largest companies in the world. As it stands now, even after Dropbox’s doubled storage space, Google is almost half as expensive. Purchasing 100 GB from drive will only cost you $4.99 a month, purchasing 200 GB will cost you $9.99/month, and they offer 5 GB for non-paying members as opposed to Dropbox’s 2.5 GB.
In terms of data storage costs, Dropbox is already working from a hard disadvantage; the company uses Amazon’s S3 storage service while Google uses their own servers. The pricing for S3 storage goes from $128/month for a TB of storage (1024 GB) or $281,600 for 5000 TB. Assuming that Amazon cuts them a deal, these prices are cheaper for Dropbox, but probably not as cheap as hosting the storage yourself.
For most Dropbox users, waking up to find your storage doubled must be a nice feeling, but from another perspective, doubling your product while maintaining the original price begs the question: How much were they making from the previous pricing plan? And probably not long after that: How much are making from this pricing plan? And probably immediately followed by: How much is data really worth? If you go by the Amazon S3 pricing, you might start to get an understanding of how cheap storage is for Dropbox, but if you operate under the same assumption as before: that Google’s costs are even lower, than what’s to say Google won’t double their storage options as well?
The point is that Google doesn’t have to respond to Amazon’s latest offer because it still doesn’t come close to what Drive gives its customers. If Dropbox wants to continue to compete with the larger companies it needs to continue to build and improve its user experience and find a niche, not draw attention to the fact that data is not even close to worth as much as they charge for it, and that their competitors are offering a much better data deal.