UPDATED 15:03 EDT / AUGUST 27 2014

Dropbox needs more than price cuts to keep Pro users

price cut tag scissorsAnother price drop seen in the cloud storage wars as cloud storage provider Dropbox, Inc. today announced that new Dropbox Pro customers will now get one terabyte (TB) of space for $9.99/month, a marked difference from the previous 100 gigabytes (GB) that $9.99 used to buy. The company said existing Dropbox Pro users will see the new space automatically updated in their account over the next couple of days.

Along with the price drop, Dropbox also announced that they have added new features to Dropbox Pro including new sharing controls such as passwords for shared links, expirations for shared links and view-only permissions for shared folders. Remote wipe has also been added, which lets users delete their Dropbox files from a lost or stolen device while keeping them safely backed up in Dropbox. “If you’ve ever left your laptop on a plane, you’re not just worried about the laptop—you’re worried about the stuff that’s on it,” wrote ChenLi Wang, Head of Product at Dropbox, in the company’s blog post announcement.

Founded in 2007 by CEO Drew Houston and CTO Arash Ferdowsi, Dropbox is a service that lets consumers and business users bring all of their photos, documents and videos anywhere, and easily share them. The San Francisco-based online file storage service dropped its price in the face of intensifying competition from similar services including Amazon Web Services’ Amazon S3 (Simple Storage Service), Apple iCloud, Box, Google Drive and Microsoft OneDrive.

As cloud infrastructures get bigger, the cost of offering cloud storage gets smaller. In the past two decades, the average cost of hard drive storage has dropped by a factor of more than 22,000 according to a June 2013 report by the Statistic Brain Research Institute.

As a result, this year we have seen cloud storage service providers begin to drastically cut cloud storage prices as they simultaneously increase cloud storage allotments for customers. In March, for example, Google Drive‘s monthly storage plan prices dropped to $1.99 for 100GB (previously $4.99), $9.99 for 1TB (previously $49.99) and $99.99 for 10TB.

Dropbox may have lowered its pricing to remain competitive in the financial sense but the company maintains that its ability to sync data across any device remains its technological edge. “We pioneered the space and now our competitors have realized it’s important and have started to focus on it,” said Dennis Woodside, Chief Operating Officer at Dropbox, in an interview with USA Today. Woodside continued, claiming that the other technology giants are trying to lock users into their devices and apps whereas Dropbox can flawlessly sync files across phones, tablets and computers, allowing customers to use whatever device they want.

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Unlimited storage is the future, claims Box

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But some Dropbox competitors say it won’t matter that all of the online file storage providers are lowering the price of storage, at least not in the enterprise space. Box, for example, recently announced that removing storage limits for business customers will be their key differentiator going forward.

“Competition for enterprise customers will no longer be about how much information a solution enables them to store, but rather, what it helps them do with that information,” predicts Aaron Levie, CEO of Box, in a July 15 blog post. “And today, we’re happy to share that Box is removing storage limits for our Business (sic) customers. This may seem like the escalation of a storage war, but we’re actually approaching the end of one.”

Despite Levie’s predictions about unlimited storage, Dropbox still has staying power, according to Forrester Research. “Dropbox has 300 million users and these are not casual users. They are deeply embedded in the service,” said Ted Schadler, Principal Analyst of Application Development and Delivery at Forrester, in the USA Today interview. “People say you can just move your stuff out of Dropbox and drag and drop it somewhere else. I don’t think that’s true. I think Dropbox has momentum. Dropbox has first mover advantage and it has executed on that really well.”

photo credit: bhautikjoshi via photopin cc

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