Google Drive Undercuts Cloud Competition With Major Price Drop

Source: Thinkstock

Source: Thinkstock

Google (NASDAQ:GOOG) has drastically reduced the monthly fees for its Google Drive cloud storage service in an effort to draw more users away from competing cloud services. According to the Google Drive Blog, the price for a 100GB monthly storage plan has been dropped to $1.99 from $4.99, while the price for a 1TB monthly storage plan has been reduced to $9.99 from $49.99. A massive 10TB storage plan is also offered for $99.99 per month and even larger storage plans are available if needed.

Google is also still offering 15GB of free storage for any user and storage will continue to work across Drive, Gmail, and Google+ Photos. Users enrolled in a current storage plan with Google Drive will automatically receive the new discounted prices.

Google’s move gives the company a significant pricing advantage over all other major cloud storage service providers. Microsoft’s (NASDAQ:MSFT) OneDrive currently offers 100GB of storage for $50 per year, or approximately $4.16 per month. Dropbox and SugarSync both currently offer 100GB of cloud storage for $9.99 per month. Apple’s (NASDAQ:AAPL) iCloud storage prices are even more drastically undercut by Google Drive’s new prices. Apple charges U.S. users $100 per year, or approximately $8.33 per month, for only 50GB of storage.

Google Drive’s new monthly storage prices even undercut its own Google Cloud Platform storage prices for developers. The monthly usage fee for one terabyte of standard storage through Google Cloud Platform costs $0.085 per gigabyte, or $85 per month. Standard developer cloud storage fees at Amazon’s (NASDAQ:AMZN) S3 platform and Microsoft’s Windows Azure platform are also higher than Google Drive’s consumer prices.

So how is Google able to slash its cloud storage prices this low? Scott Johnston, Google Drive’s director of product management, was lean on the details. “Today, thanks to a number of recent infrastructure improvements, we’re able to make it more affordable for you to keep everything safe and easy to reach on any device, from anywhere,” wrote Johnston on the Google Drive Blog. Johnston didn’t reveal exactly what “infrastructure improvements” Google had implemented.

Although it is possible that Google has found a clever way to cut its storage costs, it is also possible that the Internet search giant is simply selling its storage below cost in order to lure users away from its competitors. In other words, Google may lose money in the short term with the goal of acquiring more users in the long term. When it comes to cloud storage, Google may have the right idea by taking the long view. The cloud storage market was worth $5.6 billion in 2012 and is expected to grow to $46.8 billion by 2018 according to a study by market research company MarketsandMarkets.

Follow Nathanael on Twitter (@ArnoldEtan_WSCS)

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