In early November last year, Microsoft made a surprising announcement to OneDrive users in two parts. First, the unlimited storage that came with Office 365 subscriptions was being cut back to 1TB. Second, the free storage tier was cut from 15GB to 5GB, and the 15GB bonus that comes from syncing your camera roll with OneDrive was also removed.
This caused a massive backlash from customers. Over 72,000 of them voted on the OneDrive UserVoice page, asking Microsoft to bring back their free storage amounts. Microsoft then gave back some, but not all, of the OneDrive storage that it was planning to take away from users of its cloud storage service.
The company did not backtrack on these changes. The unlimited storage was still cut to 1TB this year (subscribers were given a 12 month grace period for those who had more than 1TB of data stored in their accounts), and free storage is still being cut to 5GB.
Microsoft's Group Program Manager for OneDrive, Douglas Pearce apologized for how Microsoft presented these OneDrive changes in the first place, stating:
"We are all genuinely sorry for the frustration this decision has caused and for the way it was communicated."
Argument behind the change
The Office 365 deal in Windows 10 was a place to store all your documents," not "a place to store all your files, with the added bonus of access to Office 365."Microsoft still isn't offering anything more than 1TB; it shifts the focus too much onto storage. The economics also become less satisfactory; offer 1TB to Office 365 users, and most of them will use only a fraction of the space, making the average cost per customer quite low. Sell an upgrade from 1TB to 2TB, and you can be sure that many or most of the customers will be using at least 1TB, driving the average cost far higher. While this is a business that Microsoft could get into, it's not one that it necessarily wants to.
While the change is likely to be welcomed by many of OneDrive's users, it does still leave Microsoft's service at a disadvantage relative to its competitors for new users (or anyone who fails to apply for the 15GB size when e-mailed). This in turn reduces the service's network effects. With OneDrive as the preferred cloud storage system and an ample capacity for files, it becomes much more valuable for third-party services to offer OneDrive integration, and makes the OneDrive ecosystem as a whole more attractive. If the free tier is too small to be useful, putative users may find themselves looking elsewhere.
No comments:
Post a Comment