Microsoft fires new shot in storage wars, gives Office 365 users unlimited OneDrive

Credit: Microsoft

'Marketing ploy,' first and foremost, says analyst, but there's more to the strategy than keeping up with the Joneses

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Microsoft today abolished space restrictions on its cloud-based OneDrive storage service for subscribers to Office 365, saying per-user allotments are now unlimited.

"Moving forward, all Office 365 customers will get unlimited OneDrive storage at no additional cost," said Chris Jones, the Microsoft executive who heads the OneDrive and SharePoint teams, in a post on the firm's blog.

Unlimited OneDrive will be available to any subscriber to Microsoft's "rent-not-buy" Office 365, including consumers (who can subscribe for as little as $6.99 per month), students and employees of businesses that have deployed Office 365.

Microsoft's announcement came just three months after it boosted consumers' and students' Office 365 OneDrives to one terabyte (1TB) each. At the same time it upped the allowance of those who didn't use Office 365 from 7GB to 15GB, and cut prices for additional storage by as much as 52%.

The Redmond, Wash. company had increased Office 365 business users' storage to 1TB in April.

"First, just like everyone else, this is a marketing ploy," said Wes Miller, analyst with Directions on Microsoft, of the unlimited storage space offer. "Unlimited is all about marketing."

Some cloud storage rivals have given their customers as much space as they can consume. Four months ago, for example, Google kicked up its Google Drive allowance to unlimited for workers at companies that paid $10 per user per month for Google Apps for Business.

Cloud storage-and-sync service Dropbox, meanwhile, sells the commercial Dropbox for Business, which runs $15 per user per month for unlimited storage. Dropbox for Business requires a minimum of five users.

Microsoft will roll out the expanded storage space for consumers first -- those who subscribe to Office 365 Home, Personal or University -- and next year begin to do the same for Office 365 enterprise customers.

Miller said that the unlimited storage space will appeal more to consumers than corporations. "For the consumer side, absolutely this is useful," said Miller. "Consumers don't have the compliance and privacy concerns that many businesses have."

The limitless storage is another way Microsoft tempts consumers to join the Office 365 subscription rolls, said Miller. But he also saw a long-term strategy at work, arguing that the company hopes to get all its customers to commit to the Microsoft service ecosystem.

"These moves are trying to make Office 365 more appealing, but they are also trying to make OneDrive your preferred dumping ground so that you don't go anywhere else," said Miller.

Consumers who want their OneDrive storage space upgraded as soon as possible -- rather than waiting for Microsoft to do it on its schedule -- can register with their Microsoft Account at this page.

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