Microsoft turns cloud storage into Office 365 feature

But will the free 1TB boost subscriptions?

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"In totality, the Microsoft deal is really, really good. Even exceptional," said Patrick Moorhead, principal analyst with Moor Insights & Strategy. "There's a storage battle going on, and people keep anteing up on the space, pushing more chips onto the table. That will pull in customers [to Office 365], and if the competitive disparity keeps going, could be a really big deal for both consumers and small businesses."

Microsoft's prime competitor in the office productivity space has been Google, with its $50 per user per year Google Apps for Business and the free personal use-only Google Docs, but Moorhead viewed Microsoft's 1TB give-away as less a strike against Google as one directed at Dropbox and Box, a pair of relative newcomers that based their models on cloud storage and synchronization, but have been adding document creation and document editing features and tools to make their offerings more than just storage.

"Box and Dropbox have been trying to make storage a product, make it 'sticky,'" said Moorhead. "But cloud storage is a feature, not a product."

Moorhead saw the logic of those who claimed the Office applications were now "free" to consumers, discounted to business, when the terabyte of storage was factored into the equation. "That's being proactive against Dropbox and Box," he said. "Those companies are trying to build apps to connect to their storage."

Microsoft already has those applications, he noted.

"Office 365 Home gives you the whole Office for five people, with 1TB of storage each. That will make it a really tough, tough choice to think about using anything else."

The ballooning of storage space -- a general trend as costs commoditize and for large providers, approach zero -- also will benefit Microsoft in ways beyond boosting Office 365's value and perhaps its subscriber base, the experts contended.

"What's more telling about this, I think, is seeing in it a shift to where the user is the hub," said Directions' Miller, referring to the per-user assignment of storage. That's a change from Microsoft's historic stance, where the device, in particular the personal computer, was the center of its universe, and the organization, as it managed those devices, controlled them.

Rubin looked at it differently. "This not only helps cement the value of Office 365, but helps bring them onto mobile platforms," said Rubin. Because the terabyte of storage can be shared across multiple devices owned by an individual, it could promote Microsoft software use on tablets and smartphones, he asserted, including Office for iPad, the scaled-down, touch-enabled suit the company launched in late March.

And Apple's announced changes to iOS will help, too. Under iOS 8, which will ship this fall, app developers will be able to revamp their wares so users can save files to non-Apple cloud storage services. "To some extent the major OS providers line up behind their storage services, offering a certain amount of integration," said Rubin. "Microsoft now has a great opportunity, what with the more level playing field on iOS. It was good timing on their part."

"A terabyte is a milestone," said Moorhead. "When we're not talking about gigabytes anymore, that's a really good deal."

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

Copyright © 2014 IDG Communications, Inc.

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