Agreed. My wife had to upgrade her dropbox plan recently to the $41.60/mo 500GB plan. I had to really weigh the pros and cons of switching. In the end, I decided the costs of me having to provide "technical support" to my wife was worth the roughly $30/mo in the short term over Google Drive (and now OneDrive), but figured we would start trying to convert her over the next year or so.
Dropbox is in a really tough spot, because if they even cut their prices in half (which would still be significantly more expensive than OneDrive), their revenue would drop tremendously right before an IPO. My guess is that the primary options are to stay the course, go public ASAP, hope you don't get bled too much from Google/Microsoft and try to find more reasons for people to pay a premium for Dropbox, or to sell to Apple, which is the only big player without a meaningful competitor.
>or to sell to Apple, which is the only big player without a meaningful competitor.
iCloud Drive?[1]. The Apple buying Dropbox ship has sailed. Steve Jobs tried to buy them and Dropbox said no. Turns out it was a good choice on their part, but there is pretty much no chance of it happening now.
>You've got to love competition, but I wonder at what point Onedrive's race to the bottom in terms of pricing starts to impact Dropbox's valuation?
eh, I've looked into getting into this market, and the price I would feel comfortable with (at my scale... which is not large) would be around a penny per gigabyte per replication per month. 2 replications is about the minimum I'm comfortable with, so the $0.02 per gigabyte/month seems pretty reasonable to me, especially because the big players have access to some pretty dramatic economies of scale that I do not.
Hard drives are what, $150 per 4tb drive or so, to purchase? Figure that it's another $2000 for every 36 drives for a low-end motherboard and chassis; figure a 36 month life, to be conservative, and that's $5.50/month in capital. figure $200/month per kw usable. a hard drive is going to use 5-10 watts That's $1-$2/month per 4tb. so total cost is going to be around $1.88 per tb per month. Now, multiply by 2.2, as I'm going to have 2x replications and make each replication raid6, (10 disk stripes) so my cost is $4.14/month/tb If I'm charging $0.02 per month per gigabyte, that's $20/month per tb revenue. (Of course, this is all seagate gigabytes. It's more complex if you use GiB.)
That's plenty of margin. Now, this doesn't count over-subscription, and if you sell in 100gb blocks, not all of it is gonna get used.
Now, especially if you are letting users use this for more than just backups, you have per-account overheads like abuse handling.
But yeah, overall? from where I stand? the "race to the bottom" isn't even keeping up with hard drive prices. In a real "race to the bottom" someone at my scale wouldn't be able to make reasonable margins.
The biggest problem I see with the market is that most consumers don't need that much storage. I'm going to need a lot of customers to just fill my first 74 disk cluster. Then, if I let customers share the files, I'm going to have to deal with dmca bullshit, and I ain't doin' that for free.
> You've got to love competition, but I wonder at what point Onedrive's race to the bottom in terms of pricing starts to impact Dropbox's valuation?
Unless you're a Dropbox equity holder why would you care? As a consumer all I care about is cost and reliability, neither of which are impacted by their valuation.
Yes - Google Drive was probably an impetus for this, and it will be interesting to see what they introduce at IO. I think this price drop is a bigger deal than the Google Drive Drop, as I'm pretty confident that Microsoft is in this for the long haul, and that OneDrive is going to be around in 10 years, and show great enterprise integration.
You've got to love competition, but I wonder at what point Onedrive's race to the bottom in terms of pricing starts to impact Dropbox's valuation?
Other interesting pricing tidbits:
OneDrive will come with 15 GB for free (up from 7 GB). Office 365 Personal ($7/month) will come with 1 TB of OneDrive storage.
For the first time I'm rethinking my $8.25/month subscription to Dropbox for 100 GB, particularly as I only have about 10 GB of data...