Microsoft’s Online Storage Curveball: Office 365 Now Comes With a Terabyte of OneDrive

Comparing the new plans to Google Drive, Dropbox, iCloud, and others

Microsoft OneDriveStarting shortly, Microsoft is upgrading the storage plans it offers for OneDrive, the online storage service formerly known as SkyDrive. You’ll get 15GB of space for free, which the company says is enough for 75 percent of users to store all the files on their PC in the cloud. (Until now, freeloaders have received a base allotment of 7GB.) Paid OneDrive tiers will offer 100GB for $1.99 a month or 200GB for $3.99 a month, a 70 percent reduction from previous pricing.

All of this is nice, but hardly surprising: It’s unquestionably a response to the similar moves which Google made with Google Drive back in March.

But Microsoft has another piece of OneDrive news which is at least a trifle startling–and which nobody else can quite match. The company is radically increasing the amount of storage it bundles with the consumer-oriented versions of Office 365, the subscription-based version of the Office productivity suite.

Microsoft had already announced 1TB storage for business-oriented versions of Office 365. Starting this month, Office 365 Personal, which costs $6.99 a month or $69.99 a year and lets you install Office on one Windows PC or Mac, will also throw in 1TB of OneDrive space, up fifty fold from the previous 20GB. Office 365 Home, which goes for $9.99 a month or $99.99 a year and can be installed on up to five computers, will offer 1TB apiece to up to five people per subscription.

That means that getting 1TB of OneDrive along with the rest of Office 365’s offerings costs, at most, the same as you’d pay Google for 1TB of Google Drive space. And it can cost far less, especially if you subscribe to Office 365 Home and take advantage of all five user accounts, in which case the effective price is more than 80 percent less than what Google charges.

The savings are even greater compared to other services such as Box and Dropbox, which offer nowhere near as much space for the money as Google Drive. (Dropbox wants a hundred bucks a year for 100GB of storage–the same rate that Microsoft charges for ten times as much space plus the ability to install Office on up to five computers.)

You can think of these new Office 365 deals as involving paying for a Windows and/or Mac office suite and getting a lot of storage thrown in, or paying for storage and getting a lot of productivity software as a bonus. Either way, they’re impressive, especially since OneDrive is already a very credible competitor in terms of the features it offers and the platforms it supports.

As Microsoft sees it, “If you use Office, there is no reason you should use another cloud storage service,” says Angus Logan, OneDrive’s head of product management and marketing. “We want to take price and size off the table and let people choose an experience.”

Storage Wars

With Microsoft’s announcement, it seemed like a good time to compile a chart of some of the major online storage services for easy comparison.

The data below–with Microsoft’s new plans highlighted at the top–lists some of the basics, but isn’t a comprehensive guide to the subject. For instance, some services place a limit on the size of files you can upload. And Apple’s iCloud in its current form isn’t quite a direct competitor for other online-storage services: It’s hardwired into iOS and can auto-backup devices which run that operating system, but doesn’t give you carte blanche to treat your space like an online hard drive. (The new version shipping later this year with iOS 8 will offer iCloud Drive, a feature more comparable to Google Drive and OneDrive–and will slash prices.)

Online Storage Plans Compared

 Service  Free storage  Paid storage (monthly) Paid
storage (yearly)
Price per
Price per
50GB/month  (minimum)
 15GB $1.99/100GB
n/a $1 $1  Android,
iOS, Windows
Office 365 Personal
(includes Office)
 n/a 1TB/$6.99 1TB/$69.99 35¢ 29¢ Android,
iOS, Windows
Office 365 Home
(includes Office)
n/a 1TB/$9.99 for up to 5 users 1TB/$99.99 for up to 5 users 50¢
(or 10¢ for 5 users)
(or 8¢ for 5 users)
iOS, Windows
 Apple iCloud (current pricing)  5GB n/a 10GB/$20
$8.33 $8.33 iOS
 Apple iCloud (upcoming iOS 8 pricing)  5GB 20GB/99¢
Plans up to 1TB TBA
n/a $1 $1 iOS
Bitcasa 5GB; more available through referrals 1TB/$10
50¢ No fixed cost
with unlimited
Android, iOS
 Box  10GB  100GB/$10 n/a $5 $5 Android, BlackBerry,
iOS, Windows Phone
Dropbox 2GB;
more available through referrals
$5.00 $4.16 Android, BlackBerry, iOS, Windows Phone
Flickr (photos only)  1TB  none n/a n/a n/a Android, iOS,
and an aging Windows Phone app
Google Drive 15GB 100GB/$1.99
na $1 50¢ Android, iOS

The stats above show the dizzying disparities between services at the moment. Free amounts of storage range from Google and Microsoft’s roomy 15GB down to Dropbox’s skimpy 2GB. And with paid options, you can fork over anywhere from $8.33 to get 50GB of space for a month (iCloud’s current pricing) to 29¢ (Office 365 Personal with yearly pricing–which, again, includes an entire office suite as part of the bargain).

Now that Google and Microsoft are pushing the price/capacity envelope so aggressively–and Apple plans to make iCloud a much better deal–I wonder how long the competition can hold out before it has to bump up its  capacities and ratchet down its pricetags?

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