Dogged by competition, Dropbox now gives subscribers 1 TB for $10 a month, but backing up data to an external hard drive is still cheaper.
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With storage prices plummeting and competitors like Google offering unlimited storage for $10 a month, cloud storage pioneer Dropbox has responded by offering 1 TB of storage to customers on its $10-per-month Pro subscription plan.
"We don't want you to worry about choosing the right plan or having enough space," the company said in a blog post.
Investors might worry nonetheless about whether Dropbox has chosen the right business plan. Digital storage just keeps getting cheaper. With 3-TB hard drives selling for $99, that's about around 3 cents per GB, four times less than what Dropbox is charging ($120 for 1 TB, or 12 cents per GB) at monthly pricing, or three times less at the discounted $99-per-year price.
Given the sophistication of syncing and file-sharing software like BitTorrent Plus or CrashPlan, it's relatively simple and more cost effective to back up one's files across a network to a storage device without the involvement of a cloud storage provider.
What's more, storage prices have declined just as users are warming to streaming services, which don't require significant storage capacity. So storage capacity that might have gone to storing media files is likely to remain unused.
This doesn't appear to have dampened enthusiasm for the company. In a 2009 meeting with Dropbox CEO Drew Houston, as recounted in Forbes, Apple CEO Steve Jobs said that he considered Dropbox more of a feature than a product and later offered to acquire the cloud storage service for "a nine-digit price." Houston rejected the offer and Jobs said he was going after Dropbox's market. Two years later, Apple launched iCloud. Nonetheless, Dropbox earlier this year was said to be worth about $10 billion.
Some investors clearly see value in the company's 300 million users. To turn users of the company's free storage offering into paying customers, Dropbox isn't just focused on expanding commodity storage capacity. It has also updated its Pro plan to include new file sharing controls and security features.
Dropbox Pro users can now create passwords for shared links, to prevent shared links from providing unauthorized file access. Users also can set expiration dates for shared links and specify whether shared files can be edited or only viewed.
In addition, Dropbox customers can delete Dropbox files from lost or stolen devices using a remote wipe option. They can direct the service to erase files from the Dropbox folder on a missing device when it next comes online.
File security happens to be one of the few services that cloud storage providers can offer that people can't easily replicate using local storage devices. Just having one's data backed up offsite has some value for disaster planning.
Security from competition remains a challenge.
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Thomas Claburn has been writing about business and technology since 1996, for publications such as New Architect, PC Computing, InformationWeek, Salon, Wired, and Ziff Davis Smart Business. Before that, he worked in film and television, having earned a not particularly useful ... View Full Bio
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