Google Drive, the company's push into cloud-based storage, has a problem. Google Inc.'s (GOOG) product has been considered overpriced, and thus not competitive, or at least not competitive on that single basis. So, Google has dropped the prices drastically. Now, the search company has to wait to see if that draws customers from other services, or whether the decision has come too late.
The evolution of cloud-based services has happened at such a lightning-fast pace that only one misstep in service or price can cost a company significant market share. Based on an analysis by Tech Crunch, the Google change is meant to allow it more readily challenge the success of Microsoft Corp.'s (MSFT) Azure, of Amazon.com Inc.'s (AMZN) S3 and of Dropbox. The tech site reported:
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Google drastically dropped the price for storage on Google Drive this week, to the point where it now undercuts virtually all of its competitors. At $9.99 per month for a terabyte of online storage, Google puts all of its competitors to shame, but there is more going on here than just a price war.
Dropbox wants $9.99/month for 100GB, SugarSync has a $55/month plan for one terabyte of data that is shared by up to three users and Microsoft's OneDrive, which only features annual plans, starts at 50GB for $25 per year, which is even more expensive than Google’s new $1.99/month for its 100GB plan. Apple wants $100 per year for its 50GB plan.
Additionally, Google's website shows that its price for 1 TB storage has also dropped to $9.99 a month.
Users of these services may have no idea how much storage they need before they pick one service. They also may be confused about what each plan offers. Some consumers will pick the product that matches the hardware they use. This may be the cause with Apple Inc.'s (AAPL) product. Both brand loyalty and ease of choice could be Google's enemy as much as pricing. The consumer also has to decide whether to switch or pick a new service based on $3 a month.
One of the aspects of pricing services that did not exist a few years ago is that some of the decisions made by companies have to be guesswork. The results of that guessing may not be clear for several years to come.
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