A report published in Computerworld cites how the company is under increasing pressure from competitors to offer additional capacity at its current pricing. Apart from traditional consumer online storage services such as SugarSync, Carbonite, Mozy, new deep-pocketed players in the arena including Microsoft, Apple and Google are forcing Dropbox to face the heat.
Microsoft with Azure, Apple with iCloud and Google with its Drive offering seem to offer more than Dropbox in terms of price-to-value ratio.
For instance, prior to the change effected July 10 evening, Dropbox 100GB package cost $99 per year, while 200GB package cost $199 per year. The Dropbox Team package which includes administrative tools is billed at $795 for up to 1TB and five users.
In contrast, Google's storage offering Drive included 5GB free capacity that allows an upgrade of 25GB for $2.49 a month, 100GB for $4.99 a month and 1TB for $49.99 a month. With a paid account, the storage capacity of user's Gmail account also expanded to 25GB. On annual basis, the 100GB package costs $60.
The announcement from the official website of Dropbox makes it appear as though the storage company doubled its paid allotments as a customer service. However, it is pretty clear that market forces are compelling the storage firm to revisit its strategies and offerings.
Commenting on the development, Gartner analyst Michael Gartenberg has told Computerworld, Certainly, when Google came into the market with Drive with four times the storage for what Dropbox was offering, I'm not surprised to see a shift in pricing for them to remain competitive.
But it must be noted that Dropbox is not the first company to slash prizes. Early, in March, Microsoft slashed the price of its cloud storage services as did Amazon with Elastic Compute Cloud.
Elaborating on the price cut, Gartenberg goes on to add: As large players such as Apple, Microsoft and Google are getting into this space and can really drive the costs down, it's going to be key for companies like Dropbox to make sure they're not overpriced in terms of consumer perception and to continue to come up with added services.