Microsoft Goes All-in With Unlimited Storage for Office365 Users
The online storage game just became even more aggressive as Microsoft made a bold move to unlock the limits of their OneDrive service for Office365 subscribers today. By taking the leash off of storage, this could certainly change the view for customers of the popular online collaboration tools.
“While unlimited storage is another important milestone for OneDrive we believe the true value of cloud storage is only realized when it is tightly integrated with the tools people use to communicate, create, and collaborate, both personally and professionally.” Chris Jones – Corporate VP, OneDrive and SharePoint
Commodity Cloud Storage – The New Loss Leader
Many have talked about the “race to zero” that is happening in cloud services. This is a virtual drive to reach the ideal point where customers tip the scale to offset the low cost. By commoditizing some services, companies like Microsoft and Google have created a challenging situation to keep profitability while the chip away at each other’s customer base.
In storefront retail, there is something called the loss leader. This is usually a door crasher type of situation which sells one item for a price below the actual cost in order to draw in customers and hopefully up-sell them once they are in the store.
This practice is making the move to online services now, and Microsoft has a clear path to where they want take this. More customers using Office365 subscriptions is continuous revenue stream which will drive further innovation.
Finding the Inflection Point versus the Profit Curve
While traditional product pricing was geared towards managing the return on investment of that single product stream. In most cases, Office365 would be regarded as a subscribers per month metric, and at some point on the curve there would be a point where the revenue crosses the cost curve.
With moves like this, it seems that Microsoft is looking to make a serious push and create an inflection point where not only does the profit curve rise, but rise rapidly. We have seen that Microsoft is all-in on its cloud strategy. If they can find success with adoption, the free OneDrive will truly be a drop in the bucket among the positive revenue they can derive.
What do you think? Is this enough to make you switch?