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Google Declares Cloud Storage Price War With Apple and Dropbox, Then Sees Outage


New prices for the Drive suite of apps and services will make the market for cloud storage all the more competitive -- if Google can stay reliable, that is.

Last weekend, Google (NASDAQ:GOOG) declared all-out war on its cloud-storage rivals and announced new pricing for its Drive service. On the low end of Google's new offerings, users can access 100GB of storage space for just $1.99 per month, while the amount of free space has tripled to 15GB. By comparison, Dropbox charges $9.99 per month for 100GB while Apple's (NASDAQ:AAPL) iCloud service costs $20 per year for 15GB and $100 per year for 50GB (Apple doesn't even offer 100GB).

Because Google is now obviously winning in the price fight, it has real hopes of gaining a market share advantage in a field that has been very competitive: Last year, Apple's iCloud held 27% of the market, followed by Dropbox at 17%, and Google Drive at 10%. However, the same report that found these numbers also found that 55% of Americans with access to the Internet had never used a cloud storage system. Right now, storing music is by far the most common way consumers use cloud space. However, now that many people are choosing tablets and phones over desktop PCs (with large hard drives), they are also turning to cloud platforms to store other types of content -- family photos, videos, documents, etc. So, there is a lot of growth potential for the industry, and Google is attempting to pump up its market share with the best price in town.

Not only that, Google's cloud services are generally reliable -- but not always. Yesterday, many people who use Google apps for work experienced a disruption to service of Google Chat, Hangout (video messaging), and Sheets (the spreadsheet app in Google Drive). The company is always very quick to address these issues, but they've happened before (just two months ago, a technical problem left users without Gmail and Google Talk for 15 minutes), and they'll happen again. These small issues may not seem overly significant, but when thousands to millions of users are affected at once, an outage can easily become a big problem.

All cloud services providers face the problem of outages, as most users will attest. However, at least up until now, none of the major providers have had a widespread loss of data. These platforms are becoming more recognized by consumers, and the market as a whole is growing: According to research from Awesome Cloud Services, the market for cloud storage and solutions will reach $150 billion this year, having grown from $46 billion just in 2008. These numbers include the entire cloud industry, not just the personal storage services offered by Google, Apple, and Dropbox.

With Google's new prices and its (usual) reliability, Apple, Dropbox, and others may well have to pick up their games -- and perhaps lower their prices -- to stay competitive.

Follow me on Twitter: @JoshWolonick and @Minyanville
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