Promising the Sky

Microsoft’s Unlimited Cloud Reversal

Microsoft_logo_lThis week, Microsoft announced changes to the unlimited OneDrive cloud storage programme it launched in 2014. The company had offered infinite file space to its Office 365 subscribers, but this is now being scaled down to 1TB of storage — a benchmark level that CCS Insight has previously predicted will become a default for cloud services. The free 15GB originally offered to non-subscribers is now being scaled down to 5GB.

This is a reversal of the trend we’ve seen in the past few years as service providers grant an increasing quota of cloud storage for photos, video and other files. Microsoft cites “extreme backup scenarios” as the reason for its policy changes — a euphemism for end-user abuse. The company stated that “a small number of users backed up numerous PCs and stored entire movie collections and DVR recordings. In some instances, this exceeded 75TB per user, or 14,000 times the average”. OneDrive subscribers will be given a one-year buffer to make other arrangements for their content.

A yearly subscription to Office 365 Personal costs $70 according to Microsoft’s Web site, and extreme storage users found amazing value in the service. Dropbox, for example, charges $10 per month for 1TB of cloud storage, and Amazon offers its Unlimited Everything cloud storage plan for $60 per year.

Microsoft’s new OneDrive policy raises the problems of permanence and the true meaning of “unlimited”. All-you-can eat packages can be driven to the extremes, making the offers risky for the providers. Business models change over time, and services designed to be sticky for the consumer can also be sticky for the provider — it can be difficult to pick up and move on when there’s a risk of brand damage if cherished services are shuttered.

Unlimited offers are particularly complicated when they involve a scarce resource like spectrum. Sprint recently announced a throttling scheme for subscribers to its unlimited data plan, with users who consume more than 23GB of data per month given lower-priority network access during times of heavy traffic. Sprint says that 3 percent of post-paid subscribers overextend fair usage, and throttling is meant to ensure quality of service for the remaining 97 percent.

It appears that Microsoft’s unlimited reversal has caused limited damage to the company’s reputation. Despite the best intentions, the promise of unlimited can sometimes lead to misunderstandings between providers and subscribers. Microsoft has demonstrated that the sky can’t always be the limit.

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