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After two years of offering unlimited storage on Amazon Drive for $60/year, Amazon is stopping this unbelievable deal. The move is not altogether unexpected. Unlimited storage from cloud storage providers have been abused by customers no matter which vendor has offered it. Instead, for the $60/year, Amazon will only offer 1TB of storage – still a significant amount of storage for the price, and competitive with Google Drive, Microsoft OneDrive, Dropbox, Box, and others.

Neuralytix posits that very few, if any, cloud storage providers are turning a profit on cloud storage. However, despite being a loss leader, cloud storage is a very attractive lure for those providers offering complementary products and services – for example, Microsoft Office 365, with OneDrive. At this point in the market, it is a land grab. The more customers’ data a provider can capture, the more sticky the customer is to the provider.

Remember, this is the consumer market; and while more technically advanced users may utilize a multi-cloud strategy, moving from one cloud to another is a daunting task for most, and one that most people will balk at. Imagine a customer who has 1.5TB stored on Amazon Drive, their propensity to move all that data, and any links, pointers, etc. that pointed to that data, is very small. They are more likely to pay the extra $60/year to allow the data to remain at Amazon.

Neuralytix believes that this was Amazon’s intent from the beginning, and we believe that they have executed their plan very well.