Dropbox Ends Unlimited Cloud Storage Following Google Change

Dropbox Inc., a provider of online data storage, is ending its unlimited option, saying a small handful of customers were using massive amounts of resources that had the potential to degrade the cloud service for the rest of its clients.

Under Dropbox’s new plan, each additional terabyte will cost $8 per month compared with the previous “as much space as needed” plan at $24 per month. (AFP)

Dropbox Inc., a provider of online data storage, is ending its unlimited option, saying a small handful of customers were using massive amounts of resources that had the potential to degrade the cloud service for the rest of its clients.

The company's highest-tier “all the space you need” storage plan will be capped at about 5 terabytes per user for new customers, the company said in a blog post shared with Bloomberg to be released Thursday. That's enough space to save about 33 million documents, Dropbox said.

While the plan was designed for businesses, some clients were instead using it for cryptocurrency mining, pooling storage with strangers, or re-selling the cloud service, Dropbox said. These uses “frequently consume thousands of times more storage than our genuine business customers, which risks creating an unreliable experience for all of our customers,” the company said.

With more than 18 million paying users, Dropbox is one of the best-known companies in the cloud storage industry and reported $2.5 billion in annual recurring revenue during its fiscal-second quarter earnings on Aug. 3. The company has worked to expand beyond storage with document management services and video-specific tools.

The change follows Alphabet Inc.'s Google removing “as much storage as you need” product branding for its highest-tier Workspace plan in May, according to copies of its website hosted on the Wayback Machine. Customers have posted on forums about being told they had exceeded storage limits and needed to pay for additional capacity. Some discussed moving to Dropbox after receiving such warnings.

A Google spokesperson said the company began rolling out “pooled storage” for customers last year, and those using over 80% of their plan's limit will be notified. While storage policies weren't changed in May, language was updated to “clarify that customers on these plans receive 5 TB of Drive Secure cloud storage per user with the ability to request more,” the spokesperson said.

Dropbox said it saw a surge of unintended uses the past few months “in the wake of other services making similar policy changes.” The company's server capacity faced increased pressure in recent weeks, said a person familiar with the issue who asked not to be named discussing internal matters.

Under Dropbox's new plan, each additional terabyte will cost $8 per month compared with the previous “as much space as needed” plan at $24 per month. Current users with less than 35 terabytes — more than 99% of top-tier plan customers — will be able to keep their current storage at the same price for five years, the company said. Those exceeding will be contacted “to discuss a range of options.”

Across the economy, more people and businesses rely on internet-based services to store and manage their files. Industry analyst IDC said that spending on cloud storage is expected to jump 25% this year to $59.9 billion, and hit $127.8 billion in 2027. For its infrastructure customers, Google increased the cost of cloud storage last year. Apple Inc. also recently raised cloud storage prices for customers in the UK. Amazon.com Inc. once offered an unlimited storage plan, before ending it in 2017. Microsoft Corp. made a similar move in 2015. Box Inc., another provider, still advertises “unlimited storage” for its enterprise plans.

“We recognize that changing an ‘all the space you need' policy will be disappointing for some customers,” Dropbox said. “While we‘re unable to offer this option going forward, our goal is to ensure that the vast majority of teams on our Advanced plan experience no disruption.”