Microsoft Partially Takes Back Changes To OneDrive’s Storage Caps

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Microsoft announced changes today to OneDrive’s storage limits, partially undoing unpopular amendments it detailed this November. The new rules include refunds for unhappy customers, more storage for select free users, and in some cases, a free, one-year subscription to Office 365 Personal.

In November, Microsoft made two key changes to OneDrive. I quote from the original announcement [emphasis TechCrunch]:

  • We’re no longer planning to offer unlimited storage to Office 365 Home, Personal, or University subscribers. Starting now, those subscriptions will include 1 TB of OneDrive storage. […]

  • Free OneDrive storage will decrease from 15 GB to 5 GB for all users, current and new. The 15 GB camera roll storage bonus will also be discontinued. These changes will start rolling out in early 2016.

As you can imagine, the new policies were roughly as popular as Diet Sprite at a NASCAR event.

Ars Technica was blunt: “Microsoft drops unlimited OneDrive storage after people use it for unlimited storage.” Users, excited to have access to a strong free storage tier, and unlimited storage if they were paying Office 365 customers, were disappointed to see their plans change. Perhaps ‘disappointed’ is too soft a phrase. Read for yourself.

Here’s the new language, as quoted from a post from Microsoft on its user forums, concerning OneDrive, storage and the like [emphasis TechCrunch]:

  • Office 365 Home, Personal, and University subscriptions will continue to include 1 TB of storage. Any subscriber who received additional storage as part of our unlimited offer will keep it for at least 12 months. For anyone unhappy with the decision to not offer unlimited storage, we will offer a full refund.

  • For customers of our free service who have over 5 GB of content and who are directly impacted by the storage change, we will offer one free year of Office 365 Personal, which includes 1 TB of storage.  These customers will receive an email with redemption information early next year.

  • In addition, for our biggest fans who have been loyal advocates for OneDrive, we are adding a new offer that lets you keep your existing 15 GB of free storage when the changes happen next year. If you also have the 15 GB camera roll bonus, you’ll be able to keep that as well. You can sign up to keep your storage at the link below.

So, unlimited is still out, but there are concessions in place for both paying and free users. It’s not ideal, but at the same time, Microsoft is working to make amends. Whether the above changes are enough will be a question that its users have to answer.

I suspect that not all will be assuaged.

Cloud Paper, Cloud Losses

There are three competing trends at play in all of this: The declining price of storage; the increasing clip at which we can, as users, accrete data; and competition in the storage market. Lower storage costs allow companies to offer more for less, but as users can now collect data in increasingly dense formats like 4K, we are all generating more data.

That puts tension onto lower-cost storage — if costs decline as quickly as the amount of data increases, is storage cheaper for companies to provide?

Perhaps not. Microsoft must have gauged its original choice to limit OneDrive storage for both paid and free users because the economics weren’t great. I always have a hard time generating pity for companies with tens of billions in cash, but those reserves and future cash flows belong to shareholders, and so other concerns retain weight.

Regardless, Microsoft, instead of announcing changes that might have been palatable, dropped the ban hammer on its own users and is now in repair mode. All companies fuck up, but here Microsoft should have better anticipated consumer reaction. Today’s moves, while welcome, are a bit late.

I suspect, and this is merely my view, that Windows 10 is the key driver of OneDrive adoption at the moment. Given that, the growth curve of the storage service may not be too desiccated by this particular brouhaha. The situation, however, remains sticky.

Microsoft, for all its progress on the consumer side of its business, still sometimes treats the hoi polloi as if they were business customers. Something to think about.

Featured Image: Microsoft