The cost of disk in the Microsoft cloud

The cost of storage is more likely to fall than rise.

A question asked by the odd prospective customer of Microsoft Office 365 is “what’s to stop the price going up”? Given that customers (through Telstra in Australia) are on a month by month contract there’s nothing contractually that would stop the prices going up. Commonsense tells us that the more people buy something the cheaper it becomes to deliver.

This was seen twice this year with Office 365 – once when the Kiosk mailbox licence doubled in storage space from 500MB to 1GB, and most recently when prices on most Office 365 licences dropped approximately 20 percent.

Up until the most recent price drop Microsoft was losing business from organisations that wanted to migrate their data from on-premise file servers to SharePoint Online. This was being lost to services like Dropbox or Box that offer basic cloud-based storage services with some elements of collaboration.

SharePoint Online on the other hand was the opposite – built for collaboration and feature rich, however it was very expensive for storing data. The previous price for SharePoint Online storage was $3.95 per gigabyte per month. For the average SMB this was a very expensive proposition.

Just before the price drops were announced I was working on a solution that would use Blob Storage from Windows Azure (another Microsoft public cloud service). This was effectively raw disk space and was a fraction of the cost of SharePoint Online additional storage. The solution I had developed allowed users of SharePoint Online to access and search contents of Blob Storage, as well as retrieve files. I had effectively created a workaround to the problem of high costs.

However looping back to my original point, prices for SharePoint Online dropped with mass adoption – it  now costs only $0.31 per gigabyte per month. For an SMB with 100GB of data this is only $31 per month on top of other Office 365 subscriptions. While still more expensive than basic disk solutions like Dropbox and Box, it allows SMBs to move all their files into SharePoint Online and ultimately free themselves of on-premise servers or network attached storage.

The end result is that organisations storing all of their content in SharePoint Online will have access to it from any device at any time which makes them far more mobile compared to organisations who store everything on-premise.


Loryan Strant is a Microsoft Office 365 MVP (Most Valuable Professional). Follow him on Twitter @TheCloudMouth.

About Loryan Strant

Loryan Strant is the managing director of Paradyne, a leading Cloud Engineering company. He is also a Microsoft Most Valuable Professional (MVP) for Office 365. You can follow him on Twitter @TheCloudMouth

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