Google slashed the costs of hosted storage for its Picasa and Gmail applications, offering 20 gigabytes (GB) of storage for $5 per year, or twice as much for one quarter of the previous price.
For perspective, that's enough storage for 10,000 high-resolution photos taken with a 5 megapixel camera. For more perspective, Google's storage costs as recently as January 2009 was $20 for 10 GB -- not bad, but a relative drop in the bucket compared to Google's latest cut.
Will users begin entrusting more e-mail and photos to Google server farms? It's hard to say, but certainly cutting storage costs for its Picasa photo-sharing and Gmail applications is a sign the cloud computing market is maturing.
Gmail users currently get 7 GB for free, while Picasa users enjoy 1 GB gratis. Google engineer Elvin Lee noted that when Gmail launched five years ago, it came with one GB of storage, but people manage to use up their 7 GB, leading Google to offer more storage. Picasa users used up their 1 GB of free space as they started taking more pictures and moving full resolution backups of their photo collection into the cloud.
In fact, while Google's standard storage overflow offerings range to one terabyte for $256 per year, the company is pledging to support users for up to 16 terabytes, at $4,096 per year. Call it a cloud of one's own.
EWeek pressed Google on reasons for the cost cuts. Was it a competitive gesture? After all, Google's cut came one days after Cisco Nov. 9 launched its Cisco WebEx Mail hosted e-mail app for $3.50 per user per month with 5 GB of storage, and one week after Microsoft trimmed prices on its Business Productivity Online Suite from $15 to $10 per month.
A Google spokesperson said:
""The technology continually increases in efficiency -and this progress is one of the main things that facilitate the movement to the cloud. Google engineers have been working on improving our infrastructure to reduce costs and pass the savings to users, and we're dramatically lowering our prices to make Google paid storage even more affordable.""
Of course, a little competition from Cisco, Microsoft and IBM, which last month launched Lotus iNotes for $36 per year, helps keep Google on its toes.
These are new threats not only to Gmail, but to Google's broader Google Apps platform, which staked a claim in the cloud three years ago for businesses.