A terabyte too tight? Small businesses, beware the cloud storage ceiling
Dropbox, Google's G Suite, Microsoft's OneDrive, and Apple's iCloud each have pricing and service policies that close the door on tiny businesses. Here's why that's bad for customers and the storage providers, too.
Bizarrely enough, it's difficult to determine what constitutes a "small business" in the United States. The US Small Business Administration has a table of standards [PDF] that ranges from about 250 to over a thousand employees. On the other hand, the Affordable Care Act kicks in certain requirements for businesses with over 50 employees. So, what exactly is small?
When I researched my book, How To Save Jobs [free download], I was shocked when I discovered that the US Bureau of Labor Statistics (BLS) didn't track labor statistics for about 75 percent of all companies. That's because three out of four US businesses are considered "nonemployer" businesses, meaning they don't manage a payroll.
The Census Bureau concurs that these tiny businesses aren't worthy of attention. They said (and I'm quoting from my book), "Because nonemployers account for only about 3.4 percent of business receipts, they are not included in most business statistics."
Yet, this group of businesses, when factored against America's gross domestic product, actually generate revenue in the neighborhood of $483 billion. In other words, these untracked businesses are worth billions to our economy. I call this group of businesses "tiny businesses." Not only are they getting short shrift from the US government, they're also hitting a data volume ceiling imposed by cloud storage vendors.
So who are these tiny businesses, and why should we at ZDNet care? After all, we're an enterprise-focused IT site. Enterprise is certainly more than 50 employees. The answer is simple: a lot of folks in IT are freelancers and individual contributors. They're also often the people brought in to make purchase recommendations.
I'm part of the ZDNet team, but my very small business consists of two people. Given that my tiny company makes payroll, it's probably not in the "nonemployer" category according to BLS. Even so, with two employees, I've run into the same data ceiling limits that many of you may have encountered.
In this article, we'll look at Dropbox, Google's G Suite, Microsoft's OneDrive, and Apple's iCloud. Each has pricing and service policies that, at least in some ways, close the door on tiny businesses.
To be clear, nothing any of these companies is doing is wrong. They're certainly entitled to charge what they want for their services. But given the size of the potential opportunity, along with the incredible lock-in that cloud storage creates, it would make sense for the SaaS storage companies to do everything they can to bring in a business while it's small, because the long-term upside is so huge.
Understanding cloud storage lock-in
Since I mentioned lock-in, let's talk about that first. My local on-premises storage is huge, insanely so. I have about 90 terabytes under air inside my house. As ZDNet's Jason Perlow rightly said, I'm an "edge case freak." Much of that is data used as part of my research projects. In addition, there are some very large image libraries for corporate presentations. There are some very large video archives, mostly of video we've produced over the years. Since I responsibly keep multiple local backups of everything crucial, the storage use adds up.
CrashPlan provides unlimited backup storage, along with journaling, so it's possible to go back to almost any version of any file since I first signed up with the company back in 2010. That's an amazing resource.
As for lock-in, here's the challenge. Back when I wrote about CrashPlan's requirement of keeping data online only for active machines, I considered moving off the service. If I did, I could certainly download all my files. But while I'd be able to get the latest-date snapshot of my files, I'd lose all that valuable journaling.
That doesn't count the upload and download time. Using Meridian Outpost's handy little bandwidth calculator, I can estimate that downloading all those files (without the version variations) would take about 17 days (assuming nothing blew up). I have pretty fast download bandwidth.
I've also paid for the best upload bandwidth possible from my local provider, which is sadly, a miserable 10 Mbps. Uploading all 7 TB to another service (once I downloaded it) would take over 500 days. Yep, over a year.
That, boys and girls, is lock-in. Once you've put your data on a cloud service, it's highly unlikely you'll move it to another service. It's very much in the best interests of the storage services to get your business when you're small.
And yet, they put up some barriers. In each of these cases, I'll explain what I know of their storage ceiling for tiny companies, and share with you my beef about their approach. Let's start with Dropbox, since that's the one that sticks in my craw most often.
Every time I log into Dropbox, I'm reminded that there's a Business plan. You can't miss it. The prompt is not only at the top of the screen, but in a big box at the left.
I'm already paying for two Dropbox Pro accounts, but I'd sure love to get Dropbox Business. As you can see from the image below, Dropbox claims to offer unlimited storage, but only if you buy five seats or more.
There are two aspects of this I like: the unlimited space and the unlimited versioning. That would be great. But since I do have versioning with CrashPlan, it's not a huge issue.
From a pricing point of view, rather than paying $99/year per user, the Business plan is $150/year per user. I'd pay that, in a heartbeat. But the price of entry isn't just the increased per user cost, but the base number of users. If you want Dropbox for Business, you're starting at $750/year because you'd have to buy all five seats, even if you're just using a few.
At that price, it might actually be worth it, even for a two-person business. As you look at other services, though, keep in mind one additional factor: even if you pay that, you'll have to jump through some hoops to get the storage you're buying. Feast your eyes on this tiny print:
If you can't read the super-tiny print, here's what it says: "Teams start off with 1 TB (1,000 GB) of space per user. If you need more space, simply contact us through the admin console, and we'll work with you to accommodate your storage needs at no additional cost."
Yep, you're going to have to deal with some sales process and negotiate to get the unlimited data you're supposedly paying for. That's a bit worrisome.
Keep in mind that once you choose a cloud storage service, the time it will take to transfer to another might be prohibitive. So if you're counting on that data, and you have to wait for a salesperson to get back to you for something you've already bought, you could be up a creek.
Google's G Suite
Google's G Suite requires some wary shopping. As the company's pricing programs show, they're clearly looking to optimize for business customers rather than individual buyers. I'll show you that over the next few screenshots.
Let's start with the page you get when you click on the upgrade options and decide to look at the G Suite Business option. As the image below shows, there is no mention of a base number of users. It's not a screenshot of the full page, but nowhere else on that page is there a mention of a limit.
This lack of specificity worries me when it comes to terms of service. If this page is leaving out important information, my concern is that "unlimited" may have constraints tied to it that are not spelled out in any easy-to-find way.
When you compare the editions, between Google G Suite Business and Google G Suite Basic, that's when you see the 1TB limit for fewer than five users.
Even so, if you're willing to buy five seats, the base entry price of $600/year for unlimited storage (without the hassle of begging a salesperson), isn't really a bad deal.
Want to know what is a bad deal? If you buy storage as an individual. Feast your eyes on these numbers:
If you're not buying the G Suite Business plan and you need to store 7TB, you're looking at $99/month, or about $1,200 per year. If you're storing more, if you max out at the 30TB plan shown, you're paying $3,600 per year.
The bottom line for Google storage is pretty simple. If you need a lot of storage, get a G Suite Business account, pony up your minimum of $600/year, and store all you need. Of course, that's assuming there's nothing buried in a terms of service agreement that will get you banned if you actually use unlimited storage.
Speaking of using unlimited storage, this one's for the Microsoft record books. If you want unlimited cloud storage, Microsoft is certainly not the company to turn to.
Our tour through history starts in October of 2014, when Microsoft made a big fanfare by saying that all Office 365 customers would get unlimited OneDrive storage with their plans. Much to Microsoft's chagrin, some users apparently actually made use of that storage. Who'da thunk it?
One year later, in November 2015, Microsoft cancelled the program. Users who were using unlimited storage, including a few who backed up 75TB or more (no, that wasn't me), would have about a year to get their data off Microsoft servers. In addition to cancelling the unlimited storage for paying customers, Microsoft also reduced the amount of storage provided to free users.
As you might imagine, there was an outcry to this Scrooge-like action. In December of 2015, Microsoft decided that apologizing (but not returning the storage) would be the best course. Yeah, that worked. And you wonder why Dropbox has grown so fast.
Fast forward to today, and the business editions (as distinguished from the enterprise editions) are storage-space capped to 5TB per user. That is, of course, unless you're a business with five or fewer users. You, as the cloud providers have decided, need only 1TB per user.
While the storage cap for five or more users is a little more definitive than Dropbox's unlimited-but-you-need-to-ask, it's still far less than Google's unlimited (assuming you haven't tripped over a hidden term of service). Even so, you're looking again at about $600/year for five users. That will get you 25TB of storage, which is something, I guess.
Until, of course, when Microsoft changes its mind again. Hey, you never know. It's happened before.
Apple maxes at 2TB. As it turns out, that's the maximum amount of storage you can buy on a modern Mac. But what about backups or journaling? Nope. What about if you use a lot of storage for video production? Nope. You get 1TB per user for $120/year or a 2TB plan for $240/year.
That's it. Take it or leave it.
Given Apple's focus on using iCloud for universal file sharing, and the idea that many of us will have a lot more than just one machine (an iPhone, some Macs, an iPad, etc), the 2TB limit may well be a ludicrously low limit for some.
I've told you why I think limiting storage for tiny businesses is short sighted because it gives up on the lock-in that could be so valuable. So let's just summarize the services and my beef with each.
Dropbox - $750/year entry point for unlimited. My beef: you have to beg a salesperson to upgrade your storage.
Google - $600/year entry point for unlimited storage. My beef: is there a ToS you'll run afoul of, especially considering not all pages showing pricing lists limits?
Microsoft - $600/year entry point for 25TB of storage. My beef: no unlimited storage, convoluted enterprise plans, seriously, can't MS do better here?
Apple - $240/year/user for 2TB storage: My beef: no expansion beyond 2TB.
What I'd really like to see, and I'm looking at you, Dropbox, is just a per-user premium price for business or team accounts, with no minimum number of seats. Make it easy for tiny businesses to jump from $99/year to $150/year per user and just wait. There will be more and more users showing up over time.
Since the whole idea of cloud computing is easy, painless scalability, I contend it's foolish that cloud vendors put an artificial block on onboarding new customers into their business plans. Rather than forcing a huge decision-making process on whether to over-buy, why not make it easy for small business owners to simply sign up once, and then just add more and more services over time? After all, that's the magic of cloud as a business model.
So there you go. What's your situation? Are you a tiny business? Do you have enough storage? Are the current plans good enough for you? Answer in the TalkBacks below.