Microsoft Office 365 Customers Get Unlimited OneDrive Storage

Microsoft (MSFT) is upping the ante in cloud storage, but only for a select group (granted, a rather large group) of customers. Microsoft has taken off the 1TB cap of OneDrive cloud storage available to its Office 365 customers, which now have unlimited cloud storage on both the vendor’s consumer and commercial flavors of the cloud storage-as-a-service offering.

“Today, storage limits just became a thing of the past with Office 365. OneDrive and OneDrive for Business will now offer unlimited storage—at no additional cost—to our Office 365 consumer and business customers,” wrote Julia White, general manager of Office 365 technical product management at Microsoft, in a blog post.

This appears to be the next step in the continuing race to the bottom in cloud storage pricing. It’s interesting that this news comes shortly after cloud storage competitor Bitcasa axed its unlimited cloud storage offering, noting insufficient—and even abusive—usage.

Like Microsoft, the biggest competitors in the cloud storage space have been spending some time leapfrogging each other with more and more cloud storage for free and in various pricing structures. Granted, the OneDrive unlimited storage is only available to Office 365 software-as-a-service (SaaS) subscribers, but it’s another strategic move that will increasingly push the general costs of storage in the cloud down.

Some speculate that cloud storage will soon hit the $0 mark. It’s not quite there yet, and maybe it won’t ever be. An unlimited cloud storage for a paying user base makes some sense, and it will be few customers that will use more than 1TB of cloud storage on OneDrive.

Will others, such as Google (GOOG), follow Microsoft’s lead, offering unlimited cloud storage as a perk for subscribing to their cloud-based productivity suites? Only time will tell. But Microsoft has thrown the gauntlet. Who will pick it up?