I'm hoping this will compel Dropbox to reevaluate their pricing structure. Storage from Google is an order of magnitude cheaper than Dropbox - paid storage starts at $5/year, and for the same $100/year as the cheapest Dropbox account (50GB) you get 8x the capacity.
That runs you into pathological customer territory. People who care about the difference between $20/year and $40/year are not going to be sources of any significant profit, and statistically are the sort that will consume customer service resources for help with trivial issues. Remember that if just one out of five folks who would sign up at $20/year convinces themselves to spend $100/year, you come out ahead.
Dropbox is running on top of S3. If you look at the S3 pricing per GB for storage and bandwidth, it's not exactly cheap. Back of the envelope, I'm guessing a 50GB account costs Dropbox something like $3-$4 per month. Their $9.99 plan can't really go down by an order of magnitude and still be profitable.
That, and there are a lot of the same files stored across accounts; DB stores it 'once' and delivers it to all the people with the same hash of that file.
S3 is really expensive. Dropbox really should get themselves their own infrastructure. There's no reason a huge company like Dropbox should stick with S3, and I'm pretty sure they're already planning/working on moving away from it.
Or Dropbox could press for a US antitrust investigation as Google enters yet another market to dump free product financed by its search and web ad business.
