Google rolls out unified paid-for storage
People who are running out of storage on Gmail can now pay Google for additional capacity. Annual fees range from $20 for 6 Gb to $500 for 250 Gb, offered as a selection of four capacity choices. Currently, Gmail offers 2.8 Gb storage with every free account and 10 Gb storage with every paid-for business account.
When you buy extra gigabytes the capacity applies to both Gmail and Picasa photo albums. Later on we should expect to see Google Docs & Spreadsheets included in the same storage scheme. As integration between Google's services gets better (e.g. opening a Gmail attachment in Google Docs), offering unified storage capacity across all services makes a lot of sense.
The market leader in storage, Amazon's S3, offers a more flexible service where you are only charged for storage actually used (at $0.15 per Gb per month) with no requirement to decide on capacity or plans up front. Amazon also charges for traffic although the cost is only significant when massive amounts of data is transfered.
I had previously (wrongly) predicted that consumer email would offer unlimited free storage. Google's move suggests that email is no longer seen as the competitive frontier it once was; instead the applications arena is where competition is rife. It also means that the company protects itself from the hassle of policing fair use agreements while getting a (probably insignificant) revenue stream out of their previously free services. Most importantly, for users of Google's services it means that the risk of running out of space has just become a lot less likely and so a potential barrier to adoption has been minimised.