STORAGE WARS: 4 Takeaways from Microsoft OneDrive’s decision to cut back on Free and Unlimited Tiers

OneDrive was trending recently on Twitter for all the wrong reasons. At a time when there had been Storage Wars raging on between the different online solutions (Google Drive, OneDrive, Dropbox, Box, iCloud, etc), Microsoft OneDrive’s latest move seems to be a step back. OneDrive made the shocking announcement that their service which had been offering an Unlimited storage option will be cutting it back to 1TB for all users. The service will also be cutting back the entry, free tier from 15GB to 5GB. There are other changes as well, including dropping 100GB and 200GB storage options, only allowing a 50GB tier between 5GB and 1TB. They are also dropping their free 15GB for users on mobile devices who had enabled camera roll backup. More after the tweet from OneDrive making the announcement.

There are many points and lessons to be made from these recent decisions. Let’s look at three takeaways we can get from the bizarre decision by OneDrive.

4. Do not punish the whole because of a few bad apples

OneDrive states their reasoning for cutting back the Unlimited plan to 1TB is because of some abusive users. Some who were apparently using upwards to 75TB in storage. A lot could be stated about the definition of Unlimited and how complaining that people took your company at its word makes this one of the more ridiculous reasons for scaling back on your users. A lot could be said about that.

But rather than focusing on that, let’s focus on how such a decision could have been handled with greater delicacy.

3. This is why we can’t have nice things

Any website community or service will have abusers of said community or service. The same could also be said of any business or organization. Some employees will abuse loopholes in business policies, especially where flexibility may exist. But the last thing a leader or organization should want to do is punish everyone equally, even though there were only a few bad actors.

OneDrive could have warned abusive users with the threat of their account being deleted. This would have taken care of the 75TB users without even making a stir among the typical user. Instead a blog post is shared across social media, announcing how everyone will be punished equally.

The lesson? Whether managing staff or customers, never abuse all equally for the actions of a few. Never send out the This is why we can’t have nice things memo.


2. Don’t bite the hand that feeds

The above image shows how the OneDrive blog completely crashed in the aftermath of users rushing their post about their decision to cutback on storage. There are better ways to flood your blog with traffic, than by posting a hugely negatively impactful post for users.

Show appreciation for loyal customers with actions, not words

The blog post by OneDrive reads in a condescending manner, explaining to their users how to properly use the product and how the decisions they’ve made are for the greater good because it helps them focus on productivity and collaboration which is their main purpose. Basically, a lot of words to explain how their users are holding it wrong. This isn’t anything new, unfortunately, a lot of other companies have made similar statements to customers and leaders to employees.

Instead of focusing on extreme backup scenarios, we want to remain focused on delivering high-value productivity and collaboration experiences that benefit the majority of OneDrive users.

– The OneDrive Team

Instead of focusing on feeding customers and staff a load of words, try to seek ways to show appreciation through actions. Actions speak louder than words, they say. For example, OneDrive could have grandfathered in their current users, but instead they are forcing all of their current and future users to the new storage plans.

Loyal customers should be rewarded, and agreements made between loyal customers (yes, even free tier ones) should be upheld. This whole debacle could have gone over much better for OneDrive, if they had treated loyal customers with respect and appreciation. Show, not tell. It would be on par to a leader saying she appreciates all of the hard work her senior staff does and the years of loyal service they had provided to the organization, but then giving a larger raise to her junior staff.

Prove it. Words are proven with actions.

1. Backpedaling during a major competition is a bad idea, but a time to jump for the competition

The new announcements not only made their customers angry, because they feel punished and mistreated, but it also comes at a time when cloud storage wars have been in full-swing for a few years now.

We’ve been watching as companies like Google, Apple, Microsoft, Dropbox and more would make a change in pricing or storage capacities and capabilities, and then the competitors would soon have to change or get left behind. Even the 15GB free tier and free 15GB for camera backup that OneDrive provided were direct results of that competition. But for OneDrive to backpedal on amount of free storage is available, especially with regards to photo and video backup, couldn’t come at a worse time. It comes mere months after Google announced its product Photos, which allows users to backup and organize photos and videos in an unlimited capacity (so long as images and videos meet a certain HD requirement). People have already been flocking to the service, and in the wake of it now it looks like OneDrive is just throwing in the towel instead of coming up with a better solution.

OneDrive now looks weak in the competition, and appears to be giving in and backing off. Appearing to focus in on the things they feel they can win, and destroying the things they feel they have been beaten on. The last impression that should ever be given during a competition is weakness or an acceptance of defeat, especially when your service and product has been on top with the rest.

If you’re one of the other competitors, however, now would be the time to send out a welcome message to those customers who feel neglected and unappreciated. Now would be a good time for a Google Drive sale on storage, or for Dropbox to raise their free tier (which is a measly 2GB) to 30GB matching the storage those with free and camera roll backup will be losing.


It will be interesting to see how OneDrive and Microsoft respond to the backlash. They’ve received a lot of feedback already on social media and their UserVoice, and some have already left the service. It also doesn’t help that a lot of tech news companies have it out for anything Microsoft, so they’ve practically handed out their own butt on a platter and asked for it to be kicked.

These are just a few takeaways. What other lessons do you see in this? Do you believe they handled it well enough? Or could it have been better? How would you have handled it, if you were in charge of this change at OneDrive? Sound off in the comments.


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