An anonymous reader writes: Google and Amazon are both aggressively pursuing the cloud storage market, constantly increasing available storage space and constantly dropping prices. On its face, this looks great for the consumer — competition is a wonderful thing. Unfortunately, many smaller companies like Box, Dropbox, and Hightail simply aren't able to run their services at a loss like the giants can. Dropbox's Aaron Levie said, "These guys will drive prices to zero. You do not want to wait for Google or Amazon to keep cutting prices on you. 'Free' is not a business model."
The result is that the smaller companies are pivoting to win market share, relying on specific submarkets or stronger feature sets rather than available space or price. "Box is trying to cater to special data storage needs, like digital versions of X-rays for health care companies and other tasks specific to different kinds of customers. Hightail is trying to do something similar for customers like law firms. And Dropbox? It is trying to make sure that its consumer-minded service stays easier to use than what the big guys provide." It's going to be tough for them to hold out, and even tougher for new storage startups to break in. But that might be the only thing keeping us from choosing between the Wal-Mart-A and Wal-Mart-B of online storage.