4 ms·

Price sensitivity to consumer SaaS always catches me by surprise. Ten dollars a month is a rounding error in most budgets, a single grocery store impulse buy.

laurentdc 10y ago
It's more about paying for something you're likely not going use or need. They only offer the 1 TB tier which sounds great, but I wouldn't be surprised if most people used at best 5-6 GB. Enough to fill the 2 GB free plan, not enough to justify the 1 TB, but there's nothing in the middle. Also, subscriptions add up quickly. One less is always better.
- danieldk 10y ago
  The competition (Google, Microsoft) can probably only offer intermediate plans because they subsidize cloud drives with other products (Office, ads, etc.) to do a quick land grab. I am pretty sure that it will be hard to provide 1TB storage for $10 per month with heavy redundancy, proper security, support, etc. So they need to get their margin from people two use significantly less than 1TB. Also, you are not only paying for storage, but also maintenance of network infrastructure and the client/server software.
viraptor 10y ago
It adds up. A few bucks for dropbox, a few for music streaming, a few for audible, a few for repo hosting, a few for test vms, a few for something else. Suddenly you're paying annually over $1k for all the services that cost you less than ten dollars a month. I did mix up consumer and development, but I think the general point still stands.
- danieldk 10y ago
  I did mix up consumer and development, but I think the general point still stands. I don't think so, especially because you are mixing the two. For an employee that costs $6000 a month, $10 per month per employee that increases productivity significantly is a steal. If you have a household budget where you can spend $100 per month on luxury goods, you might want to forgo the technical advantages of Dropbox over competitors and opt for a competitor that undercuts Dropbox' pricing.
  - viraptor 10y ago
    Ok, shouldn't have mixed them. What I meant is that you can replace the VMs with netflix, instagram filters, or some other consumer services. There's lots of standard luxury goods-like services available. And you're right - you may go with the cheaper competitor when you don't have that kind of money to spend on something not necessary. The parent said: "Price sensitivity to consumer SaaS always catches me by surprise." - which is what we both seem to agree on - even consumer prices add up and people will go for cheaper alternatives.

laurentdc 10y ago

It's more about paying for something you're likely not going use or need. They only offer the 1 TB tier which sounds great, but I wouldn't be surprised if most people used at best 5-6 GB. Enough to fill the 2 GB free plan, not enough to justify the 1 TB, but there's nothing in the middle. Also, subscriptions add up quickly. One less is always better.

danieldk 10y ago
The competition (Google, Microsoft) can probably only offer intermediate plans because they subsidize cloud drives with other products (Office, ads, etc.) to do a quick land grab. I am pretty sure that it will be hard to provide 1TB storage for $10 per month with heavy redundancy, proper security, support, etc. So they need to get their margin from people two use significantly less than 1TB. Also, you are not only paying for storage, but also maintenance of network infrastructure and the client/server software.

viraptor 10y ago

It adds up. A few bucks for dropbox, a few for music streaming, a few for audible, a few for repo hosting, a few for test vms, a few for something else. Suddenly you're paying annually over $1k for all the services that cost you less than ten dollars a month. I did mix up consumer and development, but I think the general point still stands.

danieldk 10y ago
I did mix up consumer and development, but I think the general point still stands. I don't think so, especially because you are mixing the two. For an employee that costs $6000 a month, $10 per month per employee that increases productivity significantly is a steal. If you have a household budget where you can spend $100 per month on luxury goods, you might want to forgo the technical advantages of Dropbox over competitors and opt for a competitor that undercuts Dropbox' pricing.
- viraptor 10y ago
  Ok, shouldn't have mixed them. What I meant is that you can replace the VMs with netflix, instagram filters, or some other consumer services. There's lots of standard luxury goods-like services available. And you're right - you may go with the cheaper competitor when you don't have that kind of money to spend on something not necessary. The parent said: "Price sensitivity to consumer SaaS always catches me by surprise." - which is what we both seem to agree on - even consumer prices add up and people will go for cheaper alternatives.