Demand isn't static. Your costs decrease by the storage equivalent of Moore's Law, but your customers demands increase by roughly the same amount. In short -

Demand isn't static. Your costs decrease by the storage equivalent of Moore's Law, but your customers demands increase by roughly the same amount. In short -- The first digital camera I used had a floppy disk that fit about 20 photos. (Maybe 75KB). My camera now takes 7.5MB Photos (higher if I shoot in raw) and rather than taking 20-40 in a session -- I'll take 100. The first computer I connected to the internet had a 4GB Hard Drive. I currently have around 3.9TB of storage connected to the internet. This isn't a gmail play. Barring celebrity status -- you can only recieve so many emails... (Dunbars number and all that). As my storage costs decrease I use more storage and need more backups. They mention that these roughly balance out. The problem they have is that costs like electricity/cooling/staffing are not likely to be going down any time soon.