The link I keep posting in conversations like this is the one where we wrote about the antagonistic relationship that "free", almost free, and flat-rate service providers enter you into:
It's different with dropbox, though, since their pricing (beyond the free 2GB) is not flat rate ... you really do pay more the more you use ...
Although I suppose that if the range is 10-200 GB, and you're paying $9 (or whatever) there is a pretty strong incentive to keep you as close to the bottom of that range as possible - and you can bank on their policies and system behaviors to reflect that incentive.
But the real worry with dropbox is just the unsustainable business model. It was illustrated so well with the backblaze-costco-drivearound-silliness - storage really costs something, and it's price sensitive enough that you'll drive around all week ripping desktop drives out of USB enclosures ... and if you're giving that away in a bubble 1.0 "anything for customers" model you should be worried.
Consider doing the math on how many paid users need to exist to subsidize each free user. Suppose each free user uses, say, 20% of their space and does every single available promotion, yielding 20GB of space. This means each free user uses 4GB (a huge overestimate, I suspect.) This means that given S3 storage rates (and if Dropbox doesn't have better than the public rates, they're doing it wrong), each free user costs Dropbox $0.22 per month. Let's say that each paid user uses half their space, and that all the users are only using the 100GB plans. Then paid users cost them $2.75 per month. This also assumes that absolutely no data is deduped.
Now, let's assume that Dropbox pockets a quarter of the money to pay salary, other business overhead, and so on. This means that Dropbox needs a conversion rate of about 4% to be profitable. Sounds completely reasonable and sustainable to me, especially given how generous my storage numbers are.
http://blog.kozubik.com/john_kozubik/2009/11/flat-rate-stora...
It's different with dropbox, though, since their pricing (beyond the free 2GB) is not flat rate ... you really do pay more the more you use ...
Although I suppose that if the range is 10-200 GB, and you're paying $9 (or whatever) there is a pretty strong incentive to keep you as close to the bottom of that range as possible - and you can bank on their policies and system behaviors to reflect that incentive.
But the real worry with dropbox is just the unsustainable business model. It was illustrated so well with the backblaze-costco-drivearound-silliness - storage really costs something, and it's price sensitive enough that you'll drive around all week ripping desktop drives out of USB enclosures ... and if you're giving that away in a bubble 1.0 "anything for customers" model you should be worried.