Dropbox Inc DBX, an esteemed player in online storage, announced a significant shift in its policy. The company will now limit its storage to 5 terabytes for its top-tier plans, blaming excessive resource use by a minority of users.
This change impacts the company's "all the space you need" plan, Bloomberg cites from the company blog.
Although the company conceived the plan with businesses in mind, some users exploited it for cryptocurrency mining and other unintended uses, leading to storage consumption thousands of times higher than genuine business customers, Dropbox stated.
With a robust clientele exceeding 18 million paid users, Dropbox has built a reputation in cloud storage.
In August, Dropbox reported quarterly earnings of 51 cents per share, which beat the consensus of 45 cents. The company reported quarterly sales of $622.50 million, up by 8.70% year-on-year, which beat the consensus of $613.64 million. Total ARR ended at $2.500 billion, up by 7.2% Y/Y.
Dropbox isn't alone in this. Earlier, Alphabet Inc's GOOG GOOGL Google rebranded its unlimited storage offering, causing a ripple effect in the sector.
Following this, several clients reportedly considered switching to Dropbox. Addressing this, a Google representative mentioned the introduction of "pooled storage" and clarified the language about storage limits.
Under the newly implemented structure, Dropbox will charge users $8 for each additional terabyte, a shift from their previous unlimited plan priced at $24 monthly. Loyal customers using under 35 terabytes can enjoy their existing storage space at unchanged rates for the upcoming five years.
As the digital shift continues, online storage demand surges. According to industry experts at IDC, cloud storage spending is set to soar 25% this year, reaching $59.9 billion and potentially hitting $127.8 billion by 2027.
Other tech giants like Apple Inc AAPL and Amazon.com Inc AMZN have previously adjusted their cloud storage offerings.
Price Action: DBX shares traded lower by 0.48% at $27.11 on the last check Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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