The great data reckoning is upon us, and the first signs of it have been trickling out of the tech industry for the last few years, namely Google. A company that once offered unlimited photo backups, accounts that you could keep forever, and 15GB of storage for each of those accounts, it's pretty clear that things aren't the same as they used to be in the 2000s and 2010s. Is this a problem only for Google, or are we running out of cloud storage?

As it turns out, there's a lot more going on here than just anything specific to Google, but I'd argue that it's a sign of a turning trend where companies will all make the realization that free cloud storage is no longer sustainable. We're not quite on the brink of collapse just yet, but when Google announced the end of free photo backups in Google Photos, it also said that "this change also allows us to keep pace with the growing demand for storage."

Storage got cheaper, but not much cheaper

Storage prices plateaued in the late 2010s

From the period of the 1950s to the 2020s, storage prices have dropped significantly when measured as cost per terabyte. The above graph shows it pretty clearly, but I've also compiled a table to demonstrate how much prices have dropped since their initial highest points. I have removed the most extreme outliers, as for example, HDDs were originally $3.79 quadrillion per terabyte before dropping to $603.28 trillion per terabyte two years later.

Obviously, storage was very expensive in the 1950s and 1960s, so I also compiled the data from the year 2010 to get a better idea of how pronounced the decrease in price has been, in comparison. Even from 2000 to 2023, the drop is pretty significant, and most of the decrease in costs came in the 2010s.

You may be asking yourself why a decrease in price so drastic made it so that the practices of the 2000s were unsustainable. After all, Google was giving free storage to people at a time when HDDs cost $41.33 (2012) per terabyte, but nowadays, they cost $10.62 per terabyte. That's a decrease of roughly 75%, right? However, in 2017, Google announced that it had 800 million daily users of Drive, and in 2018, that number reached a billion. To put that in perspective, it had about 10 million users in its first few months. Oh, and nowadays, Google has two billion monthly users of Drive.

Let's compare the prices then, the prices now, and the cost of storage for all of those users. Google has offered 15GB of storage for free per Google user since the launch of Drive, For 10 million users, that's an allocation of 150 petabytes, and in 2012 that would have cost about $6.2 million. Even accounting for the decrease in price per terabyte of HDD storage, the two billion users that Google is said to be serving on Google Drive would need an allocation of 30,000 petabytes, costing the company upwards of $318 million.

Of course, that's just hard drive costs too. That's not talking about data centers, maintenance, staff, power, cooling, and more. Storage costs have been coming down, but the hidden costs coupled with the ridiculous growth Drive has faced in the last decade really suggest that Google is struggling. While not every account uses its full 15GB allocation (and I'd wager that most accounts on the platform barely even touch it at all), these numbers still scale in a worrying manner for Google. Worrying enough that you can understand why the free benefits have been coming to an end.

From the outside looking in, Google is seemingly the first to crack, but Microsoft is getting there, too. Not only has the company been pouring a lot of money into researching other storage methods (including DNA), but the company has also experimented with underwater data centers several times in the past. The clock is ticking for the future of data centers, and it's very likely that we'll see alternatives start to pour in eventually, with companies taking away more and more free benefits as time goes on.

Data centers are a political issue, too

How do you build something nobody wants?

Data centers are a politically divisive issue, especially with rising energy costs and pressure mounting against tech companies across the globe. As an example, here in Ireland, we have 82 currently active data centers with many more on the way, These data centers consume a lot of water for cooling and a significant amount of power, and in Ireland, data centers used 21% of our total metered electricity in 2023.

Of course, data centers are global beasts, and many countries have dozens, hundreds, and sometimes thousands of them. Data centers in the US are expected to use 8% of the power grid by 2030, which is significantly below the 21% measured in Ireland. Still, that's not a small number. Ireland's data centers used the same amount of power in 2023 as the entirety of the Isle of Man used in 2018.

Data centers are important, but opposition is growing, particularly in countries like Ireland where a rising cost of living, including energy prices, can push people into poverty. Even if you can argue that the tax take from data centers can in turn be used to reinvest in infrastructure and renewable energy, and contribute to a long-term goal of bringing energy costs down, it's a hard pill to swallow when things are bad now. There's already a risk of data centers pulling out of Ireland because of that opposition, which leads us back to where we began.

No data centers means no storage

And therefore, we run out of storage

If data centers are becoming harder to deploy, how can companies continue to offer the same storage benefits they once could? With a growing population that relies on the internet but a decrease in the supply of data centers, storage is going to become harder and harder to offer. That's why Google is taking steps to clear the path forward now, rather than needing to scramble in the future to find a solution.

I don't think we're running out of storage in a conventional sense. Storage is still available, and people are still uploading a huge number of videos to YouTube every single day. However, we're running out enough to say that companies are clearly starting to hit the brakes and with good reason. We're running out of cloud storage that we can just give away for free, and the cloud storage was deemed surplus to requirements. Now, there is no surplus to requirements, it's all necessary and Google is trying to claw as much of it back as possible.

To answer the overall question, it's a "yes but no" situation. It's not a problem just yet, but the steps being taken that make it feel that way are to curb the potential for problems in the future. If you want to have long-term, reliable cloud storage, you can build your own solutions.