Update 1/12/10: Google enables loading and storing files to Google Docs without conversion. See Ways to Use that Storage below.

Google just reduced its storage fees by a factor of eight, or as they say “Twice the storage for a quarter of the price.” Announced on Nov 10, 2009, this effects both Gmail and Picasa Web Albums (including Blogger photos).

This is amazing and interesting news. When was the last time you saw the cost of something go down, never mind by nearly an order of magnitude?

You can get up to a stunning 16TB – that’s a nearly unthinkable amount of Pictures, Video, and Mail.

This space is available across those applications, above the amount Google offers free as standard storage (which can’t be shared across apps – but additional space can be):

• Picasa Web Albums (including 'All photos posted to Blogger'): 1 GB
• Gmail: 7+ GB (and increasing)
• Docs: 1 GB (as of 1/12/10)

A Great Value
“While storage costs have been dropping naturally, we've also been working hard to improve our infrastructure to reduce costs even further.” The price works out to flat $0.25 per GB (withno volume discount rates). Google notes that “1 TB equals 1024 GB” so I’m pleased to see they are using the computer-centric Binary standards, and not the SI/Metric standards that the hard drive industry insists on using. Google would be more correct to use the GiB acronym but essentially no one is.

A quick review of dealnews.com internal hard drives shows a current Hitachi 2 TB for $145, which is $0.0725/GB (or $0.0797/GiB to be in the same terms as Google). Of course, that cost is only for a year, while a purchased drive would commonly come with a 3 year warranty. The difference in price between the raw storage and the service includes the servers, storage controllers, backups, data center, installation, maintenance, etc. The critical difference here is backups – like most home users, you’re not doing them, and if you were to, one of the easiest ways is a backup drive which doubles your cost. With 3 TB drives around the corner there’s almost no other reasonable backup method.

Ways to Use that Storage
Besides uploading and sharing all your pictures and videos, and saving all your emails (and even importing them from other online and local email applications), you may want to consider the following.

Update 1/12/10: Upload and store your files in the cloud with Google Docs.  Within Google Docs you can now choose to deselect "Convert documents, spreadsheets & presentations to Google Docs format" and upload. While unconverted files are not editable online they can be up to 250GB in size; converted files have much lower limit depending on type. Uploade files can be placed in folders, many types previewed, downloaded, shared, and seemingly those which are previewable can also be searched inside.  The Google Enterprise blog has a post on using the file cloud with third-party apps.

Note that these are, for the most part, Gmail hacks, and who knows when their use might be suspended by Google:

• Extend your local hard drive file system to your gmail: gDisk (OS X), Gmail Drive (Windows), GMailFS (Linux), Gspace (Windows, Linux, OS X). Since these depend on local apps, I wouldn’t treat them as “remote access-anywhere” storage.
• Send To Gmail (Windows) "One click backup of any file to your gmail account.")
• Gmail Music (any OS that supports Python 2.4+) store and play MP3s.
• There are also rumors Google will offer direct file access to online storage.

Important note: Now that Gmail allows “offline access”, if you're using this feature along with these "Gmail hacks" you’ll want to exclude any of above messages from your offline (local) storage.
 
Pricing:
20 GB ($5.00 USD per year)
80 GB ($20.00 USD per year)
200 GB ($50.00 USD per year)
400 GB ($100.00 USD per year)
1 TB ($256.00 USD per year)
2 TB ($512.00 USD per year)
4 TB ($1,024.00 USD per year)
8 TB ($2,048.00 USD per year)
16 TB ($4,096.00 USD per year)

The 20GB is a new tier and at $5 it’s almost a no brainer especially for those who feel limited by Picasa’s 1GB standard capacity.

Other Google Application Stora Limits:

• Google Docs limits are handled substantially differently for converted files.
• Google Calendar presumably has its own limits, but I can’t find information on this.