Hello SkyDrive, goodbye Dropbox

Microsoft has caused a bit of a stir this week for two reasons. The first is because it has reduced the free space you get on SkyDrive from 25Gb to 7Gb and the second is the brilliantly simple app that actually makes SkyDrive useful for once.

SkyDrive, of course, is the free online storage space that you get with a Windows Live Mail or Hotmail email account. Your Microsoft ID - a Hotmail email address and password - gets you into the service and you can store any files you like online.

Up until this week you had 25Gb of storage space for free, but now you only get 7Gb. Apparently 99% of users were using less than 7Gb anyway, so it won't affect the vast majority of people. I've had SkyDrive since it launched and have been a Hotmail user since, well, forever - the 1990s I think. So how much space was I using? Less than a gigabyte.

It is hardly surprising that 99% of SkyDrive users are under 7Gb. There's a chart somewhere on a Microsoft blog and it shows that a large number of people are probably using less than 2Gb. That's because it was so hard to use before. You had to upload and download files through a web browser and to make matters worse, there was a small file size limit. You couldn't store large files like videos, backups, and so on. It was tedious to upload more than a handful of small files.

The new 7Gb limit is actually quite generous when you compare the amount of free space you get with other online storage services and it should be more than enough for most people. A bonus for long-time users like me is a free upgrade to 25Gb of storage. Log on to Hotmail, click SkyDrive and follow the instructions. A couple of clicks and you're back up to 25Gb of free space.

I expected it to be a time-limited offer because Those few people that are using more than 7Gb need time to either download their files or upgrade to more storage with a paid account and SkyDrive can't simply delete all files over the new limit. I didn't see any messages about it being time limited though. Maybe I've got 25Gb forever. That would be nice.

The second change this week is the release of Windows and Mac apps that integrate SkyDrive into the desktop. SkyDrive is now a folder on your disk drive. It works just like Dropbox and the question is whether it will hurt Dropbox's business. It may not and it may simply take away people that are using Dropbox for free. You get 2Gb of free storage space with Dropbox, but 7Gb with Microsoft. It's a no brainer. At least for Windows and Mac users - at the moment there isn't a Linux version.

I've only been using the apps a day, but they look good and have worked perfectly so far, just like Dropbox only with more space. Microsoft might therefore pinch some of Dropbox's freeloaders who want online storage space, but don't want to pay for it. That's just good news for Dropbox because supporting lots of people that don't pay is just a cost. If Dropbox can match Microsoft's prices for those people that need large amounts of online storage space then it might not affect Dropbox's business at all.

I've been using Dropbox for years and it has been great. I've almost reached the storage limit for my free account and have been thinking about a paid account for more space. Now that Microsoft has entered the market I'm thinking about switching though.

Dropbox has been too good to abandon straight away for an untested service, so I'm running both SkyDrive and Dropbox apps on my Windows PC and Mac for the moment. At some point I'll choose one or the other. I'm leaning a bit towards Microsoft because it is likely to be an essential part of Windows 8, but it's irritating that I'll only be able to access it through a web browser in Linux.