Are data centers running out of storage space? And if so, what does that mean for cloud storage?

The big data reckoning is just around the corner, and the first signs of it have emerged in recent years from the tech industry, particularly Google. For a company that once offered unlimited photo backups, accounts you could keep forever, and 15GB of storage for each of those accounts, it's pretty clear that things are no longer the same as they were in the 2000s and 2010s. Is this just a problem 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 it's a sign of a trend where companies will all realize that free cloud storage is no longer sustainable. We're not quite on the brink of collapse yet, but when Google announced the end of free photo backups in Google Photos, it also said, “This change also allows us to keep up with the growing demand for storage space.”

Storage became cheaper, but not much cheaper

Storage prices plateaued in the late 2010s

Data source: John C. McCallum (2023); US Bureau of Labor Statistics (2024

From the 1950s to the 2020s, storage prices, measured as cost per terabyte, have declined significantly. The chart above shows it pretty clearly, but I've also put together a table to show how much prices have fallen since their initial highs. I removed the most extreme outliers, for example, hard drives originally cost $3.79 trillion per terabyte before dropping to $603.28 trillion per terabyte two years later.

Apparently storage was very expensive in the 1950s and 1960s, so I also compiled the data from 2010 to get a better idea of ​​how steep the price drop compared. Even from 2000 to 2023, the decline is quite significant, and most of the cost decline occurred in the 2010s.

You may be wondering why such a drastic drop in prices has made the practices of the 2000s no longer sustainable. After all, Google provided free storage to its users when hard drives cost $41.33 per terabyte in 2012, but cost $10.62 per terabyte today. That's about a 75% drop, right? However, in 2017, Google announced that it had 800 million daily Drive users, and in 2018 that number reached one billion. To put that in perspective, it had around 10 million users in its first few months. Oh, and these days Google has two billion monthly Drive users.

Let's compare then prices, today's prices and storage costs for all these users. Since the introduction of Drive, Google has offered 15 GB of storage space per Google user for free. With 10 million users, that's an allocation of 150 petabytes, and in 2012 that would have cost about $6.2 million. Even taking into account the reduced price per terabyte of disk storage, the two billion users Google is designed to serve on Google Drive would require an allocation of 30,000 petabytes, which would cost the company over $318 million.

Of course that's just how it is hard drive costs too. This is not about data centers, maintenance, staffing, power, cooling and more. Storage costs have come down, but the hidden costs combined with the ridiculous growth Drive has experienced over the last decade really suggest that Google is struggling. While not every account is using their full 15GB allotment (and I bet most accounts on the platform are barely using it), these numbers are still concerning for Google. Worrying enough that you can understand why the free benefits are phasing out.

From the outside looking in, Google seems to be the first to get there, but Microsoft is also on the way there. Not only has the company invested a lot of money into researching other storage methods (including DNA), but it has also experimented with underwater data centers several times in the past. The clock is ticking on the future of data centers, and it is very likely that alternatives will eventually come to market, taking away more and more free benefits from companies over time.

Data centers are also a political issue

How do you build something no one wants?

Data centers are a politically contentious issue, especially given rising energy costs and increasing pressure on technology companies around the world. For example, here in Ireland we currently have 82 active data centers with many more on the way. These data centers use a lot of water for cooling and a significant amount of electricity, and in Ireland data centers will consume 21% of our total metered electricity in 2023.

Of course, data centers are global monsters, and there are dozens, hundreds and sometimes thousands of them in many countries. Data centers in the US are expected to use 8% of the electricity grid by 2030, well below the 21% recorded in Ireland. Still, that's not a small number. Ireland's data centers used as much electricity in 2023 as the entire Isle of Man did in 2018.

Data centers are important, but resistance is growing, particularly in countries like Ireland, where rising living costs, including energy prices, can push people into poverty. Even if one can argue that tax revenue from data centers can in turn be used to reinvest in infrastructure and renewable energy, contributing to a long-term goal of reducing energy costs, this is a difficult pill to swallow when things are bad Now. This resistance is already at risk of data centers withdrawing from Ireland, which brings us back to where we started.

No data centers means no storage

And that's why we're running out of storage space

As data center deployments become increasingly difficult, how can organizations continue to deliver the same storage benefits they once did? With a growing population reliant on the Internet but fewer data centers available, storage is becoming increasingly difficult to provide. That's why Google is taking steps to pave the way for the future now, rather than having to scramble to find a solution in the future.

I don't think we're running out of storage in the traditional sense. Storage space is still available and people still upload a large number of videos to YouTube every day. However, we are running low enough It can be said that companies are clearly starting to put the brakes on, and for good reason. We are running out of all the cloud storage we can have left give away free and cloud storage was deemed unnecessary. Now there is no excess of requirements, everything is necessary and Google is trying to reclaim as much of it as possible.

To answer the overall question: It’s a “yes but no” situation. It's not a problem yet, but the steps taken to make it seem that way are intended to curb the potential for future problems. If you want to have long-term, reliable cloud storage, you can create your own solutions.