It might not be its main business, but cloud storage is something Microsoft takes very seriously, and lately, it seems like the company takes great pleasure in getting under the skin of its competitors. This past summer, the company followed-up Google's decision to offer 1TB for 10 bucks a month with the same kind of plan, and afterwards, many questioned what Dropbox's next move would be. Well, it took just two months to find out - Dropbox would also be offering a 1TB plan for $10 a month.
I'd like to think at that point, Google and Dropbox hoped Microsoft would chill for a while, but Redmond was having none of it. Just last Monday, the company announced that it'd be offering unlimited storage to its Office 365 subscribers for the same $10/mo. What makes that deal even more noteworthy is that it's not only cloud storage you get - you also get access to the full standard Office suite. Remember when Microsoft wanted to charge you $150 a year for that alone via Office upgrades?
When Microsoft announced its latest deal last week, I half-expected Google or Dropbox to follow-up with another update to its own plans, and while that might still happen in the future, it's not for the moment. Interestingly, though, Dropbox isn't upset at Microsoft's constant one-upping of its cloud offerings, despite that being Dropbox's sole focus. Instead, the company has just announced a partnership with Microsoft that will see each scratch the other's back - get ready to see Office references in Dropbox, and Dropbox references in Office.
In the near-future, Dropbox will update its mobile apps (Web later) to effectively link Office documents to Microsoft's Office apps - that means that when you click to edit a file in Dropbox, it will open in the respective Office app. Microsoft's Office apps, meanwhile, will gain the ability to save and open documents from a user's Dropbox account.
Ultimately, it seems that Microsoft is going to be the bigger beneficiary here, because as part of this agreement, Dropbox will finally develop an app for Windows Phone. It seems clear to me that Dropbox understands the sheer intensity that is the threat of Microsoft and Google - companies in a better position to offer people (and companies) ridiculous amounts of storage, and at least on the Microsoft side, an entire office suite on top. Therefore, a partnership like this one with Microsoft could prove very important in the long-run, and perhaps we'll even see it expand at some point.
Microsoft is weakening. Not so long ago, it would just have bought dropbox.