Some blogs are calling the recent price wars between cloud providers “a race to zero”. But this is the wrong way to think about it. As technology progresses, we simply need to start thinking in terms of larger units.

Here is a table of historical Amazon S3 prices:

Date	$/GB/Month	$/TB/Month
14-Mar-06	0.15	150
1-Nov-08	0.15	150
1-Nov-10	0.14	140
1-Feb-12	0.125	125
1-Dec-12	0.095	95
1-Feb-14	0.085	85
1-Apr-14	0.03	30

In terms of gigabytes the prices seem to be approaching zero. But in terms of terabytes, the prices are just barely starting to become reasonable. The linear projection below suggests that we will be using terabytes as our unit of choice when speaking of cloud storage until 2020 and later, when prices will start going below $1 per terabyte per month.

Some time after 2020, perhaps around 2025, we will start speaking in terms of petabytes per month.