Microsoft recently decreased free storage on OneDrive from 15GB to 5GB due to cost reasons. It also discontinued unlimited OneDrive storage for Office 365 subscribers.

1. Investigate the reasons for these OneDrive changes. How does OneDrive pricing compare to Dropbox and Google Drive before and after this change?

2. Microsoft has at the same time introduced offers of free OneDrive storage for 2 years for users who sign up to Bing Rewards. What are the advantages and disadvantages of replacing a more generous free tier with these types of promotions?

3. Compare the direct and indirect network effects that Dropbox, Google Drive and OneDrive enjoy. In particular, consider the fact that Google owns Google Apps and Microsoft owns Office 635? Which company should have the strongest incentives to take network effects into account?