Redmond is getting aggressive with marketing moves to woo consumers to its Office 365 subscription, the Web-based version of its productivity software that includes Office, PowerPoint and Excel.

Microsoft is now offering a full terabyte (TB) of storage space on its OneDrive, a free personal cloud storage service that people can use to store photos, videos and documents, to consumers who sign up for monthly Office 365 subscriptions. Redmond announced in April it was providing 1TB of OneDrive storage to its Office 365 Business customers.

This incentive follows the March roll out of Microsoft Office 365 Personal, which was the lowest-ever pricing on the service. You can tap into the online productivity software for as little as $6.99 a month. But Microsoft just sweetened the deal with a massive storage upgrade that could turn the heads of Office 365 fence-sitters.

Omar Shahine, a Group Program Manager at, broke it down this way in a recent blog post: For Office 365 Home, which runs $9.99 a month you’ll get 1TB of storage per person for up to five people. With Office 365 Personal ($6.99 a month) and University ($79.99 for four years) you will get 1TB per subscription.

Tapping Into Synergies

Is this about driving Office 365 subscriptions or OneDrive subscriptions? It may be a little bit of both as Redmond seeks synergy between its cloud-based products. Microsoft relaunched the OneDrive service, formerly known as SkyDrive, in February.

Better than its predecessor, OneDrive offers new features, like improved video sharing and newly updated apps for Windows Phone, iOS, Android and Xbox. The new monthly prices will be $1.99 for 100GB (previously $7.49) and $3.99 for 200GB (previously $11.49).

“Our data tells us that three out of four people have less than 15GB of files stored on their PC,” Shahine said. “Factoring in what they may also have stored on other devices, we believe providing 15GB for free right out of the gate -- with no hoops to jump through -- will make it much easier for people to have their documents, videos, and photos available in one place.”

More Storage for Less Money

We caught up with Wes Miller, an analyst at Directions on Microsoft, to get his take on the OneDrive upgrade for Office 365 users. He told us it’s interesting that Microsoft is upgrading online storage in the consumer offering to a level that reaches parity with the business offering -- but he’s not sure this upgrade will drive new subscriptions in and of itself.

“I do think that if you are a heavy user of OneDrive to begin with and you were already paying for online storage, this could push you over the edge,” Miller said. “You may decide you should stop paying for OneDrive and start paying for Office 365 subscription because you’ll get way more storage for less money.”

All of the updates Shahine outlined will take effect in the next month. Current subscribers will automatically be moved to the lower prices.