Microsoft is giving away cloud storage to lure users away from Box, Dropbox and Google

Key Points
  • Microsoft has previously given away free licenses to get companies to switch to its server virtualization technology.
  • The promotion comes a month after reports that Dropbox has filed confidentially to go public.
Microsoft CEO Satya Nadella at a company event in San Francisco in 2014.
Source: Microsoft

Microsoft is trying to lure users of cloud services from Box, Dropbox and Alphabet's Google Drive by giving them its competitive product for free.

On Tuesday, Microsoft said users of those three file sync and sharing services can switch to OneDrive for Business without paying anything until their current contract expires. Microsoft is only running the offer for the next five months, according to a blog post from Ron Markezich, a corporate vice president.

The promotion is further proof of Microsoft's commitment to building its Office 365 lineup of cloud productivity services, including OneDrive for Business. Organizations are only eligible if they're not already OneDrive for Business or Office 365 customers, and if deployments will reach at least 500 users, Markezich wrote.

Microsoft's offer comes a month after reports that Dropbox has filed confidentially to go public. And last week, Alphabet announced that G Suite, which includes Google Drive, has 4 million paying customers. More than 350,000 organizations currently have OneDrive, Markezich wrote.

Commercial subscriptions to Office 365 represent a key portion of Microsoft's commercial cloud, which generated $5.3 billion in revenue in the latest quarter, up 56 percent from the prior year. Continuing growth of Office 365 commercial revenue was assumed in a recent prediction by Evercore ISI analysts that Microsoft could reach a $1 trillion market cap by 2020.

It's not the first time Microsoft has given away technology to attract business. In 2016 the company said it would hand out free licenses to its Windows Server operating system for companies that would commit to switching from VMware to Microsoft's Hyper-V server virtualization technology.