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Cloud storage is a rough business, with new competitors coming out of the woodwork on nearly a weekly basis with the lure of even more free space -- which is why SugarSync has decided to pivot in the opposite direction.
SugarSync announced Tuesday that the company plans to abandon its free cloud storage tier to become a "premium service" by adopting a paid-only service model with a limited-time free trial period.
Effective February 8, 2014, SugarSync's previous free 5GB tier will be gone for good, replaced with the option to try the service for 90 days with the same amount of space, or experience the luxury of 60GB free for the first 30 days.
Although existing users will apparently be able to keep their free storage, SugarSync plans to aggressively pursue such customers with the lure of heavily discounted premium subscriptions.
“There are many companies in this space that are giving away free storage, however, most of these companies will not be viable," SugarSync CEO Mike Grossman said in a press release. "We are already in a solid financial position and this shift will further strengthen our business."
Competitors like MediaFire, who recently launched their own desktop sync client software, wasted no time piling onto SugarSync for abandoning its freemium storage model, which VP Brent Bucci says will leave "thousands of users with a clear need for a free storage solution."
"In order for freemium models to work, non-paying users have to be encouraged to act as brand ambassadors," Bucci told Mac|Life via email. "Social sharing on networks such as Facebook and Twitter are critical to user growth.
"While many storage sites such as Dropbox rely on advertising and word of mouth, MediaFire encourages our users to create and share original works through Facebook, Twitter, and email," the VP added. "We supplement our income from free users through serving ads to free users who utilize our network to consume content."
It remains to be seen if SugarSync's decision to abandon free users is the right one, but in the meantime, cloud storage providers such as MediaFire are all too happy to swoop in and offer those customers a safe haven with more than 34 million registered users and the company's MediaFire Desktop software about to cross the one million download threshold.
Follow this article’s author, J.R. Bookwalter on Twitter