One inescapable reality I think is that online storage should really take off this year.
I am already a big user and advocate of Dropbox. Basically Dropbox synchronizes a folder on my hard drive with on line storage. Anytime I change or add a file to the folder (or a sub folder of it), the file moves up to the Cloud. I can get the file from another computer, share folders with others, and see past versions of the file. It is in one tool, storage, backup, synchronization, and sharing.
So far the free 2 gigs it comes with is very useful, but it also comes with 50 and 100 gigabyte options for $10 and $20 a month respectively.
Services like Carbonite and Mozy let you backup your files automatically to the Cloud for about $5 a month.
The cheapest route is still to buy your own drives, but you have to worry about backing them up and plan for them to fail and worry about them being stolen. Plus, setting up local storage so you can access it from your phone or other PC's can be challenging.
S3 is an affordable, reliable, managed storage facility. It can be used directly by end-users or via applications that make use of it.
Google announced last week they would be extending the amount of storage you can buy for your Google Docs and e-mail to share. The big change is that you will soon be able to upload files to Google Docs that are not compatible files (like Doc or XLS files), simply to store them.
The cost will only be 25 cents US per gigabyte per year.
That is very aggressive pricing. Dropbox is $1.98 a gigabyte a year.
S3 is $1.80 per gigabyte per year plus 10 cents per gigabyte transferred (although transfer is free until June 30th 201).
It'll be interesting to see what Amazon does in response to Google's price move.
There is still a trust issue. All it will take for online storage to fall flat, is one major security breach, or for a major storage company to discontinue its service without adequate time and tools for customers to move their data.