The amount of free storage Google offers with its products is fairly generous, but it's about to get a lot less so. The company is combining the storage allowances for Drive and Picasa and slashing the overall total, as well changing the way it calculates the amount of storage you get if you pay for upgrades.
Google announced the changes in one of its regular "spring cleaning" posts about changing and retired products. Here's the full statement:
Google storage in Picasa and Drive will be consolidated over the next few months, so users will have five GB of free storage across both services. If you’re paying for storage, your free storage will now be counted towards your total. So if you buy a 100GB plan, it will give you 100GB of total storage instead of adding to what you already had. We believe this approach will make it much easier for users. For both free and paid storage, people at or near their current storage limits will have the same amount of storage after this change.
So how will this work? If you were to sign up for a new Google account right now, you would get 10GB of Gmail storage, 5GB of storage in Google Drive for documents and 1GB of storage in Picasa. If you want more storage, you could pay $2.49 a month, get an additional 25GB of storage for Picasa and Drive (that's a total of 31GB) and have your Gmail storage space upgraded to 25GB.
After the change, the free account will still have 10GB of Gmail, but only 5GB of storage across Google Drive and Picasa (rather than 6GB as currently). If you chose the $US2.49 a month upgrade, you'd have 25GB of Gmail, and 25GB across Drive and Picasa (rather than 31GB).
For reference, this is the full range of storage upgrade plans Google will offer once the change comes into effect:
5GB of documents and photos for free is still a generous amount, many users will have more than that anyway because of past upgrades and offers , and the remark about "people at or near their current storage limits" suggests there will be some flexibility in the process. Also bear in mind that new documents you create using Google Docs in Drive don't count towards your storage total, so it can take a long time to even approach the limit -- hi-res photos in Picasa are a much bigger risk in this respect. In Picasa, pictures under 800 by 800 are free, and that rises to 2048 by 2048 if you upload via Google+.
Given that there's no fixed date for the switch, if you've been contemplating signing up for extra storage, now might be a sensible time to do it. Alternatively, you might want to start storing some data with other services such as Skydrive, Flickr or Dropbox. And remember: free stuff is great, but no company is obligated to offer it.
More spring cleaning [Official Google Blog]