G is for growth
Storage is an important part of email, but that doesn't mean you should have to worry about it. To celebrate our one-year birthday, we're giving everyone one more gigabyte. But why stop the party there? Our plan is to continue growing your storage beyond 2 gigabytes by giving you more space as we are able.
Two gigabytes? Are they mad?
History suggests they are not. So how can they give this amount of storage for free? Let's start by considering what it must be costing them.
Most users are going to take a long time to build up that much archived mail, for example I just looked at my thunderbird mail repository containing my saved mail going back over a decade, it's only 200 megabytes, and Google would be mad if they aren't compressing their mail storage. Naively zipping up my mail reduces it to 60 Megs. Compression varies and images in popular formats like jpegs and mpegs don't compress well, so not many people are going to get compression like that, but the 2 gigabytes is somewhere between 2 gigabytes and 600 megabytes; probably closer to the 600 megabytes end. Most users won't use anything like their 2 gigabytes limit for a few years, so let's say that the average use is going to be around 1 gigabytes or 400 megabytes once compressed.
At current disk prices that works out at about 50c worth of disk per user. OK, they need backup media, and computers, and will have some other hardware costs, so lets say that doubles the requirements, bringing it to $1 per user. With their adsense technology it isn't going to take them very long to pay that dollar off from paid clicks. Obviously there's running costs as well, electricity, maintenance on their servers, etc, but no more than for any other web hosting business, and I'll bet they buy internet bandwidth at bargain basement prices.