Microsoft raised the roof on its OneDrive storage this week. The new OneDrive capacities are still limited, but for most Office 365 users, the new OneDrive plans basically amount to unlimited online storage.

In April, Microsoft increased the OneDrive limit for Office 365 business accounts from 20 GB to 1 TB. Now, Microsoft is providing that same 1 TB of online OneDrive storage for all Office 365 accounts. Office 365 Personal and Office 365 University accounts will each receive 1 TB of OneDrive storage. Office 365 Home accounts will get a separate 1 TB of OneDrive storage for each of the five users on the account.

In a post on the OneDrive Blog, Microsoft explained the move to provide more storage. “With OneDrive, we want to give you one place for all of your stuff: your photos, videos, documents, and other files. Of course, to do this, we need to make sure you actually have enough storage space for everything, particularly given that the amount of content everyone has is growing by leaps and bounds.”

However, storage (in general) is fairly cheap. You can buy 3 TB of external storage for your PC from Amazon for $100. While most cloud storage providers — Microsoft included — continue to define limits, cloud storage capacity is evolving in much the same way as cellular calling minutes. In the very near future, the capacity will cease to be a differentiating factor in choosing a cloud storage provider, and unlimited storage will simply be the de facto standard.

Microsoft isn’t there yet, but it understands that the future of online storage will be about more than how many gigabytes of data you can put there. “The landscape is changing to the point that we believe it’s no longer enough to provide only cloud storage — that’s table stakes. We want to provide a complete experience that brings in the power of Office and lets you do more with everything you put in your OneDrive — whether it’s sharing your favorite photos with the people you care about in one simple click or working together in real time on an important project.”

For all intents and purposes, 1 TB is unlimited for almost all users. There are certainly exceptions to that rule — users with 2 TB, 3 TB, or even more data to store. The reality, though, is that bumping Office 365 OneDrive storage to 1 TB is essentially the same thing as saying it’s “unlimited.”

The free OneDrive account storage was also bumped to what Microsoft considers to be somewhat unlimited for most users. Microsoft raised the capacity for OneDrive from 7 GB to 15 GB — matching the rival Google Drive limits. Microsoft says that its research indicates that three out of four users have less than 15 GB of personal files on their PC, so it believes that the new 15 GB limit will accommodate the needs of the vast majority of users.

With 1 TB of OneDrive storage, users can store everything they have in the cloud and have virtually ubiquitous access to open, edit, or share data from anywhere. Microsoft has changed the game so Office 365 users can stop discriminating about which files or data deserve to occupy the cloud and which should remain local.

Do you think this storage increase is significant, or does Microsoft need set the bar higher to remain relevant? Share your thoughts in the discussion thread below.