Amazon today unveiled a new storage service called Amazon Cloud Drive that gives you 5 GB of free online storage space to store your documents, photos, music and other files securely in the cloud. All you need is a free Amazon.com account to upload your files which you can then access from anywhere using a web browser.

Amazon Cloud Drive is purely an online file storage solution and the only client that you can use to upload or download files from your Cloud Drive account is your web browser.

Thus, for example, if you plan to copy your entire My Documents folder from the computer to Amazon’s cloud, you’ll have to upload files manually from the browser, one by one. Or, to save time, you could zip the entire folder into a single file and upload it in one go as Cloud Drive supports files as large as 2 GB in size. (Dropbox has a file size limit of 300 MB).

Amazon offers a handy desktop client that will scan your hard drive for music related files and will automatically put them to Cloud Drive – you then listen to your music from anywhere using the browser itself without having to download anything to that computer. Other than that, I think the Cloud Drive service is also good for manually backing up some of your really bulky files online – like those Outlook PSTs.

Pricing - Amazon Cloud Drive vs Amazon S3

Amazon S3 vs Amazon Cloud Drive

There’s however one part about Cloud Drive that has surprised me a bit – the pricing structure. The service internally uses Amazon S3 for storage but if you compare the storage cost of these two services, you’ll find that Amazon S3 is nearly 80% more expensive than Cloud Drive.

Amazon charges 14 ¢ per month per GB for S3 which converts to around $1.78 per year (including the 10 ¢ data transfer fee) while Cloud Drive is available for a flat $1 per GB per year with no transfer-in or transfer-out fees. S3 is one of the popular choices for online backup but going forward, Cloud Drive could be a more cost-efficient option.

Bonus Tip – Upgrade to 20 GB for less than $1

All Amazon Cloud Drive users get 5 GB of free online storage space or you can pay $20 to upgrade to the 20 GB plan.

There’s another option as well. Amazon will upgrade your storage to 20 GB if you buy any MP3 Album from them. Now there are quite a few music albums on Amazon.com that are available for less than $1 – buy any one and you’ll be upgraded to 20 GB.

The only downside is that while Cloud Drive is available to everyone worldwide, Amazon’s music store is only for residents of the United States with a U.S. billing address.