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I don't think amount of free space is a great competitive advantage. If that is the case Sugarsync should be at least 2x bigger than Dropbox (since they are give 2x more free space than Dropbox).

I believe amount of free space only become competitive advantage after services have the same service quality as competition and the same level of integration with applications using the cloud storage (editing, collaboration, project management, photo sharing, etc.).

As of now Dropbox has way more applications supporting it than SkyDrive so it seems Dropbox is still ahead.