When Windows Live SkyDrive first launched in 2007 (known as Windows Live Folders beta back then), it offered a mere 500 MB of free storage. Later on when the service got out of beta in early 2008, this free storage space increased from 500 MB to 5 GB. This doesn’t seem to be a lot today, but it was probably sufficient for most people back then (and hey, that’s still more than what Google Docs+Picasa offers for free today). In November 2008, together with the launch of Windows Live Wave 3, SkyDrive’s free storage space increased from 5 GB to the 25 GB it offers today.

This storage space hasn’t changed since then, but the usage of SkyDrive has been increasing ever since. Office Web Apps was added to SkyDrive (with Office 2010 integration), and the service also became the storage space for large Hotmail file attachments. With the introduction of Windows Phone last year, SkyDrive also became the single point of storage for all synchronised photos and Office document from the phone. We expect SkyDrive usage to skyrocket once it adds support for other devices such as Windows, iOS, Mac, and Android, and the current storage limit definitely won’t meet the needs of Microsoft’s “all in with the cloud” plan.

So in order to satisfy the demands of the “cloud” generation, Microsoft needs to move forward, particularly in terms of cloud storage space. LiveSide recently learnt that Microsoft will soon offer unlimited photos and Office documents storage on SkyDrive Wave 5, and this is how it will work:

Unlimited storage space for all Office documents

Unlimited storage space for all photos

25 GB of free storage for everything else

No specific details are revealed as to when this will be made available, but as usual we believe this will be “coming soon”. Remember though, providing unlimited storage for SkyDrive’s 70 million users is not an easy task, and it takes time for Microsoft to get it ready for the masses. However, we hope Microsoft do move fast, given Google’s “GDrive” might be making a comeback, and other competitors like Dropbox are growing at a rapid pace.

There’s lots more news to come relating to SkyDrive and Windows Live. But in the mean time, remember to also check out our previous SkyDrive Wave 5 coverage: