skydrive Microsoft has upgraded Windows Live Skydrive, its service offering free online file storage. You now can store up to 5Gb of documents, pictures and other files, using an intuitive interface – even a convenient tool for dragging and dropping files from your computer into the online folders. Here’s the announcement of increased storage space in the new release.

At the moment there’s no option to get still more storage space but everyone expects a “premium” service soon offering more space for a subscription fee. There are three other minor issues:

  1. The maximum size of each uploaded file is 50Mb. No videos!
  2. You can’t drag and drop an entire folder with a single click. You can drop a group of individual files, but not folders and subfolders.
  3. Skydrive does not integrate with your mail program. You can send an e-mail link to files in your Skydrive folders but your mail program won’t automatically store a file attachment in an outgoing message on Skydrive like the YouSendIt plugin for Outlook does.

Like most of the new Microsoft services, Microsoft has built Skydrive on its Windows LiveID authentication system. Don’t be intimidated! It’s just an e-mail address and a password! You’ll need to sign in with a free Windows Live ID, and other people will need a Windows Live ID to retrieve a file that you share with them.

Here’s what I wrote about Skydrive when it started beta testing. The design is really compelling in its simplicity – I’ve come to prefer Skydrive over some of the other services I’ve tested.

In particular, I’ve spent a fair amount of time testing AOL’s XDrive service, which also offers 5Gb of free storage space. (Here’s some comments about XDrive.) Uploads and downloads have frequently been absurdly slow and the interface is clunky.

Today XDrive introduced a new bit of software based on technology from Adobe that was rolled out Monday morning with great fanfare. Adobe AIR allows programs to run on your computer that are completely linked to online services without being confined to the borders of Internet Explorer. That sounds trivial but developers are happy to get more flexibility in program design. The XDrive software looks pretty good but that won’t matter if they haven’t improved the transfer speeds.