It’s mind-blowing to think that storing a terabyte of data once cost tens of billions of dollars. Today, that same amount of storage fits on a consumer flash drive that can cost around $20 on sale (even though MSRP is often closer to $100).

In 1956, IBM introduced the first hard drive: the IBM 305 RAMAC. It offered about 5 megabytes (MB) of storage and carried a cost of roughly $10,000 per megabyte. That put the system cost around $50,000 for just 5 MB of storage.

To calculate the cost of 1 terabyte (TB) of storage in 1956 using this rate:

• 1 TB = 1,024 GB
• 1 GB = 1,024 MB
• 1 TB = 1,048,576 MB

At $10,000 per MB, the cost of 1 TB would have been:

1,048,576 MB × $10,000 per MB = $10,485,760,000 (over 10 billion dollars)

So yes, 1 TB of storage would have cost more than 10 billion dollars in 1956.

By 2020, storage pricing had fallen dramatically due to advances in semiconductor manufacturing, higher density NAND flash, improved controllers, and massive economies of scale across the tech industry.

In 2020, the average cost of storage was roughly $0.02 per gigabyte, which equals $0.00002 per megabyte. Using the same calculation:

• 1 TB = 1,024 GB
• 1 GB = 1,024 MB
• 1 TB = 1,048,576 MB

At $0.00002 per MB, the cost of 1 TB in 2020 would have been:

1,048,576 MB × $0.00002 per MB = $20.97

That means one terabyte of storage dropped from more than 10 billion dollars in 1956 to roughly twenty dollars in 2020. Put simply, storage has become one of the most extreme examples of technological cost collapse in modern history.