Comparisons & alternatives · Cloud storage and online-only files
Should I buy more iCloud storage or an external SSD for my Mac?
Short answer: Choose iCloud for photos and documents you want on every device; choose an external SSD for large local things like video, VMs and apps. Storage Studio moves big folders and apps to the SSD with a link left in place.
It depends on what you're storing and how you work — many people end up with both.
A bigger iCloud plan suits photos and documents you want on every Apple device, backed by Apple and reachable anywhere with an internet connection. Files you haven't used lately can be kept online-only, so your Mac holds placeholders.
An external SSD suits large, local things: video projects, virtual machines, developer data, big app libraries and the apps themselves. It's a one-off purchase, works with no internet, and opens files at full speed — but only while it's plugged in.
Storage Studio is built around the second option: it moves big folders and apps to the drive and leaves a link so they still open from the same place. It also helps with the first — keeping iCloud Drive files online-only to free space. See iCloud & iCloud Photos.