Cloud Infrastructure

10:06 AM
Connect Directly
Twitter
LinkedIn
Google+
RSS
E-Mail
50%
50%

Storage Wars: Attack Of The Clones

Don't let clone storage services fool you into thinking they are battle-worthy. Choose one that will survive the market war at hand.

In the same year that production will begin on a new Star Wars movie, a different type of battle will rage in a cloud far, far away. 2014 is set to be a landmark year for the file storage and sharing industry. With Box and Dropbox rumored to go public -- both with valuations in the billions -- services that help people store and share digital files will be big news over the coming months.

This kind of frothy market has a Gold Rush feel to it. Everyone is buying pickaxes and heading west. Even battery manufacturer Duracell is staking a claim with Duracell Cloud Storage. An industry analyst recently told me that there are more than 70 different cloud-based file services, though I think this number actually underestimates the real size of the bandwagon.

Let's be honest. The world doesn't need that many ways to store files, especially when so many services are mere clones with nothing unique to offer users other than logos in a different shade of blue. While high fives and popping corks may greet successful public listings, 2014 will also witness the more sobering silence of many of these also-rans going out of existence. 

We've already seen the first sign that challenging times are ahead, with some providers moving away from the freemium model of offering a free basic service as a gateway to premium plans. Almost all of the existing file storage and sharing services operate on a similar model, but most don't have the fast growth rates or existing scale for it to be sustainable. Time is running out.

What a lot of these players really need is money to fund the expensive business of continuous innovation. But in a space where everyone sees dollar signs, the lack of follow-on funding for the smaller players is notable. Investors have obviously decided that if an existing business hasn't ramped up fast enough by this stage, it's unlikely to survive the competitive shakeup to come. Most of the new money entering the market is either going to the biggest fish or coming from other businesses that fancy a piece of the pie.

The outcome of the battle for file sharing supremacy isn't just some cloud-based soap opera playing out for our entertainment. We all have skin in the game. If you store and share files online, especially for professional purposes, you need to know that the provider you've trusted with your data will be around by the time the new Star Wars movie hits theaters in December 2015. 

A recent IDC competitive analysis of the file-sharing vendor landscape showed that the current market leaders all serve massive user bases with distinct needs and have strong brands and reputations that will enable further growth. As each has recently benefited from large new investments, it's hard to look beyond these businesses as the eventual big winners.

Being able to focus exclusively on file services is a real advantage, enabling such vendors to commit to ensuring a consistently high-quality product. A number of the other main competitors are part of larger organizations, so their fates aren't essential to the existence of the parent company. As the competition heats up in 2014 and continues with calls for more investment, these huge corporations could easily decide to deemphasize these balance-sheet rounding errors.

As the smoke clears from the battlefield, the pure plays will stand alongside a smattering of smaller providers. I do expect one or two brands more famous for other services to emerge and be successful, though I'd back companies with some connections to digital services, like hardware manufacturers, over more left-field entrants.

For the rest of the clones, it will be time to sign off for good. Even after the inevitable consolidation, the survivors will need to keep innovating. Providing more than just a storage repository is the key to continued success.

The first part of the Storage Wars sets the scene but (much like The Empire Strikes Back) the saga only becomes interesting in the sequel, when more valuable features like sharing and search are added to the storage layer. Only those providers that help users do more with the files they store will have the Force with them.

Eric is Hightail's SVP of business development, corporate development, and international, leading Hightail's development charge with his unique ability to successfully connect businesses, people, and things. Thistalent first became apparent when he began applying his ... View Full Bio
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
ericvanm
50%
50%
ericvanm,
User Rank: Apprentice
3/18/2014 | 7:30:26 PM
Re: There is room for innovation as storage becomes commoditized
Completely agree. That's why Hightail puts a lot of energy into working with the most popular business apps such as Outlook, SharePoint and Salesforce.  Allowing professions to stay within their existing workflows is critical.
danielcawrey
50%
50%
danielcawrey,
User Rank: Apprentice
3/10/2014 | 6:54:14 PM
Re: There is room for innovation as storage becomes commoditized
Duracell has a cloud service? That's how you know that the market is saturated. 

Look, the players who will win this battle are the ones that are best integrated with other services. Google Drive is and example. Same goes for Microsoft OneDrive. Box keeps growing and raising money - my guess is that its API plugs nicely into other services. Other than these companies, however, what is the value play?
Xtrant
100%
0%
Xtrant,
User Rank: Apprentice
3/10/2014 | 5:22:43 PM
There is room for innovation as storage becomes commoditized
At Xtrant.com we've created a cloud-based project and collaboration platform–a way for people to use the habits and protocols they are familiar with in the social sphere to get things done, we call it "Productive Sharing" as opposed to social sharing.

And even though storage is part of our offering, we aren't in the storage business, we're in the productive sharing business - our value lies in the experience of Xtrant and the effeciencies it creates.  Storage comes with the territory; it's the price of admission.

Since storage itself has become so commoditized and inexpensive, and there are so many options for storage, from Google Drive to DropBox and Box.net, we've decided to associate what we do bext, our experiential value, with the paid use of the product.  We are updating our plans to offer unlimited storage to our paid subscribers, as charging for a commodity is joining a race to the bottom. 

In fact, secure storage is one of the lowest costs Xtrant incurrs - and we will ultimately incorporate those other services into our product - so our customers can link their dropbox, etc. to their Xtrant account. And of course, our free accounts (yes, we are also a "Freemium" product) still have storage limits (though we do give students with a .EDU address a full 1GB storage for free.)

In storage, yes you are probably right - but in user experience there is a lot of room for differentiation, and ultimately different businesses and different professionals have different tastes, or there wouldn't be a need for so many different automobile brands - hey, they all have four wheels, yes?  (Or as I'm fond of saying, just becuase Ford was making cars, it didn't stop the Dodge brothers, or Ferdinand Porsche from entering the market.)
Hot Topics
15
3 Signs You're Overspending On Data Storage
John Morris, President and CEO, Cleversafe,  7/24/2014
4
Where Is Your Cloud?
Andrew Froehlich, President & Lead Network Architect, West Gate Networks,  7/23/2014
4
Fall IT Events: On The Road Again With 10 Top Picks
James M. Connolly, Editor in Chief, The Enterprise Cloud Site,  7/29/2014
White Papers
Register for Network Computing Newsletters
Cartoon
Current Issue
2014 Private Cloud Survey
2014 Private Cloud Survey
Respondents are on a roll: 53% brought their private clouds from concept to production in less than one year, and 60% ­extend their clouds across multiple datacenters. But expertise is scarce, with 51% saying acquiring skilled employees is a roadblock.
Video
Slideshows
Twitter Feed