Having followed the online storage business for quite a few years, I have become increasingly convinced that many of the startups will have to retweak their focus and find new opportunities to stay relevant and stay in business.
Aaron Levie, CEO and founder of Palo Alto, Calif.-based startup Box.net, agrees. He has decided to pivot his company away from the consumer and instead focus on business users. “We are going to be less about storing music and photos and more about focusing on storage for collaboration,” he said in an interview. As we had pointed out earlier, an ad-supported online storage model isn’t for the faint of the heart. Several, including AOL’s XDrive and Yahoo’s (s YHOO) Briefcase, have shutdown.
Using storage as a hub for collaboration is something Levie and I had discussed in August 2008. We were both in agreement that swapping emails with big attachments wasn’t quite efficient. Still, it would be hard to beat email’s ease of use unless online collaboration was dead simple. Since then, Levie’s team has been quietly building on that idea and has come up with an easy way to collaborate.
The new Box.net is optimized for the business users and easy collaboration between work groups. In the new layout, instead of folders and files, you see people sharing those same files. You can easily see the latest activity on the folder, showing which files were most recently edited, commented or discussed.
The new user interface looks like a cross between Facebook’s News Feed and 37Signals’ Backpack. Box.net had previously made its storage service compatible with various other web services, such as Zoho and Scribd. This makes viewing and editing documents quite easy.
Box.net says it has about 50,000 business users, but will those be enough to keep the company from being crushed by big gorillas (currently) in the mist? Microsoft (s MSFT), EMC (s EMC), and Cisco Systems (s CSCO) are all going after the storage-collaboration market. A few days ago, rumors surfaced about Google’s GDrive, another competitor to tiny Box.net. (Related post: Why Google needs the GDrive to fight Microsoft.)
With such big opponents, things look tough for the tiny Box.net. There’s one thing its competitors haven’t got, though — Levie. By the time they wield their clumsy clubs, he’ll probably have figured out a way to outrun them.