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Last week, Google introduced its would-be “Dropbox killer” cloud storage service, focusing on fairly aggressive pricing and integration with both its own and third-party services. Google Drive joins a crowded field that’s polarizing between consumer and corporate offerings, even as all the corporate entrants latch on to BYOD and consumerized IT trends as entry points into enterprise collaboration. Google is big enough to try to service both customer bases, but its lack of focus leaves a lot of room for competitors to differentiate.
What it means
Although Google might seem late to cloud storage, we’re still at the early stages of market development. According to our GigaOM Pro 1Q12 consumer survey, only 8 percent of online adults regularly use such services. Likewise, a GigaOM Pro survey of business executives conducted in the fall of 2011 showed that e-mail is still the primary means of sharing business content both within and outside of organizations, with web-based storage services used internally by 27 percent of the survey base and externally by 19 percent. There’s plenty of room for competition and differentiation.
Google is positioning Drive equally for consumers and consumerized enterprise collaboration via its application integration – Google Play for consumers and the Google Docs collection for company functions. Google Play is off to an inauspicious start, with music and books going nowhere and mobile apps and games – which don’t need personal storage anyway – potentially fragmenting. Google Docs is gaining traction in basic business collaboration through file sharing. But Gmail integration is oddly absent from this release. Google is fleshing out an API and developer kit for Drive, and offers some nice features like easy faxing through third party apps.
Don’t focus on price per gigabyte or how much free storage each competitor offers. Even the startups can match current price points. This won’t be battle of sheer storage scale unless a competitor offers near infinite capacity for free. Similarly, a diversity of mobile and desktop OS support is only table stakes. (Google Drive lacks an iOS app.) Consumer cloud storage differentiation will depend on easy to use, seamless synchronization and bundling storage with existing content and media offerings. Google looks weak relative to Apple and Amazon here. The suppliers aiming to power connected work will differentiate via integration with existing collaboration and content management applications, premium customer service, and suites of features geared to specific business functions or vertical markets.
Whom it affects
Dropbox is the most familiar name in the space. It recently added easy-to-use sharing technologies and photo and video support, and responded to Google pricing. Its offerings for corporate collaboration are thin, though its brand recognition and installed base may be enough to fuel a robust third-party ecosystem.
Box is farther along than Dropbox on incorporating support for enterprise features and integrating with existing applications and directory services. Box may rely a little too much on APIs for integration, but it has shown it will build out connectors to enterprise applications like Salesforce and NetSuite as necessary.
Apple has aimed iCloud solely at consumers to-date, and offers industry-leading synchronization features in support of music, video, e-mail and consumer contacts. As usual, Apple plays by its own rules and favors synchronization over cloud storage, but that hasn’t proven to be a limitation yet.
Microsoft is rolling out features for its consumer-oriented SkyDrive service and may at some point connect some dots with SharePoint and its enterprise cloud services. Microsoft might be smart – rather than slow – to distinguish between consumer and enterprise/small business offerings.
Others in the cloud storage space – including Egnyte, Syncplicity, YouSendIt, SugarSync, Citrix and Amazon – should also pick their battles.
Consumer adoption was a side-door entrance into enterprise collaboration for the early players in cloud storage. That won’t work anymore; differentiation will come from integration, premium services and suites of features.
Disclosure: YouSendIt is backed by Alloy Ventures, which also backs GigaOmni Media, the parent company of GigaOM Pro and GigaOM.