Files in the cloud: Feature, product or company?
a number of months ago, Bill Gurley wrote a post about Benchmark’s investment in Dropbox , and why Dropbox’s cloud-based file synchronization is a massive disruptor. Many disagreed, quoting Steve Jobs’ assertion that file sync is a feature, not a product. As a feature, the idea was that it’d be folded into the architecture of the larger players, after they came to market with a comparable offering.
Enter the giants.
The bigger players have arrived. Microsoft recently gave SkyDrive a significant overhaul , and Google brought out its long-awaited Drive . Apple had already launched the iCloud product. It’s no accident that three of the world’s strongest technology companies have entered this market in tandem. It speaks to the significance of cloud storage, and implies that the theoretical discussion about what might happen will quickly collapse to the fact of what does happen.
ScaleVP is an early investor in Box , the leader in cloud-based enterprise file sharing. No surprise then that I trust Bill Gurley, but i might frame the discussion more broadly. File synchronization and file sharing are both “just” features, but they’re features of an emerging architecture for PCs, tablets, and smartphones, one where files are stored within the cloud, accessible across all devices and cached locally as needed.
This is a shift from the device computing architecture that has persisted because the Apple I, throughout the entire PC era and into the early years of smartphones. That this shift has now been endorsed and embraced by the 3 companies who collectively set the direction of the technology industry is very large validation. It implies that this modification goes to happen.
For startups like Box and Dropbox, it is a big deal. The common risk early on inside the lifetime of a startup is, “will this alteration even happen?” That risk is behind us. Now, the difficulty is whether or not they ultimately become features, products or companies?
Feature, product and company
i think that the reply for the startups during this space is all three: they’ll become a feature, product and corporate. To get any traction in software today that you need to start with a feature – an atomic unit of pleasure. It’s a must to solve one problem superbly. From that time of view, being labeled a feature is really a compliment, because it means you’ve got made something drop dead simple to adopt.
Dropbox made it so easy for anyone user to sync files across multiple devices. Box made it incredibly simple for businesses to share files and collaborate in a structured manner. You could call these mere features, but they were features that folks really wanted, and that they were valuable enough to motivate millions of users to alter behavior and move their files to the cloud.
A startup with that traction has earned the correct to parlay . Now, it may build a product around that feature. Dropbox and Box are doing that at the moment. The goods they’re building are next-generation file systems for the cloud, Dropbox coming from consumer roots, and Box from an enterprise perspective with a focal point on collaboration. A file system is not very a feature, this is a big deal product, and successful file systems have built successful multi-billion dollar companies prior to now, reminiscent of Microsoft, Novell and Network Appliance.
The file system descriptor seriously isn’t perfect, because traditional file systems have tended to be invisible to users, bundled in a tool OS or a network OS. These new products thrive on visibility because ease-of-use and real application level functionality has been the drivers of mass adoption, however the technology that powers consumer sync or enterprise collaboration is ultimately in keeping with managing the storage of, and access to, files within the cloud. So calling it a next generation cloud-based file system is an efficient enough description for now.
Competing with giants
0 0 Google, Microsoft and Apple won’t just roll over and die. They are going to compete hard, using tight technical integration with their existing products and monetary bundling to drive adoption. If here’s just another feature war, this strategy will work.
If it’s an architecture shift, and the chance is indeed for an independent cloud-based file system, the old guard’s strategy, with the inevitable “installed base” driven trade-offs, will fail. The trade-offs will cripple the functionality of the offerings in a market where the suitable product stands out as the one which is file type agnostic and takes good thing about what a cloud based architecture can offer.
Two giant markets: Consumer and enterprise
i’ve been talking about this as one market, nonetheless it is de facto two. And it’ll have two winners. a client file system based around sync is extremely different from an enterprise file system based around sharing. Many of the comments around “sync is a feature” are driven by people’s familiarity with the purposes of end users, and absence of familiarity about what enterprise IT needs.
Consumers require platform 2 integration to Facebook 2 , Twitter and other consumer apps or even products (TV, Xbox) while enterprises require 3 platform level integrations to directory systems 3 , security systems and legacy applications. Both are hard problems and both require a platform play with huge scale. But they’re very different.
In the subsequent ten years, consumers and businesses will move much in their file storage to the cloud and within the process create multi-billion-dollar software markets for cloud-based file systems. Everyone has files. For this reason, the cloud-based file system opportunity is a giant prize, possibly the most important prize in cloud computing.
For the business market alone, at an estimated $50 per user per year, with 200 million knowledge workers worldwide. It is a $10 billion annual market. My gut is that it’ll be won by those companies that solve the difficulty holistically, in preference to simply bundle it in as a feature. The features are already becoming products, and these products will give rise to a few pretty important companies in a single of the foremost meaningful markets of this technology era.
Rory O’Driscoll (@roryodriscoll) is a managing director with 4 Scale Venture Partners 4 , where he invests in mobile, Internet, and enterprise software companies. He’s a board member and investor in Box. You’ll find more from Rory via his 5 blog 5 .
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