![]() The actual file storage is set to the side and Dropbox gains converts by being incredibly easy to use and to understand. It strikes me that for all of these customers, raw storage will become a commodity on top of which layers of extra functionality will be built.įor consumers it's all about ease of use and simplicity - the very reason that Dropxbox has gained massive market share at the lower end of town. The red customers are the largest enterprises who have strict requirements around enterprise process and compliance. Yellow customers are larger organizations who are happy to have a copy of the data in the cloud but want the certainty of their primary data access coming from on-premises storage. Green are the small consumer or SMB customers who he sees having fairly simple file sharing needs and primarily using the public cloud. When describing the market space for file sharing and synchronization, he uses the metaphor of the traffic light. It's a situation I discussed late last year with Vineet Jain, the CEO of Egnyte. Everyone else in the space can beat the little guys on price - which is why people are starting to realize that niche customer sectors, specific functionality or strong ties to an ecosystem are where the value really lies - witness Egnyte (who recently raised around $30M) targeting enterprises with a "cloud or on-premises, the choice is yours" story, or Box with it's vast ecosystem of third party integrations, or DropBox who, while not yet cracking the enterprise market, has undoubtedly cornered the small and mid-sized business sector for file synch and sharing. They're storing ever-increasing amounts of digital stuff for free - and that's fine if you're an existing large player or a new entrant scaling rapidly, but not so great if you're a small startup. With the high profile vendors (Microsoft, Google, Apple) pushing customers to their cloud backup services, and the larger disruptors such as Dropbox gaining widespread usage, there is no feasible opportunity for smaller vendors to differentiate based on the price (or lack of price) for their service. What's going on here, and what does it mean for the future of the plethora of vendors trying to compete in the space? The fact is that simple file sharing is rapidly becoming a commoditized service - users have gown far too accustomed to the idea of simple storage being free. ![]()
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