CLOUD File Storage – Business Model Evolution

Using Cloud File Storage services for data is actually very similar to using a bank to store money.  You take something of real and personal value to you (i.e. your data / your money) and you entrust it for safe-keeping to an outside party.

But then you may wonder – what history does this organization have to warrant the level of trust I am going to extend to it?  Very often it is the history of how the vendor came into being that helps you decide whether or not to trust them.  The world of Cloud File Storage has followed basically 2 evolutionary paths in the development of these offerings – the question becomes which one is right for you and helps make you feel most comfortable?

Evolution Path 1 –  Feature > Product > Company

Cloud Storage startup companies such as Box (.Net), Dropbox and SugarSync where founded by individuals that had a vision for a specific computing FEATURE – the ability to easily store data files in the cloud.  Along with one key capability – to make the data in those files available to any number of computing devices.  And do it without concern for worrying about management of the copy/paste/transfer process needed to keep data current between all of the devices (i.e. Desktop, Laptop, Pad/Tablet, Smart Phone etc.) that they might be accessed by.

In the case of these startups – a desire for a feature triggered origination of a product, and desire to commercialize / monetize that product offering required creating a company. All of which happened in a relatively short period of a few years.

Evolution Path 2 -  Company > Feature > Product

This past spring, 3 of today’s largest existing tech COMPANIES (Apple, Google, Microsoft – each having a longevity measured in decades) have actively promoted their respective Cloud File Storage offerings.    Each company has actually offered variations of a cloud storage feature for years either directly or indirectly.  Developing cloud storage solutions was necessary to effectively support their wide array of mainline product offerings and services.

Today their cloud storage feature has evolved into formally marketed “synchronized file storage” products.  The offerings carry the full branding of the Company’s name and reputation.  Given each of these companies have had to establish extremely robust, fault-tolerant and extensive storage systems to maintain the reputation of their mainline products – suggests that they “really know how to do Cloud storage”.

Picking a Bank (or File Storage) to use for your business

The banking world also has “startup, long established and special purpose” banks.  Some focus on consumer/personal banking, others focus specifically on business banking and then some specialize in unique sectors.  They all compete to have you as a customer and ultimately all do the same thing (act as a repository for your money).  But how they do it can vary a lot:  what additional and/or optional services they offer, what degree of process and procedure they follow, what types of over-site and governance they are controlled by and what the overall cost of doing business with them might be.

The point is, when entrusting items of value into the hands of a third party we each decide based on the attributes most important to us.  Some people may say, all banks are the same, it doesn’t matter which one you use.  Yet the fact is they can and do vary significantly, and that may well impact on how effectively they match your needs.

Selecting a Cloud File Storage vendor is a similar situation.  If you’re going to entrust an outside party to hold important and valuable assets (your data) appropriate consideration should go into deciding which vendor suits your overall needs (i.e. think beyond just topics of convenience).

Remember no government entity oversees Cloud Storage providers in the manner that the Federal Reserve and FDIC oversee banks.  Verify if you are using a vendor that follows routine audits and other “best practices” to help assure your data is as safe as they say it is.  Also, clearly read the TOS (Terms of Service) agreement, it could keep you from having a big surprise down the road.