Google Drive to Disrupt Box.net, Dropbox

It’s not here yet, but it’s coming any day now.

Google Drive is lurking somewhere in the depths of the Internet, waiting to pounce on users and woo them away from whatever storage and file synchronization service they’ve been using. When Google Drive launches, it will also likely be part of the Google Apps catalog, directly affecting the storage solutions that SMBs and enterprises use and channel partners sell. So what happens to all those similar storage solutions when Google shows up and eats their lunch?

It’s not an easy question to answer – we don’t know real details about Google Drive. But let’s assume Google Drive, like its competitors, will be free with a limited amount of data. Lets also assume this amount will be substantially larger than its competitors. Tack on premium services, and now we have a problem: Companies like Dropbox and Box.net cannot necessarily compete with that level of ‘free,’ and they certainly can’t compete with Google’s brand recognition and inevitable omnipresence.

First, let’s look at Box.net, which has a small-but-growing channel program limited to resellers and developers. Solution providers can either resell their storage cloud or develop integrated software for it. That, in and of itself, is limited. Box.net garnered $81 million in development funds from a smattering of investors last October, making the company the Grand Poobah of the cloud file-sync world.

We’re looking at an innovate-or-die scenario. For developers, it will be about what technologies they can integrate with. Hint: It needs to be all of them. For resellers, it’s more than selling the cloud, it’s about getting value out of the sale itself. What good is selling a chunk of storage if there’s nothing else attached? For example, data analytics bundled with the cloud chunk could help VARs help customer with upgrades or new purchases. Some of these key differentiators will have to unfold if Box.net wants compete with the onslaught of Google Apps resellers.

Companies like Dropbox have a different problem. Although it offers premium services, like Dropbox for Teams, there is no channel. That’s OK – Dropbox has a loyal user base thanks to its ubiquity across iOS and Android apps, plus the super easy drag-and-drop interface for Mac, PC and Linux. It isn’t above Google to create something similar, putting pressure on Dropbox to avoid irrelevancy.

A likely consequence of Google Drive is Dropbox turning to  the channel. To fuel that channel, Dropbox could lean on its existing legion of users. Dropbox has recently launched a program allowing its users to refer enough friends to get an extra 16GB of storage for free. That’s a considerable jump from the free 2GB and a doubling of the original limit, which was 8GB. It’s a small step, but it won’t completely outmaneuver Google. Dropbox must appeal to its existing user base in a way that’s relevant to the company itself, and in way that keeps Dropbox offerings distinctly different from what Google Drive has. That could mean promising faster file uploads, making file sharing easier, or offering truly differentiating levels of security and encryption. Not everyone loves Google, and not everyone will want to put everything in Google’s hands. In this situation, Dropbox may have an edge.

But still, the real big question: What becomes of the data industry if Google makes an ungodly amount of storage completely free? Move on. Get a jump on Google by separating the data from the storage process. Make the process invisible, make it ubiquitous, and make it easy to use. If you’re thinking about cloud storage to use the product, you’re doing it wrong. Like Apple’s iCloud, the cloud should work for you, not the other way around. If backup and storage of files can be automatic and near-instant, local or cloud data becomes irrelevant. At that point, all that matters is whether you can access your data on the device of your choosing. It won’t matter where the data is, so long as it’s secure and always with you.

The data storage paradigm of the future will be one where “storage space” is irrelevant and connectivity is king.

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