Cloud Storage Still Needs Maturation

Cloud storage may be all the rage, but as cloud solutions take flight, there’s turbulence: Dropbox recently experienced a security mishap that raised questions about the efficacy and safety of leaving important data in the cloud. Rival Box.net has stepped up its game by securing another $125 million in funding, up from the $35 million last year. But what’s all this really saying about cloud storage?

Cloud storage is the future, but it’s also still immature.

A little more than a year after Dropbox’s infamous security authentication mishap, the cloud syncing software company met another untimely security problem after an employee’s Dropbox account password was stolen, and a project document with Dropbox e-mail accounts was leaked to spammers. To mitigate these security issues in the future, Dropbox will implement a two-part authentication process where a user can leverage special codes sent to their phones to ensure secure log-in. Dropbox will also enhance its malicious activity detection capabilities and provide a more transparent view of all account activity.

It’s not as though Dropbox takes security lightly: The company offers more secure solutions – they just cost a bit more. Dropbox for Teams can support a large number of users with an expanded range of security features and administrative capabilities that are tied into Active Directory. But Dropbox might do itself a favor by creating value in the middle ground by offering a smaller enterprise/SMB solution that is (comparatively) less costly, while drawing attention to some of its more high-priced, high-level security features.

Dropbox also has an image problem. On first blush, it’s seen as a consumer-centric product. Dropbox for Teams may want to evolve into Dropbox for Enterprise. Pioneers of cloud storage are uniquely qualified to make this push, and it would do much to improve Dropbox’s wider industry image.

Box.net has done exactly this. In an effort to mature its services and focus on the enterprise, Box.net’s newly acquired $125 million will fuel “continued technology innovation” with social, mobile and professional services technology to “define the next generation of enterprise software.” Lofty words, but Box.net is on the right track by refining its enterprise offerings and attacking enterprises’ key pain points. As it stands, many enterprises prefer the comfort and security of a private cloud solution – or at the very least, a hybrid solution. If Box.net can reasonably assure users of up-time, security and usability, the only real barrier-to-entry is connectivity itself.

And this is why cloud storage is the future – but not quite the present. Although all the pieces are falling into place, there needs to be high-quality connectivity (see: Google Fiber) and high-quality solutions to truly make the cloud a less nebulous and more concrete (i.e. mature) resource. That said, early adopters are in for a treat: All the benefits of cloud-based solutions are readily available; the only question now is how long companies can hold out.

Will the risks of cloud storage outpace the business risks of not adopting cloud storage? Or will all risks of cloud storage need to be outweighed by the benefits for platforms like Box.net and Dropbox to truly become post-children for the cloud storage world? These answers aren’t easy, but will become more clear the closer we get to 2013.

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