Box.net, Amazon Cloud Drive
The online (or cloud) storage business has always been a really interesting industry. When we started Box in 2005, it was a somewhat untouchable category of technology, perceived to be a commodity service with low margins and little consumer willingness to pay.
All three of these factors remain today, but with dropping storage costs, constantly improving bandwidth and computing performance, and consumers’ ever-growing personal digital libraries, online storage (profitable or otherwise) has become a strategic offering for most large internet and software companies. Google continuously updates its Docs service with upgradeable storage and more features, Apple is rumored to soon announce a free version of MobileMe, and Microsoft has no fewer than five ways to store and manage files in the cloud, including 25GB of free space through Skydrive.
So it makes sense that after five years of providing storage infrastructure for a large population of startups, Amazon has decided to move into the consumer storage category with its Cloud Drive. I can imagine a number of reasons why Amazon did this – with their kindle software and apps marketplace, Amazon is continuing to diversify the kinds of solutions it delivers to customers. To Amazon, pieces of content are the digital equivalent of what they used to sell in the physical world to you: a digital MP3 replaces the CD, a video stream replaces the DVD, and mobile games replace that Xbox game purchase. Why wouldn’t Amazon also help consumers store and manage these digital assets?
But here’s the challenge: it’s not as easy as it looks.
Any storage provider, whether they’ve survived or combusted, will tell you that the business is far more challenging than it might appear. In fact, the term “cloud storage” is a bit of a misnomer – what consumers are really buying (and using) is the application on top of that storage. The nuances to providing a seamless user experience around accessing, sharing, collaborating, streaming, and integrating data is something that not many companies understand. Putting disk drives in the cloud is easy; building a killer product that people will return to, or want to interact with, is anything but.
This is the reason HP so visibly got out of the business with HP Upline two years ago, for instance, and it’s the reason why many other software and hardware providers have closed up their services over the years.
So while it’s great that Amazon is getting into the space, and even better that they’re continuing to push on the market’s expectations with 5G of free storage (something that we announced in November last year), there’s quite a bit of distance between where they are today and a remarkable product. After playing around with the service for a bit, here are a few suggestions:
Work on the user experience – While the core application was intuitive enough (it renders like your local file system), I didn’t find many good ways to get lots of data in the application; it’s unclear if there are any desktop integrations available besides a way to upload your music; and I don’t think the music browsing or playing experience will make iTunes or Spotify worry too much about lost customers.
Let people take their data anywhere – The web needs fewer, not more, silos of information for consumers. Our data is already trapped in online services ranging from Facebook to Apple, and by the looks of it, Amazon Cloud Drive is another one of these traps. Consumers want to work and play from anywhere, and our technology needs to have open APIs and connections to the other services and devices that individuals are using.
Users want to share – As far as I could tell, there’s no ability to actually share the files you’ve uploaded to Amazon Cloud Drive, which basically results in the service being a data dumping ground with limited utility. The power of having your data in the cloud, as opposed to stored locally or on a remote disk, is that you can instantly and easily share with people you trust. Amazon will need to create a compelling experience around sharing your media or content frictionlessly.
That said, it’s quite possible that Amazon’s only motive for launching a cloud drive is to help bridge the content that customers are buying on Amazon with the devices in Amazon’s ecosystem. If Amazon were to, as rumored, get into the tablet category with their own hardware, launching a complementary media storage solution would be a good way to connect their two ecosystems.
While Box doesn’t compete with Amazon’s Cloud Drive – we’re 100% focused on serving enterprises – we welcome more innovation and excitement in the ecosystem. We believe that consumers and information workers alike should be able to get to their information from any device, any software, and any network, at any time.
By Aaron Levie, co-founder and CEO of Box.net
Aaron Winsor Levie is an American entrepreneur.
He is the co-founder and CEO of the enterprise cloud company Box, which as of 2012 is used by more than 11 million individuals and 120,000 businesses worldwide.
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