To whom it may concern,
I do not consider myself an oracle or a fortune teller, but I like to think that my last 22 years in Silicon Valley has made me more adept at navigating the future of the technology space and uncovering trends. Last year I predicted that companies with scale would control storage pricing and shove the sector into a race to the bottom. Fast forward to the present day; Amazon, Google, and Microsoft have thrown their weight around to do just that — offering unlimited storage as a part of their solution, which essentially renders cloud storage free.
Now, one year later, I am writing this letter to make another prediction: Enterprise file sync and share (EFSS) as a standalone solution will disappear in the next two years.
While Gartner created the EFSS category just two years ago, this space is at an inflection point that will force the vendors to make drastic changes or disappear all together. EFSS was created when implementing file sharing, storage, and sync was a time-, effort-, and resource-intensive effort and hence, moving capital expenditures to operating expenditures was the driving force. This was a time where the cloud was seen as the best possible solution, a panacea for complex file infrastructure if you will. As a result cloud-only, turnkey solutions were developed and rolled out to both consumers and businesses.
This was a good start but had fundamental flaws. While the focus was to make things easier for users, solutions veered toward being too simplistic. However, the reality is that a company’s file infrastructure involves serving variety of use cases that cloud-only solutions simply cannot support — security and privacy issues with data, problems of scale (lots of files), large files, and performance expectations. As time has progressed, vendors have learned that there is a significant amount of customer data that should not be in the cloud, which is now making on-premises storage all the more valuable and relevant. Other than for archival purposes, interacting with terabytes or even petabytes of data in the cloud is simply not viable.
Unlike consumer needs, enterprise needs cannot be satisfied by a one-size-fits-all approach. Providers must be seen either as a platform or as a core piece of infrastructure. The enterprise needs flexibility, security, and control, which are achieved by providing value-added services on top of the simple file sync and share solutions that were initially created. These services include collaboration, data management, and data protection.
Microsoft and Google are already playing this game. Microsoft is capitalizing on the ubiquity of Office to build a three-pronged strategy around making business processes more efficient, incorporating an “intelligent cloud platform” and “creating more personal computing.” Google aims to replace Office products with its own Google Docs, while pitting Google Drive against Dropbox, which itself grew into a main player based on ease of use and widespread adoption.
With all of that being said, the bloom is off the rose for the EFSS category. We are two years since the inception of the EFSS category, and we are now within two years of its demise.
Early entrants to this space like SugarSync and YouSendIt (Hightail) have all but disappeared. Even storage powerhouse EMC decided to sell control of its Syncplicity unit to Skyview Capital.
There is a new realization for enterprise customers, and they are pausing to regroup and rethink their strategy. They are assessing strengths and weaknesses, looking for one solution that can provide a platform to answer all of their needs — functionality, openness, security, and control. This is why I refer to our present time period as “halftime.”
There is still time to find a way to win if you can grow beyond the confines of file sync and share.
Regards,
Vineet Jain
