The promise of unlimited online file storage appears to be appealing to business customers. Google Drive for Work, which launched in June at the Google I/O developer conference, is attracting enterprise clients at a rate of 1,800 per week, the company plans to announce on Thursday.
The price of storage has finally become cheap enough that Google can offer unlimited storage and still have a business model, said Scott Johnston, director of product management for Google Drive, in a phone interview. "There's no asterisk there," he said. "It's not, 'call us when you run out.'"
Unlimited storage is limited by other factors: Who has unlimited bandwidth, unlimited files, or unlimited time? But perhaps its most salient limitation is that cloud storage companies have limited funding. Although Google might have found a business model that allows it to offer business customers unlimited storage for $10 a month, it's not clear whether early entrants into the cloud storage market can manage that feat.
[Warning: Google wants your bodily fluids. Read Google Moonshot Project: Healthy Bodies.]
Box and Dropbox, among others, are trying, each offering unlimited storage, too. But the major platform players -- Apple, Amazon, Google, and Microsoft -- have all turned their attention toward improving their cloud storage services, leaving other vendors with a differentiation and pricing challenge.
Henry Baltazar, an analyst with Forrester, contends the cloud storage business model involves creating opportunities to sell related services. Amazon, Google, and Microsoft, he said in a phone interview, "don't have much intention to make money on storage. Storage is just a means to get to other revenue streams."
Endless storage might attract attention, but Johnston says Google has been focused on the aspects of cloud storage that matter to business customers. Google Drive launched two years ago following the company's standard playbook, Johnston said, "focusing on consumers because businesses are just collections of consumers."
By targeting the consumer market first, Google can achieve a level of scale that provides important lessons for the company about what's working and what isn't, Johnston said.
The scale of Google Drive as measured in active users amounts to 190 million, according to Johnston, who adds that Drive was available 99.985% of the time in 2013. That's less than 90 minutes of downtime last year.
To make Google Drive for Work ready for business use, Johnston says Google focused on three areas. The first involves eliminating as much work for the administrator as possible and removing limits on the end user. "When people have to think about whether they can put something in the cloud, they typically don't," he said.
Google's second area of focus has been providing visibility and control in the move to the cloud. That's meant providing administrators with synchronization control, audit logs, and reporting, so it's clear where content is and how it's being shared, said Johnston. Google's engineers also implemented an API to allow companies and integration partners to create custom services, such as alerts when documents with specific keywords are moved. Customization is critical to businesses because businesses have different needs.
Third, Google has tried to address cloud security concerns, not an easy task given the damage done to the cloud computing industry by the documents leaked by Edward Snowden last year. As a consequence of the revelations in those documents, the Information Technology and Innovation Institute, a technology think tank, last year projected that US cloud service suppliers could lose $22 billion to $35 billion in business to European competitors in the next three years.
Google and its peers have been pushing for broader use of encryption to counter the impression that the cloud is simply a convenient way for government intelligence services to view people's files. Johnston says Google Drive files are encrypted in transit between Google data centers, between user devices and Google data centers, and at rest on Google servers. Although this is not as secure as customer-controlled encryption keys, Johnston insists only a minority of businesses express interest in controlling their own encryption keys. "Typically, that isn't a concern," said Johnston. "There's also a tradeoff in... how much value we can provide in terms of content discovery [when the customer controls the encryption keys]."
Or as Baltazar put it, "The rule is if you own the data, you own the customer."
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