It is an interesting time in consumer cloud storage. In 2011 it seemed that Dropbox was on an unstoppable roll, and was going to become *the* one and only consumer cloud service. They announced 50M user accounts, and seemed to be outpacing the competition by leaps and bounds. The consumer cloud war was won, and Dropbox was the billion dollar darling.
Fast forward five years, and things have gotten interesting. Simply put, the cloud is dis-aggregating (and that is a good thing). Namely:
- Dropbox has shifted focus to enterprise
- The big boys have come to play
- “The cloud” is not a single app, instead a set of service offerings
Dropbox shifts focus to the enterprise
Let’s make one thing clear: Dropbox is not going away from the consumer cloud space. But they are no longer in a winner-take-all situation, either. They have proven it is hard to “go it alone” in consumer cloud… to build a fundamentally stable and profitable business with simply a stand alone “Freemium” siloed cloud offering. In order to justify a $10B+ valuation, their focus has shifted to the Enterprise.
Even their own COO complained that they haven’t innovated and app development has stagnated. Yes, Dropbox is still a strong player, but they are just one of many options for users to choose from. In fact, often times users aren’t “choosing” at all, instead using multiple cloud services simultaneously. This is good for competition and good for the end user.
The big boys have come to play
Google, Apple, and Microsoft have all made significant (and interesting) moves with their consumer cloud offerings. Long gone are the days of 3rd-party integrations with the likes of Dropbox or Box, instead they see the strategic value and are doing it themselves. “Unlimited” photos, uniform cross-platform experiences, and a more natively integrated cloud offering are becoming the trends.
There is a war for customer data, and the device manufacturers, network operators, and ISVs all want to own it. There is one thing in common here: for these companies the cloud is a piece of their strategy for both customer acquisition and retention. In all cases the cloud is used as a “loyalty card”; ensuring users come back again and again to buy more computers, more phones, more software.
“The cloud” is not a single app, instead a set of service offerings
Wikipedia lists 57 players in the consumer cloud sync and backup space. While not all of these are household names, many are finding their niche by targeting one specific user benefit and perfectly solving the problem: security, backup, share, or photos, for example.
What’s perhaps even more interesting is how many companies offer cloud storage only as a feature of a greater user experience. Almost every service has a cloud storage component, and often times the end user may not even consider it.
Take my mother for instance, who recently asked me how she can get “on the cloud”, although she is already using iCloud Photo Sharing almost daily. Facebook, Instagram, Basecamp, flickr, Evernote, even Walgreens Photo have cloud storage capability built in. Indeed “the cloud” is becoming a set of service offerings, not a single application silo.
All in all, it is becoming clear that the consumer cloud storage industry is dis-aggregating. What looked like a ten billion dollar war that was won in 2011 has become a multi-hundred billion dollar war that is just beginning.