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Cloud Storage: Will Storage Eventually Be Free?
The cloud data storage market, both public and private, is currently on the order of $13.57 billion in 2014, growing at a compound annual rate of 33.1 percent, and on target to exceed $57 billion in market size by 2019, according to a survey by MarketsandMarkets. The report breaks down the cloud storage market into the categories of cloud storage gateways, backup and recovery, data movement and access, data replication, archiving, security and storage resource management, and professional services.
But while as many as 90 percent of internet users are consumers of cloud-based applications, the use of cloud storage apps, like Dropbox and Google Drive, is still at a comparatively much lower percent. Cloud storage is an area that is expected to significantly grow in the near future.
Some see cloud storage as becoming a commodity and eventually becoming a freebie where cloud providers make money from selling software, not storage. Aaron Levie, Box founder, told the Mercury News that “we knew the cost of storage would eventually decline or drop to zero.”
Vineet Jain, co-founder and CEO of Egnyte, said that “right now there is a huge arms race between Apple, Google, Microsoft, and now Amazon has thrown their hat in the ring. These four guys are capable of making it free or nearly free, and the price points that you’re seeing from these vendors such as Box will have to come down, or they will have a shrinking user base. You cannot out-compete Microsoft and Google on price — you just can’t.”
Mark Peters, senior analyst at Enterprise Strategy Group, told the Enterprise Storage Forum that “Box is often referred to as a storage company, but it is really a SaaS company that happens to have storage. The value is in the application – streamlining sharing and collaboration across the knowledge worker ecosystem of collaborators and devices. The more people (and therefore data) you get into your ecosystem, the stickier this scenario becomes for the provider – because there might now be a commensurate increase in enterprise licensing fees to balance the increased demand for ‘free’ storage, and for the users – because migration costs become painful… So free storage is good for the provider as it compels usage, and can lead to an inability to go elsewhere, even if the ‘free’ starts to cost sometimes.”
