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Thursday, November 22, 2012

Google Drive And The Cloud Wars

By Aaron Levie

Editor’s note: Aaron Levie is co-founder and CEO at Box.

For the past six years, any startup touching the cloud storage space has lived in anticipation and fear of Google’s (GOOG) entry into the market. G(od) Drive’s arrival was meant to instantly commoditize existing offerings, kill all future opportunity for new players, and leave a charred ecosystem in its wake as it battled Microsoft (MSFT) and Apple (AAPL) for control of our online lives and content. This was seen as all but a forgone conclusion among investors, press, analysts, and even competing startups since 2006 and beyond. And even beyond that.

But the Google Drive never came. Why?

“Sundar had concluded that it was an artifact of the style of computing that Google was about to usher out the door… I don’t think we need files anymore,” Steven Levy writes in his book, In the Plex, referring to Sundar Pichai, head of Google Chrome.

Google was moving towards a world where its cloud operating system would make traditional file systems obsolete. Consumers would create and manage data without ever touching a desktop application again. Before it was ever born, Google Drive was suddenly a thing of the past. A Valley myth.

And with Google Docs, we bought into Google’s vision for reinventing how we create and interact with data. At least many of us in the tech community did. I remember thinking that Google Docs (and Writely before it) would easily take over Microsoft Office as the choice solution for creating and editing new information. How could it not?

But it turns out that lawyers still needed to share detailed, structured documents. Investment bankers wanted to access complex spreadsheets. Doctors had to review medical records. Reality set in that most people still created content using local apps like Photoshop, Autodesk and – gasp! – Microsoft Office. Google’s Chrome and cloud-only view of the world wasn’t supportive of this reality. And while the Mountain View giant stood firm with its vision for the future, users moved on in the present, signing up for file storage and sharing apps from a range of startups and tech leaders.

And now, like all good legends, Google Drive is rumored to be back on the brink of launch. Maybe the competition between Android and iOS – with the latter gaining a competitive edge with iCloud – brought it back from the dead. Or perhaps it was the traction of cloud storage startups to the tune of tens of millions of users. Whatever the reason, Google has been pulled into the market.

An inevitable entry, just delayed

When the Google Drive rumors first started in ‘06, it seemed inevitable that it and others would soon enter the space in a significant way. At Box, we were but a small guppy in waters soon to be populated by sharks with rocket launchers. (See image above.) In short, it wasn’t going to be an easy fight. Even if we were successful in acquiring and attracting consumers, getting wallet-share in a market where the price is driven to zero is immensely difficult. We had to take a different tack.

In talking with our customers, we realized the battle for big business adoption would be played out and won on a completely different set of dimensions: Instead of making decisions based on price, enterprises are utility and time sensitive; instead of being platform-specific (my mom only uses Apple products), enterprises deal with every device imaginable; and, enterprises would need a significantly more thorough set of services that would preclude consumer companies from addressing the market effectively. For these reasons and others, moving into the enterprise was an obvious choice in 2007. That’s when we hit the big red “Pivot” button that’s hidden under every startup CEO’s desk.

We decided to let the other players duke it out in the noisy consumer space, while we’d try and shake things up the quiet and dusty enterprise world. Surprisingly, it’s really only in the past year that Apple, Microsoft and (supposedly) Google have made real moves to enter the market we left behind. And with their frenzied land-grab for the consumer space, they’re driving fragmentation that’s unparalleled to anything we’ve ever seen.

The upcoming fractured cloud

Think about it: If you’re Microsoft, it’s in your best interest to make it frictionless for your customers to move data between as many Windows machines as possible. Apple equally wants to ensure your iPhone, Mac, and Apple TV all communicate synchronously. Google, for its part has long wanted to be the information hub for its customers as it moved beyond its core search vision.

But the efforts of these three players – building up their own vertically integrated technology stacks from the mobile devices to the platforms where you create content to where it’s all stored – are leading us toward a fractured and fragmented ecosystem. And this is not a group of companies that are going to play nicely together.

The world will never again look like it did in the ’90s, when a single vendor in Redmond laid claim to the vast majority of critical software we interacted with and data we produced. Already, less than half of devices connected to the internet are Windows-based. This change is absolutely great for innovation; but when Microsoft had undue control over the software world, there was something arguably soothing (as a consumer) about everything roughly working together. Unlike the traditional desktop environment, where applications were forced to let the local file system broker some level of uniformity, the cloud we’re about to enter is one that will manifest its own platform wars, proprietary approaches, and a disjointed developer and customer ecosystems.

Questions abound. Are there files in the future or not? Do we use Microsoft Office anymore? Are we just in a multi-year transition period before we’re completely cloud? If I store a document in Google, how do I get to it from my Mac? If I store a photo in my iCloud, how do share it with someone on a Windows phone?

iCloud is attempting to have applications rebuilt on top of its proprietary notion of a cloud-assisted data model. In a sense it’s trying to recreate all applications in its own image, on its own platforms, and trying to kill the concept of sync products along with it. Apple is putting some serious muscle behind this vision by integrating it more deeply into the operating system.

With Skydrive, Microsoft has a goal of “delivering personal cloud storage for billions of people.” But its historic approach to openness and cooperation leaves a lot to be desired. Microsoft Office 365 is a noble effort by Microsoft to enter the web-office market, but with nonexistent APIs to allow content import or editing, it’s yet another walled garden of information that gets created in its environment. Google, too, doesn’t have the richest history of long-term developer support.

I don’t have the answers, but the emerging problem is apparent enough. We hear it from our users and customers – in the form of confusion, consternation, and signs in the market. There is a greater abundance of applications that offer little similarity, security, or integration; and consequently go unmanaged. This is an untenable fate for enterprises. And whereas the inherent heterogeneity of devices and platforms in today’s businesses will force some degree of openness from enterprise players, there is no such check in the consumer world.

So get ready for a number of years of absolute rock-your-world style competition among major players fighting for your content and the cloud. Every photo you upload, every song you listen to, every video your capture. These guys want it. With around $200B in cash between Microsoft, Apple, and Google alone, cost is no issue; they see your data as the center of their universe. They’ll probably get it. I’m just happy to be swimming in enterprise waters.

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