Can Dropbox, Other Cloud Providers Survive Google Drive?

The 800-pound gorilla has landed and is leveraging its existing relationship with hundreds of millions of users to port them to their cloud storage and file sharing service Google Drive. Can smaller cloud storage players survive this assault?

By Lucas Mearian
Thu, April 26, 2012
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John E wrote: "Drive: $60 a year for 100GB. Dropbox: $99 a year for 50GB. My $99 yearly plan just auto-renewed and I don't know if I feel good about it in light on this weeks news. I really want to stay with Dropbox (because I think they are better), but the difference in price/space is large enough to consider switching. I hope that Dropbox responds, for their sake."

And Daniel W. wrote: "Google Drive is going to devastate Dropbox. I hate to say it, Google being the big bad corporate machine and all, but Dropbox is going to [hemorrhage] users unless they dramatically lower their prices (which could even require being bought up)."

John Webster, a senior partner with Evaluator Group, a market research firm that specializes in data storage issues, said Google is so large and profitable that it can easily spin up a service and undercut the competition. "If they want to drive smaller players out of the market, it's possible they could," Webster said. "They could make it more difficult for smaller players to make a buck."

Chris Yeh, vice president of platforms at Box, a cloud storage service aimed at businesses, said while he's wary of Google's entry, it also validates what his and other companies have been doing for years.

"One of the things that really struck me ... is that it was really hard when we founded Box to get someone to care about this space," Yeh said. "So there's definitely a part of us feeling that this week has been a good one for us."

Yeh also knows that while Google Drive is currently aimed an consumers, it won't be long before business-class offerings that allow IT managers administrative control, will emerge.

"I think they start from a very strong position because they have a Google Docs franchise that's not only popular with everyday consumers but businesses as well," he said.

Box also has a strong partnership with Google and its Documents storage service. Google Docs apps can open files within Box. The company also has a strong relationship with Google Apps in their store.

"So on one hand we like working with Google and on the other hand, we know we'll see them in the field," Yeh said. "But it will take a while to catch up from an enterprise point of view. We've been in this business for some time."

For example, Box allows multiple email domains to exist inside the same enterprise account, allowing different business groups to have their own email accounts for collaboration purposes.

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