Selling Storage in a Free For All Market

Peter : On Rad's Radar?
Peter
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Selling Storage in a Free For All Market

I say consumer storage market because for small business with less than 15 employees, consumer apps are used. Earlier this week, Microsoft offered 1TB of storage on OneDrive to Office365 customers. (Thx Pete Davis for the heads-up.)

Today, at I/O, Google brings out the big guns -- unlimited storage for $10 per month and Office editing. [Betanews headline].

This makes it tough for anyone to make money in storage -- like say Dropbox or Box.net. Box.net was thinking about IPO until you look at the financials and see that customer acquisition is expensive and the hyper-competition is having an affect. It means you need to pivot. Pivot to HIPAA or Enterprise or Education or some other vertical. But pivot you must.

Most companies can't beat cable on price; and most can't beat MS, GOOG or AMAZ on price either. Efficiency of scale does sometimes work. Almost monopoly power does too.

In speaking with TMC's Paula Bernier, it became clear (finally) that Panterra's launch of SmartBox as a loss leader marketing tool was pretty cool. Get agents to offer SmartBox to everyone. The user gets free storage and secure file-sharing, plus a chat and peer-to-peer voice app - and if they ever upgrade, the agent makes commission. (Agents should be installing this app everywhere!)

The channel isn't making big money selling Office365 or Google Apps. Dropbox started a channel program (but I have no idea how successful it is). All storage runs into some issues with government compliance (Can you say HIPAA?) I don't know if this is another niche channel market - like contact center - or if the channel is actually actively driving revenue in data storage. If they are, now the key will be how channel partners distinguish between plain ole file storage like GOOG/MS Drives and true back-up applications. Or will they even bother?



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