Will Egnyte set you alight?

When I first heard about Egnyte I was underwhelmed. How many more file storage systems do we need? That was a gross under estimation of what Egnyte can deliver for the smaller business. Described by Vineet Jain, the company's CEO as 'information infrastructure', the company sees storage as one of an enabling set of technologies that can help the small business save on capital expenditure while providing a way to collaborate in the internet cloud.

Announced earlier today, Egnyte has added continuous backup and business collaboration to its original storage offering while also offering what could be a compelling business model for those companies that routinely share information. Rather than offer per GB pricing, Egnyte has moved to a 'power user' and 'standard user' model, removing all storage restrictions. Power users cost $15 per month each while standard users are free of charge. The difference between the two sets of services is easy to understand from the following graphic:

I can for example see medical practitioners and tax lawyers considering this service as a way of securely distributing and sharing information that might otherwise be contained in large files. Having a service that acts as a continuous backup takes away the pain that arises when hard disks fail.

Egnyte keeps the interface simple and clean by using the well understood notion of file folders. The service has real time indexing which means the entire database of files can be searched within 20 seconds. That's not stunningly fast for an individual user but good enough for a service of this kind.

Egnyte has built its own infrastructure rather than use alternatives like Amazon S3. Jain says this is because: "Constant uploading and downloading of numerous files becomes expensive with S3 so we felt it weas better to develop our own service layer."

At present, the company is using direct channels to reach the market and has paying users. Longer term, it believes it needs channel partners and is in current negotiations with three undisclosed distribution channels that cover at least two geographies.

Given today's buzz is around cloud computing, you have to wonder whether there is a long term market for this kind of service. Jain brushes such concerns aside: "Files are not going away and if you think about it, different media will demand more rather than less file storage. We're not in the content creation business so we don't compete with a Google so we're comfortable this is a service that will last."

Egnyte is currently self-funded and the company is not currently looking for funding.