Buh-bye hard drive: Box.net's online storage now directly accessible by multiple Web apps

When I think of the online storage market, I primarily think of 2 1/2 models. The first is the one that's for developers: services like Amazon's S3 or AOL's X-Drive where, through APIs that are programmatically accessed by their applications, software developers hardwire their software to the storage found in Amazon's datacenter instead of wiring their software to a server in their own datacenter.

The second is where there's some online storage somewhere that one or more people upload their files to for a variety of reasons. One of those reasons could be online backup. Another could be collaboration. I copy a file to some shared drive in the cloud that you have access to. You go to that shared drive and download it. Fundamentally, there isn't much difference between this and the remaining 1/2 a model where there's some shared storage online, but it's integrated into the application you're using (where the data is often shared) is transparent to the end user. In other words, the end-user is never really thinking about online storage. An example is Facebook and how you can upload and share files (photos, music, etc.) there. Another example is Google Apps. Whether you're uploading documents to Google Apps for sharing or creating them right in Google Apps, online storage is playing a key role in your ability to keep those documents online (and collaborate on them through Google Apps collaborative capabilities).

For more than two years, Box.net has been a player in both of the primary models -- offering direct access to its online storage through a browser, but also offering APIs so that developers can hardwire Box.net's online storage directly into their applications. But now, through a new offering that Box.net co-founder and CEO Aaron Levie (pronounced lev-ee) is calling OpenBox comes a completely different model -- one where existing online services (for example EchoSign's online document signing service) are integrated directly into Box.net's online storage service in turnkey fashion, without the need for a software developer to mashup them (the apps, the storage) up for you. Put another way, whereas before you might have used EchoSign to retrieve and sign a file that was on your local hard drive, now you can say buh-bye hard drive and do the same thing with a file that lives in your Box.net directory.

EchoSign is just one of Box.net's OpenBox launch partners. The others are as follows:

• eFax
• Autodesk
• Zoho
• ThinkFree
• Scribd
• Picnik
• Zazzle
• Mimeo
• Twitter
• Myxer

In the attached video, I caught up with Levie via our reviewcasting rig (this time, instead of using WebEx, we used the Java-based GoToMeeting.com) who gives us a demonstration of how it works. For example, you can see how the contextual menus in Box.net make it possible to click on a Word document and sign it with EchoSign or to pick an image and edit it with Picnik.

The most impressive thing about the service is how it obviates the need to keep your files in multiple locations. For example, let's say you use Google Apps to create a PDF document that you want to distribute to customers that are in your salesforce.com database. Normally, the way you might do this is you would create the file in Google Apps, save it in PDF format, download it to your PC and the upload it to salesforce.com before finally sending it out. But let's say, when originally saving the PDF file, you could save it to your Box.net account directly (instead of to Google's storage) and then let's say from salesforce.com, when it came time to send that PDF to a customer, you could access the box.net storage directly. In the latter situation, you've taken a huge amount of the friction out of the process because you don't have to move the file around at all. It is saved, modified, and accessed from one place (in the video Levie says that Box.net is working on the salesforce integration piece... no word on Google Apps yet... I just used that as a really good example of the potential).

What are the downsides? As far as I can tell, cost is the biggie. Box.net will offer anybody 1 gigabyte of storage for free. For box.net to maintain 5GB of storage, the cost is $8 per month and for 15GB, it's $20/mo. These prices aren't bad considering the sorts of services that your files can be frictionlessly integrated with. But, cost might come up in the discussion for people already using services like Google Apps. Users of the paid Google Apps service (cost is $50 per user per year) get 25GB of storage (in addition to all the applications that they have access to).

While Google Apps isn't integrated into OpenBox yet or now, that business model and cost , where the storage is transparently integrated into service for such a low cost sets a precedent that may cause some people to question Box.net's fees. Bear in mind that the 25GB of storage is mainly e-mail (but some have figured out how to turn it into more general purpose storage). But if you did the math on storage alone, the cost works out to be $2 per GB of storage per year. Under that formula, Box.net's 15GB storage would cost $30 per year. But under Box.net's formula, 15GB of storage costs $240 per year. That's a big difference.

Bear in mind this is a simplistic analysis. It's not an apples to apples comparison since the the two companies offer entirely different services around their storage infrastructures and Box.net doesn't necessarily charge organizations on a per user basis the way Google does. As more users are added, Box.net starts to look better. But these are the sorts of analyses that organizations will do when trying to determine the value of services like Google Apps or OpenBox. Quite frankly, I think the OpenBox model is SO cool and innovative that it would behoove Google or Yahoo to acquire it and integrate into their portfolio of offerings. But, given Box.net's neutrality, that may not be a good idea as all companies (not just Google and Yahoo) look to keep users on their networks as much as possible.

Check out the video.

Related -- TechCrunch: Box.net Releases OpenBox Platform for Integration of Web Applications