Third-party cloud storage services to stumble in enterprise push

Strong consumer support for services such as Dropbox may not necessarily lead to strong enterprise uptake in Asia due to local market conditions and regulations.
Written by Jamie Yap, Contributor

Cloud storage providers such as Dropbox and Box are winning over consumers by emphasizing the availability of their services across multiple ecosystems and geographies. However, the enterprise-grade versions of these services may not be sufficiently robust to win over enterprises as they may not comply with data-related regulations.

Leo Wang, analyst at China Market Research Group (CMR), noted the enterprise push by these cloud storage providers, many of which started by touting their services to consumers. This is because more companies are experiencing higher traffic of data moving across geographies between employees and such services help facilitate the information exchange, he said.

A strong user following for consumer cloud storage services doesn't necessarily translate to adoption of the enterprise version at companies.

The appeal of these third-party storage providers also lies in the fact that the user experience with regard to simplicity and ease of use is generally positive, Wang added.

Steve Hodgkinson, IT research director at Ovum, said players such as Dropbox and Box are scaling their businesses up by improving their products and marketing efforts, highlighting particularly the ubiquity and availability of their services across geographies.

In Asia, these service providers have amassed a strong consumer following and these users in turn become advocates of the service in their workplaces, he noted. Since employees today are increasingly picking their own productivity tools for work--with or without IT's approval--their support for a service may pressure companies to consider subscribing for the enterprise version of these storage services, Hodgkinson said.

Dropbox, for one, is looking to capitalize on these developments. Last month, it announced enhancements to its enterprise service Dropbox for Teams to give IT managers increased insight and control over business users' Dropbox accounts.

This move ratchets up competition with Box, which has positioned itself as a tool for enterprises as it offers increased security and management features.

When contacted, a Dropbox spokesperson said the company sees its success with corporations driven by the fact it is "easy to use, deploy and it just works". As people bring the online products they use in their personal life into the workplace, the company is focused on designing a product that fits the needs of end-users and IT administrators, she said.

On how Asia will receive its enterprise services, the spokesperson said since Dropbox's goal is to build a global product, it will address the needs of users regardless of geography.

Box did not respond to ZDNet Asia's queries by press time.

Regulations may throttle ambitions
Despite putting more focus on the enterprise though, these cloud storage services will face challenges winning over businesses, particularly if they fail to meet the corporate IT policy requirements or even government regulations around data and storage, Hodgkinson noted.

For instance, data sovereignty will be a challenge for certain industries such as finance, where there are specific industry rules around data sovereignty, he explained.

Furthermore, customers won in the consumer space may not necessarily carry over to the enterprise arena. "The CIO can actually just block access via the firewall," the analyst added.

Wang also believed that while it is an advantage to have end-users familiar with one's product, enterprise IT requirements differ from a consumer's in terms of security, confidentiality, access and collaboration.

Getting companies in certain Asian markets to purchase the enterprise version of the service may also prove to be an uphill struggle. In China, for example, consumers and businesses are accustomed to free software. So even if many employees are using Dropbox or Box services, companies may have to be educated and convinced of the benefits of paid version, he added.

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