Can Dropbox, other cloud providers survive Google Drive?

Thursday, April 26th 2012. | Software News

– 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?

“When the 800-pound gorilla jumps in the pool it usually makes a splash. It doesn’t mean it can swim well. There is room in the market for multiple players, but Google’s entry puts pressure on the competition, especially smaller players,” said Gartner Research Director Michael Gartenberg.

Like Apple and Microsoft, Gartenberg noted that Google has a relationship with a millions of consumers who use its Gmail, Google Docs, Chrome web browser and any number of other applications. Because of those existing relationships, Google has an advantage in being able woo existing customers over to its new storage and synchronization service.

While Google Drive will no doubt compete with Microsoft’s SkyDrive and Apple’s iCloud, the companies more at risk are smaller specialized service providers, such as DropBox, Box, SugarSync and YouSendIt. Those sites have appealed more to technology enthusiasts, not average consumers. And, when it comes to adoption, relationships matter.

“They don’t have much of a relationship with theses smaller [cloud] companies,” Gartenberg said. “The challenge for these smaller companies is reaching out to consumers or shifting to somewhat of a different market; the problem is that Google also wants the business market, the small business market and ultimately the enterprise IT market.”

In a statement responding to Google’s entry into the cloud storage space, a Dropbox spokesman said his company does “one thing,” and it does it better than anyone else.

“Companies of all shapes and sizes have tossed in their hats over the years, but we’ve stayed ahead by building the best possible experience and making a product that millions of people love,” he said.

Yet, on Dropbox’s own online users forum, there were 3,000 posts with regard to Google Drive, and some users were indicating they were already defecting. Price was a major incentive.

Google offers 5GB of capacity for free and allows an upgrade to 25GB for $ 2.49 a month, 100GB for $ 4.99 a month or 1TB for $ 49.99 a month. When you upgrade to a paid account, your Gmail account storage will also expand to 25GB. On an annual basis, Google Drive charges $ 60 for 100GB.

Dropbox offers 2GB for free, and its first paid upgrade is 50GB for $ 9.99 a month, or $ 99 per year.

One user who identified himself as Ritchie H. stated: “Goodbye Dropbox – Hello Drive. 200GB for $ 9.99? I think that’s what is known as a no brainier. Security Schoomaty!”

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