4 cloud storage predictions for 2014

Alex Gorbansky is CEO and founder of Docurated.

I’ve been involved in the enterprise storage industry since 2000, first as a buyer/end-user at Loudcloud, then as a vendor at EMC, and finally as an independent analyst. The dynamics in the cloud storage market have eerie similarities to the intense competition between EMC, Hitachi Data Systems, NetApp, and Veritas circa 2001.

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So what can we learn from the original storage wars?

2013 was a tipping point for the cloud storage market. Cloud storage and file sharing products were validated in the mainstream enterprise and began to be widely adopted. Vendors like Box, Dropbox, and Citrix ShareFile beefed up their arsenals with capital raises, new security enhancements, acquisitions, and partnerships.

This begs the question: what can we expect in 2014?

Box and Dropbox IPOs Will be Watershed Events Benefiting The Entire Space

So where should investors place their bets? Given its most recent $2B valuation and enterprise focus, Box has more upside, but don’t count out Drew Houston and team. Dropbox has two times the revenue scale of Box, is investing heavily in the enterprise, and is one or two strategic acquisitions away from leveling the playing field.

In short, this is not a zero sum game, and the entire cloud file sharing market will benefit from the exposure. This includes incumbents like EMC, Citrix, and Microsoft, which all have their own plays. An IPO will also create the necessary legitimacy for regulated industries like financial services to seriously consider adopting cloud storage solutions. Remember there were many winners in the original storage wars.

Buyers Will Wield Enormous Leverage

With many viable offerings to choose from, buyers will be firmly in control. If you’re in the market for a cloud file sharing solution in 2014, it’s your chance to get the deal of a lifetime. IT buyers should evaluate multiple offerings to get the best value possible. Don’t settle for a single product just because the company gets most buzz in the press and don’t ignore the “big boys.”

Because vendors are looking to gain market share (in the hope of future customer lifetime value), customers have enormous negotiating leverage and can lock in significant long-term discounts. Finally, if you have a big enough environment, buyers should consider deploying multiple solutions to avoid vendor lock-in and future pricing battles.

Vendors Will Differentiate on Ease of Use and Information Velocity

In 2013, vendors solidified their core infrastructure capabilities to address the needs of the technical buyer. These features are now table-stakes. So how will companies differentiate their products going forward?:

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#1: Simplicity and ease of use: The perspective of IT admins and actual business end-users will be key.

#2: Information Velocity: As the volume of unstructured data stored in these repositories grows at logarithmic scale, they will become the de-facto brain of the enterprise.

Therefore, the ability of users to instantly surface the precise and most relevant content they need from their cloud storage system(s) will be paramount. For example, a sales executive looking for a specific case study slide relevant to a current deal should be able to get and use the information she needs instantly to close her deal. Look for vendors to enable this type of capability using advanced content and metadata analytics.

New Killer Apps Will Extend Cloud Storage To Solve End-User Business Problems

Both Box and Dropbox have visions beyond being just a product provider. Each firm wants to become a platform with a vibrant ecosystem of development partners. The stage is now set for the emergence of new set apps that leverage cloud storage infrastructure to address key functional and industry specific business challenges. Examples of apps are dynamic workflows to process payments, automated content curation to pull specific content pieces for a new campaign, or advanced content analytics that highlight the most active or popular content in an organization. Some of these will be built by third party developers and others will be developed in-house by IT departments.

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In fact, many leading CIOs are already thinking about how to extend the cloud storage grid to drive more value to their end-users and maximize the value of their investment. Over time, the value of cloud storage will shift to these new intelligent layers and user-centric workflows.

Whether you are a vendor, buyer, or investor in the cloud storage market, 2014 promises to be the most exciting year yet for the industry.

Alex Gorbansky is the CEO and founder of Docurated, an enterprise SaaS company which makes it easy for sales and marketing teams to find and use content buried in cloud and local file and folder based repositories. Prior to Docurated, Alex co-founded Frontier Strategy Group, a leading emerging markets research and data business. Earlier in his career, Alex was a storage industry analyst at Taneja Group and held product management roles at EMC and Loudcloud. Follow Alex on Twitter @docurated.