I have a theory, and I want to get public opinion.
While at a major Storage Vendor for three years, part of my charter was to be on point to watch the Online Data Storage market. I carefully watched many of the players emerge, indexed and listed many of the vendors, and at one point made some personal predictions of the future of online data storage.
Anil Gupta and I are having a friendly debate about the future of Online Data Storage. In my last post on the topic, I suggest that Online Data Storage Companies will eventually go through the following changes.
My Predictions of the Online Data Storage Industry
1) Online Data Storage is cheap
Today, users pay a nominal amount for Online Data Storage, it’s pretty inexpensive.
2) A price war will lower costs even further
In the near future, a price war will erupt between the large Online Data Storage companies, perhaps between companies like Amazon S3, Anticipated Google storage service, Seagate’s eVault, OmniDrive, Box and others. Considering there are hundreds of players in this already crowded market, finding a competitive edge will be a challenge. likely coupling the service with other offerings will make it enticing.
3) Commoditization will go upstream
Online Data Storage will be similar to ‘free checking’, some web companies will offer online data storage as an additional ‘value add’ service. This model will start at the consumer level, move into small business, then elements will climb into larger business segments. It’s unlikely in my mind this will happen for all storage, some data is way too valuable to be released, profiled or shared.
4) Online Data Storage companies will pay users to upload data
One smart company will figure it all out. They will realize that the user data that is in their systems accounts for a tremendous amount of user intelligence for analysis. They will analyze the metadata, create new, (perhaps use microformats) and build rich user profiles.
5) Marketers will take this data and serve highly contextual advertising
This is a Marketers gold mine, this information yielded by the correct company can provide highly accurate and predictive models for advertising. As a result, the competitive edge will be to pay users to upload data in return for contextualized marketing. Since the Storage Cloud will have elements of social sharing, this model can start to get very powerful as it expands to individuals of similar interests, it will be easy to identify others.
Business Model Summary:
The amount Marketers will pay for rich contextual information will be less than the cost to maintain the Online Data Storage infrastructure.
Weigh in, what’s your opinion?
This is all speculative of course, but I’m just putting together my Web, Marketing and 3 years at a Data Storage company and here’s what I envision happening. In addition to the Online Data Storage vendors above, I’d love to hear the opinions from the Storage Community such as Toigo, Anil, The Monkeys, Storagezilla, thought leader Michael Arrington and Security Expert Martin McKeay.
Jan 2007: Google/YouTube will start paying those who upload data.