Sometimes Box Size Does Matter

(ummm – any double entendre taken from that title was unintentional, sort of!)

Box.net, the cloud content management vendor, is today upping the ante in the war of storage space. They’re moving all plans to a much greater storage allocation, the free edition moves from 1GB to 5GB while the business edition moves from 15GB to a massive 500GB. In a world where vendors are racing each other to offer a point of difference, storage space is a reasonably easy bet. Storage is a nice easy metric to measure and compare, storage costs are dropping rapidly and many customers will make their buying decisions based on storage regardless of whether or not they’ll actually use the space.

As a point of difference, this is likely to be a short lived, but powerful differentiator. It’s not going to be hard for Microsoft or Google in particular, with their greater economies of scale, to meet box.net’s storage limits, however in the short term box can gain momentum by claiming a real benefit over other offerings (see chart below).

bigbox

More interestingly however is box.net CEO Aaron Levie’s stated intention to move towards “infinite storage”.

Ultimately, we want to move in a direction where storage is never a concern for end users or IT administrators, where the cloud is effectively “infinite.” End users and IT administrators should no longer have to worry about traditional issues such as storage allotments

In fact the enterprise level of box’s offering is going that way, offering enterprises unlimited storage space and enabling them to abstract the terabytes of data they currently have on-premise over to the cloud. In doing so, as box is quick to point out, they save themselves the hassles of managing infrastructure and free themselves up to concentrate on core business – whatever that may be.

As I said before – there is only a short term marketing benefit to box doing this. Despite their growth and investment in infrastructure themselves (they now have two separate data centers) they can’t hope to compete with Microsoft or Google in terms of economies of scale – in a race to zero, while Box has some speed off the blocks, those big players will always have more stamina and can win a war based on price alone.

Of course none of that matters and the reality is that box scores a successful coup in being the first to offer this sort of storage. Another example of quick and nimble being a powerful competitive differentiator.

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