Why Google Drive Has Competitors on Edge

Published Thu, Apr 26th, 2012   Justin Fritz, Executive Editor

I’m sure you’ve heard that Google’s (Nasdaq: GOOG) new cloud storage offering, Google Drive, launched on Tuesday.

For those of you unfamiliar with the service, here’s a quick description from Google Drive’s product manager, Scott Johnston:

“Today, we’re introducing Google Drive – a place where you can create, share, collaborate and keep all of your work. Whether you’re drawing up floor plans with a client, creating a presentation with classmates, or planning next year’s budget with colleagues, Drive makes it easy to work together. You can upload and access all of your files, including videos, photos, Google Docs, PDFs and beyond.”

If it sounds similar to other storage services like Dropbox, well, that’s because it is.

Like other cloud services, Google Drive works through an application for Windows and Apple’s (Nasdaq: AAPL) OS X that syncs a user’s files. And you can then access them on any device with a data connection, including Android smartphones and tablets, and eventually iPhones and iPads, as well.

Also just like competitors, the files are searchable within its browser application. Google Drive’s advanced search feature does look a bit beefier, though, with the ability to search by document type and owner.

Something else that sets Google Drive apart is that the company plans to integrate the service into its Chrome operating system. So computers running on the browser-based interface can save files directly to the cloud without taking extra steps. According to Senior Vice President, Sundar Pichai, “This makes it really powerful because you just don’t think about it.”

That’s certainly useful, but not exactly a showstopper for me, as it’s fairly simple to set up your PC to link with Dropbox in a similar fashion.

But here’s where Google Drive really shines…

Benefits That Have Competitors Spooked

What’s great about Google’s storage service is that files saved in Drive benefit from the collaboration tools currently seen in Google Docs. Meaning you can work with remote users on editing documents and chat with others about those changes in real time. So the service directly caters to enterprise users.

Another feature that gives Drive an edge is optical character recognition (OCR). This automatically recognizes text from scanned files and images in photos so they can be searchable.

So when you upload pictures of easily recognizable places like, say, the Empire State Building, Google Drive immediately recognizes the images. So searching for Empire State Building can pull up the picture, even if you don’t add a caption.

Price is also a huge bonus. Google Drive will dole out 5GB of storage to each user for free, which is pretty standard among other cloud storage competitors. But you can add an extra 25GB for $2.49 a month and 100GB for $4.99 a month. Compare that to Dropbox, where an extra 50GB will cost you $9.99 a month and 100GB goes for $19.99.

Bottom line: Based on these benefits, Google Drive certainly has a shot at poaching users from competing services. But no matter how the company fares against the current cloud storage leaders, the biggest beneficiaries of the new service are consumers, since it should force contenders to lower their own data storage prices and improve functionality…

In fact, competitors were already taking pre-emptive action the day before Google Drive’s debut.

As Mike Barton of Wired’s Cloudline blog reported on Monday, “[Today] the cloud storage/sync darling Dropbox… introduced an easier, more social feature for its service: direct linking to shared content. And Microsoft polished up its Skydrive service… as well as upping the ante for some new signups to (get this!) 7GB.”

And you can bet other cloud storage providers – like Box and SugarSync – will follow suit.

Good investing,

Justin Fritz

Editor’s Note: As data storage and other cloud-based activity builds momentum, companies will need to beef up their data center infrastructure to keep pace with demand. Senior Analyst, Matthew Weinschenk, recently uncovered a data center company that’s set to cash in on the trend, and it sports an impressive list of big data clients including Google, Amazon, Microsoft, IBM and Facebook. To see Matthew’s full breakdown of this opportunity, upgrade your subscription to WSD Insider today. Here’s how.