Hu Yoshida

The Race to Zero

Blog Post created by Hu Yoshida Employee on Jun 10, 2015

Some friends at Infosys sent me this article from Business Insider and asked that I comment on it.

 

hu-061015.pngThe title of the article is “Google just took the lead in the dangerous game called 'Race To Zero'” The article is about Google’s new service called Google Photo, which enables you to have unlimited cloud storage for your photos for the price of $0. Google is not the first to do this. Amazon provides free cloud storage for users of Amazon Prime, iCloud where I store my photos, provides 5 GB for free and Microsoft offers unlimited storage for licensed users of Office 365.

 

While cloud storage for other purposes still carries a cost at Amazon, Google, and Microsoft, the author, Julie Bort, believes that one day all storage will be free as cloud providers compete for customers in this “Race to Zero”. Storage service may be free, but the storage infrastructure and the data services around it will still be costly. Building hyper-scale data centers cost billions of dollars, and cloud providers will need to find other unique cloud services that customers will pay for or capitalize on the data that is contained in all this “free” storage. Photo’s taken on smart phones have a lot of data about where and when a photo was taken and can reveal information about your preferences and relationships if the images in the photos can be analyzed. Offering free storage to gain this type of control of your personal data can more than offset the cost for these cloud providers.

 

Free storage versus targeted advertising may be an acceptable trade off for storing your family photos. In fact you may appreciate being notified when your favorite shoe style is on sale at a local store or website. However it is certainly not acceptable for enterprise storage users. Greg Knierierman who works for HDS and hosts a successful podcast “Speaking Tech” on The Register has been blogging on the need for enterprises to control their data. He cites a recent survey by The Economist where 87% of respondents reported that their senior management is strongly concerned about protecting the security and privacy of corporate data. I am sure that enterprise users will not use free storage unless the provider can insure the security and privacy of the data.

 

Cloud providers may still offer free storage and leave it under your control as a way to retain your business for other services. Offering free storage is a way to lock customers into cloud services, since it is difficult to move large quantities of data from one cloud storage provider to another over the Internet. It becomes even more difficult if the cloud provider uses a proprietary app to ingest and index the data. It is not far fetched to think that public cloud providers may even go beyond zero, and offer rebates or other incentives to entice users to store data in their cloud as a way to lock them in for other fee services.

 

One way to avoid the free storage trap is to use a content platform that provides you with all the controls to store, access, and protect the data no matter which free cloud service you use. Hitachi’s Content Platform enables you to manage all your content data from behind your firewall, store data anywhere, including public cloud, and access it anywhere with the proper authorization and authentication. You control the encryption of data where ever it resides and you can crypto shred it without fear of leaving any data behind. When the storage is free, you can afford to keep copies in different clouds so if one cloud vendor goes under or is unavailable, you can switch to another cloud where your content is copied, and you can continue running without waiting months to recover the data over the internet.

 

Free cloud storage is just another tool that individuals and enterprises can use to manage their storage needs as long as they understand the requirements of their data and the tradeoffs. Nothing is ever free. It may not be measured in money, but it will always require some trade off. The trade off may be acceptable. It may mean that you give up some control or you buy additional management tools to insure security and flexibility and avoid vendor lock-ins. This week I am travelling in India, and I will be able to communicate with my family and talk to my grandkids, for free, using Face Time. The trade off is that everyone in my family now has an Apple device. I can share documents and collaborate with my Hitachi colleagues around the world using free Wi-Fi in my hotel room with HCP Anywhere knowing that the documents are secure.

 

The greatest risk in the ”Race to Zero” is the sustainability of this business model. It requires constant innovation to stay ahead of the game. While the West is focused on public cloud vendors like Amazon and Google, there are other cloud companies in other geos like Ali Baba, who could be much more aggressive and innovative in this race.

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