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Enterprise file sync-and-share market heats up

Channel partners can ride the wave of widespread enterprise file sync-and-share adoption by offering services around compliance, cloud storage migrations and more.

A couple years ago, when REDtech LLC, an IT solution provider that sells backup and storage products, learned about enterprise file sync and share (EFSS), owner Rusty Easter thought it made sense to begin offering the cloud storage product.

Easter decided to offer CudaDrive -- formerly Copy for Companies -- a new EFSS product from Barracuda Networks Inc., since REDtech is already a Barracuda partner. "The challenge has been that many of the solutions for file sync and share haven't been enterprise class," Easter said.

CudaDrive comes with 256-bit Advanced Encryption Standard (AES). Additionally, Barracuda offers service-level agreements (SLAs), which Easter said is critical for his customers. "If there's a failure, they'll restore your data," unlike free cloud storage services. "The competitors haven't been there [for customers]."

File sync and share refers to either on-premises or cloud-based capabilities "that enable individuals to synchronize and share documents, photos, videos and files across multiple devices," either within an organization or on a mobile device as data sharing among apps, according to Gartner Inc.

One of the big challenges a company has is [determining] what data is eligible to go to cloud and what needs to stay on-premises.
Terri McCluresenior analyst, Enterprise Strategy Group

The enterprise file sync-and-share market began to emerge in 2011 on the heels of the success of similar consumer products, said Terri McClure, senior analyst at Enterprise Strategy Group (ESG) Inc., based in Milford, Mass. In 2012, ESG surveyed businesses to see whether they were using enterprise file sync and share, and 28% said they had deployed it somewhere in their organization, she said. By early 2014, that number had jumped to 42%. However, when asked how broad usage was, survey respondents said EFSS was still limited to certain business units and individuals, she noted.

"We certainly see more widespread plans to deploy" the technology within the next couple of years, McClure said. Fifty-two percent of the surveyed organizations indicated they will have deployed EFSS on a companywide basis in three years' time, she said. Twenty-two percent said they currently deploy EFSS companywide.

Enterprise sync-and-share market: Targeting compliance needs

There are a number of opportunities for channel partners to offer services around enterprise file sync and share, such as helping end-user customers select products that are right for their businesses, McClure said. "Certainly, the evaluation process for these solutions can get complex, because you're talking about data that has many endpoints," she explained. "Helping people scope out solutions that can help them stay in compliance" will be a valuable service.

ESG also asked businesses that have deployed EFSS about what challenges they face. Training and security emerged as key concerns, she said. "When you have a home sync-and-share solution, it's very straightforward; but corporate solutions are under governance on where you can share files."

"[EFSS] can be very powerful and increase productivity … so there is a big opportunity [for partners] in training users on how to use these solutions, and create new workflows and take the friction out of business processes," she said.

Partners can also offer enterprise file sync-and-share services on top of their own offerings, such as consulting. "One of the big challenges a company has is [determining] what data is eligible to go to cloud and what needs to stay on-premises." This includes discovery and data classification services, and architecting a service that will help people keep what needs to be on-premises kept there, McClure said.

"Data is our junk drawer, and in that junk drawer … is really important stuff. But you forget what's there. If you have really important files in there and the keys to kingdom are on someone's laptop, you don't want that going to cloud."

Cloud storage benefits for enterprise customers

When your business has multiple locations, it is often challenging to figure out which location has run out of storage and then having to upgrade, noted Arthur Chang, CEO of PanTerra Networks Inc. in Santa Clara, Calif., maker of the SmartBox EFSS product. "Disk storage changes so quickly, people end up with obsolete hardware," he added. They also have to ensure they have redundant hardware so if one disk fails, data isn't lost.

Chang acknowledged that cloud storage "hasn't been without its challenges, and certainly one [challenge] that's been most visible in the last couple of years is security." Although it is "reasonably hard" for a hacker to access data stored in the cloud, it is not impossible -- as security breaches have shown.

"You have to be diligent, and one of the advantages of data in the cloud … is [cloud providers] are experts at security and keep up with latest security trends, versus you putting in your own storage and having to be the expert," Chang said.

But cloud security has come of age, which will enable the EFSS market to grow, he said, especially as more users share and access files from different devices. "Now what's happening is people are saying, 'We need a common mechanism to share content inside and outside [the organization] and still maintain some level of control.'" EFFS is ideal for people who not only want to read and share data wherever they are, but make changes to it, he said.

In addition to EFSS capabilities, SmartBox includes a communication layer that provides the ability for Web conferencing.

EFSS offers a 'migration opportunity'

Solution provider Converged Network Services Group partners with PanTerra for EFSS, which is a "migration opportunity" for businesses looking to move file sharing and storage functions to the cloud using a product offering enterprise-grade features, said Rob Koehler, director of sales at Converged Network Services Group, based in Charlotte, N.C.

"I think a lot of customers are comfortable and familiar with colo [colocation] and disaster recovery and storage and all the apps under that umbrella. So, once they're comfortable with any hosted app … then they're likely a candidate for migrating more and more apps to the cloud," he said. EFSS is still in somewhat of a nascent stage, but is an "up-and-coming opportunity," Koehler said.

Partners can capitalize on upselling EFSS to the customers they already sell hosted PBX and unified communications offerings to, since they are "natural candidates" to then look at migrating storage to the cloud, he said. Partners that have established loyal and trusted relationships with customers will see their reliance on them grow.

Both Easter and Koehler agree that partners can use EFSS as either an entry-level service, if they are making the transition to the cloud, or as a stepping stone toward offering other cloud services.

EFSS products, channel opportunities continue to develop

Right now, EFSS constitutes less than 5% of REDtech's business, but Easter expects strong adoption of CudaDrive with his existing customers. "Large businesses need help with mobility for their sales teams, and what they have isn't as flexible and they don't replace the hardware frequently" when it comes to file storage, Easter said. "So they need a solution that will go in and augment what they already have in place."

Once a business sees the value of EFSS, "when it's time to do a hardware refresh, you're on the list. You've established yourself as a solution provider who can potentially sell them other services and hardware," he said.

McClure agreed. "It's the canary in the coal mine, where people are having … challenges right now containing corporate data because workers aren't waiting for IT to say, 'Here's what you can do,'" she said. "People are installing consumer tools to do it. It's the first thing that needs to be addressed, because it's probably the area where there's the most bleeding right now." Because EFSS products are starting to mature, partners can build services on top of them, she added.

PanTerra also offers a program, Fast Start, which Chang said was developed following feedback from a number of partners who said their conundrum was having the cash flow to pay salespeople so they can build recurring revenue from customers. When a partner signs up for Fast Start, they receive a cash bonus within the first four months for every account they sign, he said. "They not only get recurring revenue, but also a huge lump sum for every user they put on the [SmartBox] system, and that allows them to pay their salespeople." Chang said they are "very particular" about the partners they sign, since they are investing in them and "lose money in the first four months."

Barracuda just introduced a virtual drive so that what users see in the cloud will be available on their desktop. It is just not stored locally, said Cyrus Farudi, director of cloud file services at Barracuda Networks, based in Campbell, Calif. Once the agent is installed, a user will always have access to their files. "I can't physically sync everything to my machine," but with the new technology, if a user needs to get a file, they log in to the Web version of CudaDrive to access the cloud repository to get the file. "The only things you see locally are the things you've said, 'Sync to my hard drive,' so if you want it, you have to go to cloud," Farudi explained.

Barracuda also offers an appliance that works with its cloud-connected service that functions much like a file server and provides a local network drive to save data locally.

McClure said several other vendors offer EFFS opportunities for the channel, including Syncplicity, Accellion and Soonr. Dropbox for Business and Box are building channel partner programs too, she said.

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