Launch of Google Drive will kill competition in cloud storage market: Expert

Experts say the cloud storage market will be even more tightly-held after Google announced its long-awaited Google Drive product yesterday, attempting to undercut competitors with a promise of 5GB of free storage for all users as an entry point.

The launch of the product – much of which was developed in Google’s Sydney office – comes as more businesses start using back-up and cloud storage products. DropBox has emerged as the most popular tool for smaller businesses.

But Telsyte research director Foad Fadaghi warns with Google’s entry, the industry mainly comprised of smaller competitors will be under more pressure than ever.

“There are all sorts of businesses that create a market, and then have a larger competitor appear,” he says.

“A good example would be check-ins. Foursquare started it, but without a doubt Facebook is now the biggest platform for check-ins and they use their dominance to control that area.”

“It will be increasingly difficult for smaller players to enter and thrive.”

In a blog post, Google confirmed the launch of Google Drive – a product that has been rumoured since early last year – and confirmed all users would be given access to 5GB of free storage.

The service allows you to work on Google Docs as well, access your files from different devices including tablets and smartphones, while you can also use Google’s search capabilities within the product itself – including image recognition.

“Drive is built to work seamlessly with your overall Google experience. You can attach photos from Drive to posts in Google+, and soon you’ll be able to attach stuff from Drive directly to emails in Gmail,” Google said.

Fadaghi also points out Google has been competitive with its pricing, with 25GB of storage only $2.50 per month, and 100GB only costing $4.99. One terabyte of storage costs $49.99 every month.

“It will become increasingly difficult for others,” he says. “This is a business of scale. The more customers you have, the bigger data centre you have, it becomes more difficult for new players to come into that space.”

Meanwhile, Google has confirmed much of the Google Drive product was created in the local Sydney offices, particularly the Image Search and “Google Goggles” tech that will allow the service to search across images based on a text search.

“Imagine if you’re a small business with thousands of documents stuffed into cardboard boxes and filing cabinets — now you can scan those documents, upload them to Drive, and search across them in seconds. The capability to search text across PDFs, image files, and other types of files is unique to Google Drive,” the company says.

While Google hasn’t built an iOS app for the service yet, it confirms one is in development.