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Big Money Follows Cloud Storage

It seems everyone wants a piece of the cloud storage pie.

Cloud storage provider Dropbox this week received a whopping $250 million infusion from Index Ventures, with new investors Benchmark Capital, Goldman Sachs, Greylock Partners, Institutional Venture Partners, RIT Capital Partners and Valiant Capital Partners also contributing. 

Dropbox is the subject of a cover story in the Nov. 7 issue of Forbes, which recounts a meeting nearly two years ago between founder Drew Houston and Apple founder Steve Jobs, who apparently had an interest in Dropbox. Jobs, who passed away earlier this month after a long battle with pancreatic cancer, warned Houston that Apple was looking to develop a cloud storage service like Dropbox. That service, of course is iCloud, which debuted last week.

And yet another cloud storage high-flyer,, last week received $81 million from, SAP Ventures and Bessemer Venture Partners. The infusion brings's total amount of funding raised up to $162 million, giving it a reported $600 million valuation. reportedly spurned a $600 million takeover bid from Citrix, according to Forbes. Citrix, which now views cloud storage and document management as a key pillar of its desktop virtualization story, instead last week said it has acquired ShareFile for an undisclosed amount.

Like and Dropbox, ShareFile allows business users to store and synchronize files across multiple devices.

"Think of this as iCloud for the enterprise," said Sumit Dhawan, a Citrix Group VP. "iCloud is designed for consumers for sharing their pictures and videos and keeping it online along with your consumer apps. Think of [ShareFile] as enterprise-grade, with all the capabilities that enterprises need, including encryption, control and policy and things like that where you give users the flexibility to have access to their documents and data in the cloud on any device, while at the same time ensuring IT does not lose control but actually regains control so that users are not using unsanctioned ways of sending data to these devices where all of a sudden where you are compromising all IT policies and running into compliance issues."

Dropbox, which says it has 45 million users, is primarily a consumer-based cloud storage service, though individuals certainly are known to use it for business purposes. By comparison, and ShareFile bill themselves as cloud services providers for enterprises with an emphasis on document sharing and collaboration.

ShareFile, based in Raleigh, N.C., launched its first service in 2005 and says it now has 17,000 corporate customers. With the acquisition of ShareFile, Citrix said it will offer "follow-me-data" capabilities, allowing users to access data from any device and to collaborate with others. said it has 7 million individuals among 100,000 enterprises using its service, including an 18,000-user deal with Proctor & Gamble. Next month plans to launch the Box Innovation Network, aimed at enabling developers to integrate their applications with the company's cloud service.

The company said it already integrates with 120 applications from the likes of Google (Apps),, NetSuite and SAP. The company said it plans to use the funding to expand its international presence and to extend its U.S. infrastructure, including the launch of a third datacenter next year. and Citrix say they plan to boost their ISV and partner ecosystems.

For its part, Dropbox believes it has only addressed a sliver of its addressable market of 2 billion Internet-connected users, Houston told Reuters.

While anything is possible, it doesn't look like either of these companies is going to get scooped up any time soon. As larger rivals such as Apple, Google, Microsoft and now Citrix, among others, build out their cloud storage capabilities, it will be interesting to see to what extent and Dropbox upset the status quo.

Posted by Jeffrey Schwartz on October 20, 2011