Microsoft's SkyDrive Rains on Cloud Storage Startups

Dropbox and Box have made file access on iOS a pleasure, much more so than iCloud, though in a very different way (you can’t beat, or even use, iWork apps without iCloud on iOS). As speculation about a more integrated cloud-based file system in Mountain Lion tantalizes the Apple Technorati, Microsoft dropped a new version of SkyDrive that delivers a high capacity, cross-platform file storage solutions that works right now.

I found the earlier implementations of SkyDrive confusing. I wasn’t sure what account I was in, or which folders went with which apps, and why I couldn’t see some folders in one place that I could see in another. That confusion has been replaced by the SkyDrive app that fully integrates Microsoft cloud-based storage system with Windows 7, Windows Phone and with iOS and OSX.

Microsoft reduced free file storage from 25GB to 7GB with this release, but if you were already a user, and you download and early, Microsoft is offering a grandfathered 25GB limit. Files as large as 300MB can be uploaded to the service.

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As for apps, SkyDrive storage works with Microsoft’s OneNote for now, and with their web apps (and of course, their full Office clients on Mac and PC). And it also works with e-mail and offers a variety of ways to share files and folders. What isn’t clear, and I’m sure it will be soon, is how widespread the acceptance of this expanded platform will be, and if SkyDrive will start showing up alongside Dropbox, box and Google Docs in third-party apps.

As someone who just went through the migration headaches of Microsoft retiring a product, in my case, Office Live when they rolled out its replacement, Office 365, with a minimum of migration support, you can’t blame some for being skeptical of the staying power of SkyDrive. I will say this, however: SkyDrive looks like an integral part of Windows 8, and Windows 8 isn’t even shipping yet. So I’m guessing, at minimum, there will be several years of support for SkyDrive, and by then, even if you have a 25GB account you will be able to download your entire contents to a micro-drive or just drag it over to some other similar service.

With Microsoft entering this market, at such a low price-point, I think we should be more worried about Dropbox, Box and other cloud storage players than about the staying power of SkyDrive. Apple is already part way in and Google is rumored to be entering the fray soon. The startups had a great idea, and now we’ll see how they do in the harsh light of big time competition. Regardless, the price-per-gigabyte of online storage continues to drop to the point that Sandisk and makers of USB drives will see their markets erode. While some people will still feel more comfortable with a physical object that they own holding a backup of their files, for many of us, putting files on one or more cloud-based services accessible through the near ubiquity of WiFi is comfortable enough.

I’ll report back as I hear more about integration with SkyDrive, and as I discover more about the future plans from the little company down the street from me in Redmond, WA.

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Daniel W. Rasmus is the Founder and Principal Analyst at Serious Insights. He is the author of Listening to the Future, Management by Design and Sketches of Spain and Other Poems. Rasmus teaches at Bellevue College where he teaches Social Media and Personal Branding.