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If only Scott McNealy knew about MP3 when he was pushing his "network is the computer" idea in the early days of Java.
Taking a new spin on McNealy's vision of universal access and slimmed down PCs, a slew of companies have sprouted up in the last year touting online storage as the next big thing.
Whether they realize it or not, millions of people have become multimedia publishers on the Web, posting photos, music, and video files to share with friends. And while it's relatively easy to set up a Web site these days, storage companies say it's even easier to send a file to a free storage locker and point a friend to the URL.
"As a personal Internet space, we don't specialize in any one type of file, whereas hosting a Web page you're really specializing in the presentation of an HTML file. I-drive deals with all types of files," said Jeff Bonforte, CEO of i-drive, who noted that some people even use the service as an overflow space for their Web sites.
There are already about 20 companies making bids in the online storage market, many of them starting up in the last year. With names like Freedrive, i-drive, x:drive, Driveway, and @backup, it's easy to confuse them. The offerings are remarkably similar, too, ranging from 25 to 250MB storage lockers -- either for free or at a small cost.
But with 10GB drives standard in most desktops these days, and 5GB drives going for about US$100, it may not be a lack of space that attracts users to these companies. Rather, most all of them tout the convenience of being able to access files from any computer with a browser, sharing content with friends, and backup insurance.
Another major impetus for these services is the explosion in online music. A recent study by Media Metrix estimated that 4 million people in the United States listened to digital music during June, and with the average MP3 file hogging up 2 or 3MB, it's no wonder hard drives are filling up fast.
Several online storage companies have moved into the music market by partnering up with content sites MP3.com and Emusic, giving their customers quick and easy access to songs they don't want to store on a computer. MP3.com offered this type of storage service itself until recently, when they passed it off to San Francisco-based i-drive.
Bonforte said his company encourages same behaviors as MP3.com -- "the download and collection of music." I-drive is marketing the service to students and faculty at universities in the United States and currently has about 100,000 users.
Other companies trying to attract MP3 addicts include Freedrive's MyMp3storage.com service, and myplay.com. Once these services have users interacting with their site, they can mine the meta data to use in a host of marketing and advertising schemes.
Myplay's service will take its customers' data and use it in sophisticated promotion and marketing campaigns that benefit both their clients and customers, said CEO Doug Camplejohn. One ripe area is tracking the music tastes of its customers, and then using that information to help the record industry sell music.
If a record label wanted to use myplay for a promotional campaign for Sheryl Crow, Camplejohn could say "Listen, we have 714,000 people with Sheryl Crow tracks in their locker that were played 62,000 times last month. We won't give you their names, but you can do an email campaign through us to offer a free track and 10 percent off the CD if they pre-order."
"It's a huge benefit to the record companies because they've never had that level of targeting before," said Camplejohn. "And it's also a benefit to the customer, because everything is opt-in."
San Diego-based @backup is one of the more traditional online storage companies, and provides automatic, scheduled backups for PCs. In business since 1995, the company was one of the first in the online storage market. CEO Gary Sutton has been able to closely watch the online music business emerge -- his office overlooks the MP3.com headquarters.
"My guess is it [online music storage] is more sound and fury than reality at the moment ... it is not emerging as a huge market yet, but I believe it will. It's just too natural."
Rather than backup every music file that someone receives, Sutton said his company's software can recognize the file and create a link to a previously stored copy.
But one way the @backup service will differ from others is in the area of file sharing. Only the user who owns the account will be able to access stored files.
And what of the companies that allow unlimited file sharing and don't monitor the content for legitimacy?
"I think they're all going to get a visit from somebody wearing a badge," Sutton said.
Sutton said the business models for online storage will split into four areas: backup; data access from anywhere; data migration (transferring data from one computer to another); and application service providers that rent applications as they're needed.
Although the number of companies jumping in the online storage market would suggest it's an easy setup-and-go type of business, i-drive's Bonforte said otherwise, and predicted it will boil down to about five providers in another year or two.
"The good and bad thing about providing drive space is that it's insanely expensive. You think email is expensive, this is 20 to 40 times more expensive per user. Think about bandwidth -- an email is a two kilobyte file. With us it's [often] a two meg [MB] file.... Our initial system probably has as much storage as Hotmail had after two years."
