SAN FRANCISCO — File cabinets — the digital kind — may be the technology industry’s next big battleground.
Online digital storage, the repository of an increasing amount of our business and personal lives, is changing from being a small part of computing to the core way of selling corporations other kinds of cloud software and services.
Soon, keeping your digital goods will also be the means for tech companies to understand who does what inside a business, just the way they understand consumers by watching what they do on the web.
“Storage is where the stickiness is,” said Jeffrey Mann, vice president for research at Gartner. “It’s how they hold a customer. If they store your stuff, they get to know you better.”
At its annual event for developers on Wednesday, Google was expected to announce several changes to its offerings for business, which include things like corporate email and spreadsheets delivered online, along with storage and videoconferencing.
Google said companies would be able to audit which employees were reading what documents, more easily encrypt documents, and be able to access and work with documents stored in older formats, like Microsoft Office. Part of the plan is to get people who are accustomed to Microsoft socialized to Google Drive, then bring them over to areas like Google’s videoconferencing.
“The first act was about bringing Gmail to work, and personal productivity tools,” Amit Singh, president of Google Enterprise, the company’s corporate computing division, said in an interview. “The second act is about going into big new areas like storage, collaboration, videoconferencing, using any device, anywhere, securely.”
It’s not that companies like Google and Microsoft, along with upstarts like Dropbox and Box, aren’t still keen to hold onto your old emails, brochures, blueprints and office party photos. At the right price, those are still profitable businesses.
Now, however, the companies consider data something that gets stored in large amounts, and continually used, collaborated on and analyzed.
“Cloud storage is a temporary market,” said Scott Johnston, director for product management for Drive, Google’s online storage, document creation and collaboration business. “In the future it will be about elevating productivity: How do we look for patterns? What does it mean if a document is read by 10 percent of the company? What does it mean if you haven’t read it yet?”
It’s a strategy that Microsoft is also pursuing with its OneDrive product. Dropbox, a storage site popular with consumers, and Box, a storage and collaboration site specifically for business, are both also working on ways to turn data storage into something that provides greater insight into how people are working. Dropbox started a business offering last year.
Google is using its global network of computers as a competitive weapon. The company said it would offer all of these services, including unlimited amounts of online storage, for $10 a month. Previously, storage was limited to 30 gigabytes a month, about the data size of 300 yards of books on a shelf, or somewhat less than the information on a standard Blu-ray videodisc.
An offering with fewer features and limited storage, for $5 a month or $50 a year, will remain.
It’s difficult to make a direct comparison among online storage providers, since features vary. Dropbox charges $15 a month for its business product, with unlimited storage, and requires a minimum of five people per company. It also has personal versions that are free or $10 a month, depending on the amount of storage and other features.
Prices at Box range from free to $35 a month. The highest-priced version offers a number of security features, among other things. Microsoft charges $100 a year for 200 gigabytes of storage for personal use. Its business version is $2.50 per person a month, but it is frequently tied to online versions of Office, its programs that include documents and spreadsheets, that cost from $5 to $22 a month.
This kind of corporate computing “is now one of our biggest bets,” Mr. Singh said. “We’ve funded this as a key part of Google’s diversification” from ad-based businesses like search.
“You’ll be videoconferencing with someone, while editing a supply chain document with someone else in Hong Kong, while he watches his son graduate on his phone,” Mr. Singh said, noting, “you’ll need a lot of infrastructure to do that.”
Of course, it’s possible that, despite efforts by Microsoft and Google to make the new styles of collaboration and productivity attractive down at the cubicle level, workers will be overwhelmed by all the new choices. “That is one of the debates,” said Mr. Mann, of Gartner. “If they don’t think about how to use it well, this is an irritating distraction.”
Google Enterprise started seven years ago with basic corporate email and documents, and over time added features like data loss protection and legal auditing capabilities. Enterprise’s revenue is still less than 5 percent of Google’s ad-rich business so it isn’t delineated in the company’s earnings.
Since Google had revenue of almost $56 billion last year, that could be more than $2.5 billion, but it’s still a fraction of the almost $25 billion in revenue from Microsoft’s business division. Most of Microsoft’s revenue in this business still comes from older-style productivity software, too.
Mr. Singh said Google had recently redoubled its efforts to sell to business, noting recent weeklong events in London and Paris that drew “hundreds of customers a day.”
Besides a bigger customer base, Microsoft may have a technical lead on Google in some areas. This year Microsoft announced a product, code-named Oslo, that creates an “office graph,” similar to the “social graph” that Facebook makes to determine friendships and relations. The product, scheduled for release this year, is one of many ways that Microsoft is trying to apply its analytic muscle to the huge amounts of corporate data it helps create.
“Google used to have the moral authority on where the cloud is going, but Microsoft has caught up with Google,” said Aaron Levie, co-founder and chief executive of Box, the corporate storage start-up. “Companies don’t want to deal with Google’s changing strategies.”
Mr. Levie, whose company has filed to go public, said he was not concerned about Google’s price cuts. He uses Amazon’s cloud service for some of his storage, and noted that any price cuts by Google’s cloud business are rapidly met by Microsoft and Amazon, much the way Google follows the other two. Dropbox is built almost entirely in Amazon.
Box, with over 1,000 employees, is also working on features like machine learning, a type of data-centered analysis and prediction that both Microsoft and Google plan to put into their storage systems. “The more attention this gets, the more demand we’ll see from customers,” Mr. Levie said. “For now, it’s still good for us.”
An earlier version of this article identified incorrectly the person at Google discussing cloud storage. He is Scott Johnston, the director for product management for Google Drive, not Michael Johnson.
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