Google Drive is Almost Here: Should Dropbox Care?

Google just announced a new service called Google Drive.  It is not ready yet, but it's been announced that it is coming.

Google Drive sounds exactly like a service with enormous market share--Dropbox.  Dropbox has become extremely popular for its ease of use and for motivating users with a free offering and the ability to earn more free storage space by referring friends. Through this strategy Dropbox has an enormous installed base and has earned the praise of many for a genius marketing strategy.

So will People Leave Dropbox?

Dropbox has a lot (and I mean millions) of fanatic users.  And Google, well Google is seen as one of those giants that's never really created a large brand affinity in my opinion, other than for its primary product--search.  Google also does not have a great track record with coming out with a great "me too" offering.  Although many do use Google Plus, it has not exactly been a screaming success.

The only reason people would leave Dropbox is if pricing were considerably different.  Let's face it, this is a service targeting the consumer/prosumer and small business markets and people will be price-sensitive.  And this is what Google Drive is banking on. Google Drive plans to offer 5MB of free space rather than the 2GB of free space currently offered by Dropbox.  For paid users requiring more than 5MB of storage, Google Drive is offering an annual fee of $59.88 (at $4.99 per month) for 100GB of storage, while Dropbox currently costs $199 for 100GB of storage. Although Dropbox also has a 50GB plan for $99 per year.

Privacy Concerns

There has already been a lot of discourse over Twitter and the blogosphere about Google's Terms of Service and whether you want to subject your business to "big brother" Google.  According to ReadWriteWeb, "Google does reserve the right to reuse your data, publicly in some cases, and it shares that access across all Google services."  This article goes even further to suggest that if you really want privacy then you should encrypt your data before uploading. 

Well, let's face it, if you have enough concern that you want to encrypt your data before using the Google Drive service, then the service is clearly not for you.  Google Drive, is likely an easy sell for the large embedded base of businesses that use Google Docs.  These users have already agreed to Google's terms of service by conducting business using Google cloud tools.

Stay Tuned

No doubt we will all stay tuned to see how this pans out.  My money's on Dropbox--but they are going to have to drop their prices....

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