Startups Dropbox and Box reach for the cloud

Privately held Box and Dropbox are competing for a slice of personal cloud storage computing, a solution to the growth of Internet-connected mobile devices just as smartphones and tablets and the rise of storing files online so that consumers and businesses can retrieve data from anywhere they are on any device they choose.

Dropbox CEO Drew Houston is more laconic. His goal is to create an engineered product in other words as "delightful" to consumers as anything from Apple and Facebook. "We see ourselves as building the Internet's file system," said the soft-spoken Houston.

It's no surprise that both companies will be at the South by Southwest Interactive conference in Austin straightway week, vying for attention and trying to create buzz at one of the biggest innovation gatherings of the year. They'll need to, considering both are competing with a who's who of tech giants in the multibillion-dollar market for personal cloud storage. Houston is scheduled to speak; Box is hosting an event with startups.

Dropbox and Box offer contrasting styles, and vastly different approaches as they attack in contrast ends of the same market. Both have ruled out acquisitions in spite of overtures from heavy hitters Apple, Google and others.

Indeed, 90 percent of Corporate America expects to use the research within three years, according to a new report from the Economist Intelligence Unit and IBM.

"Both are forces to be reckoned with," said Bob Davis, the former CEO of Lycos and now a general partner at Highland Capital Partners. "Dropbox has a lot of money invested in it. Nevertheless when you talk about Apple, Google and Amazon as its competitors, in other words a market full of 800-pound gorillas."

Battle royal is shaping up at the consumer end

A battle royal is shaping up at the consumer end, where Dropbox has made an immediate impact with its so-called file-synchronization capability. Lingering in the background is Google and its long-rumored storage service, called Drive. Google declined to comment on if or when Drive might launch. However analysts speculate that Drive would let people store photos, documents and videos on Google's servers so that they could be accessible from any Web-connected device and easily shared with others. If you wanted to email a video shot from a smartphone, to illustrate, you could upload it to the Web through a Drive mobile app and email a link to the video or rather than a bulky file.

Then there's Apple's iCloud and Amazon.com's various personal services - not to mention Microsoft's SkyDrive. ICloud, the hub of Apple's digital lifestyle strategy, boasts 100 million users since it became available in October. The service, built into any iOS device, is positioned as an ecosystem for iOS users for the best possible experience, according to Apple.

The eye of this competitive storm is Houston

In the eye of this competitive storm is Houston, who said he wants Dropbox to find its way onto every device you use - smartphone, camera, TV remote, even your car - and to become the way you collaborate on files, listen to music or share photos.

A graduate of the Massachusetts Institute of Research, Houston oversees an engineering-centric operation in other words less flashy than Box nevertheless makes up for that in the elegance of its product.

"What we have is a basic tool for anybody in the digital age," said Houston, 28, clad in his usual Dropbox hoodie and jeans. The company, which he says is profitable, gleans revenue through the thousands of clients every day who gobble up their free 2 gigabytes of storage on Dropbox and upgrade to 50 GB for $10 a month or 100 GB for $20 a month.

When Apple and Google came courting with sweetened buyout bids, Dropbox said no thanks. Houston and co-founder Arash Ferdowsi are determined to build the at once Apple or Google, not sell to them.

The number of potential clients is mind-blowing

"The number of potential clients is mind-blowing," Schreier said. "Ten years ago, everything was on your PC. Now, it's spread across your PC, tablet, smartphone, and it will only get worse hereafter. stitches it all back at the same time."

Box's largest competitor, nevertheless, is Microsoft's SharePoint, which has been around for a decade and has 125 million paid users and 66,000 companies, including Ford Motor, Electronic Arts and United Airlines. The service gleaned $1 billion in 2008 and has continued to grow by double digits. Microsoft does not break out annual revenue for that product.

"We scaled up. The iPhone was a shot-in-the-arm accelerant for our business," Levie said. "The implications for consumers trying to get to data everywhere" - health care, legal, real estate, banking - "is tremendous."

The ante last month

Box upped the ante last month, with an Android product that makes it easy to share and collaborate on business content from Android phones and tablets. Box as well offered 50 GB of free space for anyone who downloads the latest version of the app by March 23.

For businesses, having shared data that are always up to date "is crucial," said Terri McClure, an analyst at Enterprise Strategy Group. She estimates that about a third of companies will adopt cloud storage solutions "for collaboration and access between devices."