Given all the attention that cloud-based file sharing and backup services get, you’d be forgiven for thinking that all data is sitting up in the ether somewhere. But when it comes to the small and mid-sized business sector, there’s far more organizations using traditional storage approaches than are using the cloud. The humble Network Attached Storage (NAS) device is still a regular feature of many SMB offices – a NAS is attractive for many reasons, given a single location business it’s the fastest storage device, it’s cheap and it gives SMBs confidence that their data is backed up somewhere. But much of the security benefit of a NAS is illusory – we all know how easy it often is to gain physical access to a workspace – after all, drywall is pretty easy to kick a hole into. Add to that the risk of natural or other disasters and you have some real risks storing data on-premises.
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To which the cloud vendors say “eureka!” move it to the cloud. But it’s not so easy, poor connectivity, concerns around costs and other factors make SMBs often wary of cloud-only solutions. Which is why we’re seeing attention for vendors delivering hybrid cloud and on-premises solutions – Egnyte in particular is active in this space, and recently garnered $30M in venture funding to help it scale.
The company is today announcing a partnership with NAS vendor Synology which aims to give mid-sized businesses an integrated NAS/cloud backup solution. The partnership, being announced at CES today, backends the cloud via Egnyte into Synology’s NAS. Thus files can be accessed locally directly from the NAS (the fastest option) or alternative from the cloud regardless of location or device type. For businesses with multiple locations, Egnyte can be deployed across multiple NAS setups to create a quasi central access point.
In terms of how it actually works, users will no longer have to deploy an Egnyte virtual appliance on the DiskStation, rather there is an Egnyte application that runs directly on the NAS. Since the Synology device is on the LAN, file access will occur through a simple mapped drive. Egnyte’s software package will run on the Synology NAS and synchronize files between the NAS and Egnyte’s Cloud solution. The cloud provides the remote access, mobile access and external sharing aspects of the offering.
How Long Term Is This Opportunity?
The real question to ask here is at what rate mid-sized businesses will embrace cloud storage. If I look back five or so years, I remember being adamant that streaming music, video and relying solely on cloud-based storage would be impossible. Connectivity wasn’t fast or ubiquitous enough and functionality just wasn’t there. Fast forward to today and those views seem quaint – even in the relative backwater where I live, connectivity has increased markedly both in quality and quantity, it’s still not enough to have cloud as the default for music or video, but certainly is for general office productivity applications.
Given that the rate of change is ever-increasing, we should expect companies to move to cloud-only approaches at an accelerating rate. This is helps by the fact that many of the employees within these organizations will be relying solely on the cloud (Dropbox, Microsoft SkyDrive, Apple iCloud, Google Drive etc) for their personal storage.
It seems to me that the drivers for enterprise demands for hybrid storage are likely to be longer lasting than for SMBs. Enterprises have significant compliance reasons to demand some or all of their data remain on-premises. They also have massive investments in on-prem storage. A NAS however only costs a few hundred dollars, it’s not enough money to make businesses stop and think about sunk cost issues.
I’m actually very bullish on Egnyte’s opportunity at an enterprise level but I have to say I’m dubious about an integration with a NAS vendor having an real impact on the company. While one could argue that moving a dyed-in-the-wool on-premises shop at least in part to the cloud is a positive step, I can’t see this deal real gaining much traction.
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