Cloud or on-premise? Egnyte lets you choose, one file at a time

Phil Wainewright Profile picture for user pwainewright January 21, 2015
File storage vendor Egnyte doesn't force customers to choose between cloud and on-premise. Instead, it helps them decide on the best location for each file.

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With Friday's Box IPO looming, vendors of enterprise file storage and sharing (EFSS) are in the limelight. Silicon Valley based startup Egnyte has taken the opportunity to launch the addition of a new "content intelligence" feature to its service this week. The new feature can recommend where to store files based on predictive analysis of usage patterns.

I caught up with co-founder and VP of products Rajesh Ram to find out more about the company and its offering to customers.

Egnyte differentiates itself from other cloud-based providers by allowing enterprises to hook up on-premise file stores to its online collaboration service, as well as offering storage choices in the cloud, hosted by Google, Amazon and others. Ram explained:

We chose to have an approach that we like to say is hybrid. It doesn't force you to store in the cloud in order to see value.

This is clearly a different approach from cloud-only providers such as Box, Huddle and Dropbox, who he says count on organizations "to abandon what they have and move to the cloud."

Ram also contrasted Egnyte's approach to acquired competitors that are now subsidiaries of more established enterprise vendors, naming EMC Syncplicity and Citrix ShareFile as examples.

All of the other guys, EFSS is not their sole focus. It's trying to create sales and pull for the products their parent companies were already selling.

The instant you want to have a larger discussion around openness — I frequently visit with customers that are using EMC, NetApp, Microsoft — how you will work with other things becomes very important. What we are emphasizing is that we are open and we are hybrid. We work with whatever you have.

Enterprise emphasis

The hybrid approach doesn't seem to have impacted Egnyte's growth. It posted 70 percent revenue growth in its most recent year and doubled sales in each of the two preceding years, said Ram. The company has previously indicated it expects to reach $100 million in revenues this year and is regarded as a likely IPO candidate before long.

With an emphasis from the start on selling into enterprise customers, Egnyte has not needed the deep funding of rivals who lead with free accounts, said Ram.

We've raised 'only' $62.5 million. We're taking a little bit of a different approach in growing the market.

The go-to-market strategy is similar to that of Salesforce in its early years, with Egnyte typically going in initially for one specific project within an enterprise before being rolled out more widely later on.

We are being brought in with a small to midsize footprint and then if that is successful, companies do tend to roll out on a much broader scale.

Buyers split into two camps, said Ram. IT leads some purchases, while in other cases — typically in service-based industries such as construction and media, line of business managers take the lead.

The overall drivers to me are cost from an IT perspective and access and productivity from a line of business perspective.

Egnyte is frequently brought in as an alternative to traditional file sharing technologies such as file servers, Sharepoint or FTP. In other cases, Egnyte comes in to augment existing file storage resources.

Location choice

Rajesh Ram, VP Products Egnyte
Rajesh Ram, Egnyte

The ability to retain on-premise file stores while managing access via Egnyte is valuable where organizations have privacy or latency concerns, said Ram. Recent publicity of prying by government agencies has led to increased scrutiny of security, privacy and data sovereignty issues.

Most of Egnyte's customers are in north America but the company now has a presence in Europe and recently opened up regional colocation to offer customers an alternative to its existing US-based facilities.

This week's announcement adds an analytics angle to Egnyte's offering, initially providing insights — dubbed content intelligence — based on analyzing the metadata Egnyte collects about usage of its service. Customers will be able to see how their files are being accessed and shared inside and outside of an organization, allowing them to optimize content strategies and workflows, the company says.

For example, a sales manager may want to know what percentage of the field sales team have been using their iPads in the field to access new product information, said Ram.

We're going to be able to take all these interactions they have with each other and the data and surface that to the managers. That gives them more data to help them be more productive.

The product will also provide smart reporting and auditing capabilities for IT, says the company. One potential benefit will be to move infrequently accessed files to cheaper storage, or to ensure that those files that are in use are being served from the most appropriate storage resource. In the future, it's likely Egnyte will also put its data science to work in search and indexing to help users find relevant files more easily. Ram told me:

There's certainly potential to be more intelligent about surfacing things relevant to what you're searching.

My take

Egnyte's hybrid approach opens up a useful niche serving enterprises who want the flexibility to retain some files on-premise while still gaining the advantages of a cloud-based solution for ease of access and user management. It's a halfway house that gives it differentiation both from the cloud-only pureplays and from more traditional storage and file management vendors.

Adding analytics reflects a growing trend among vendors in this sector. The most notable example is Microsoft with its Office Graph technology, which powers its Delve contextual search tool. Huddle CEO Alastair Mitchell when I interviewed him last month highlighted intelligent recommendations as an area to watch in the coming year.

In developing such capabilities, Egnyte is building on a unique strength that cloud players have in being able to collect usage and content metadata in a single place where they can then apply machine intelligence to it. It's a sensible strategy that adds value to the company's services.

Although the file storage and collaboration space often seems overcrowded, there does seem to be room for several significant players to emerge and Egnyte clearly aims to be among them. I would certainly endorse Ram's parting comment to me:

The global market is very large. Some of the numbers even put the global market outside North America larger than the market in North America itself.

We firmly believe the market can support multiple large players. You just have to carve out and go after specific segments appropriately.

Disclosure: Salesforce is a diginomica premier partner.

Image credit: © singkham -

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