May 17, 2011

How will Dropbox's bad press affect the cloud storage market?

Dropbox, one of the most popular cloud-based storage and data sharing services, has been hit with some bad press relating to its security, and the complaint (filed with the FTC) is that their marketing claim regarding encryption is deceptive. How is this going to play out in the future? To be sure, this is going to hit Dropbox's momentum pretty hard, but what about the broader market for cloud storage and sharing? Does this make people lose confidence in the whole proposition? Or do you feel that cloud storage is still mostly a safe bet?

I think it will light a fire under Dropbox's ass and the rest of the industry to make sure their security practices are fully disclosed and up to par. If they don't get with the program then they will lose market share to a competitor.

They also run the risk of users withdrawing from using cloud based storage altogether, if they feel their information isn't being protected. That might be a short term thing though, since the cloud offers so much convenience. But users are watching and if cloud companies cannot get their act together then some users will opt to withdraw.

In the end, the bad press coverage might end up being a very good thing. Sometimes sunshine is truly the best disinfectant.

I am not aware wheather there is any centralised governing authority or not to issue the licence for public clouds or to monitor their activities, but I strongly feel that it should be there. Anyone, using there brand name, is providing clouds & fascinating people. But no one is concerned that they are dealing with a huge public data & have greater responsibilities. So government shoudl take necessary mesures to make standards to apply for a public cloud licence. There should be pre-check & regular checks for quality of service & security.



An interesting concept. I'm not sure that another layer of bureaucracy and regulation is a good idea. Incidents like this one will shake out the bad performers and force the rest to maintain a quality standard just to stay in business. It would be interesting to hear more discussion about this. What does everybody think, should there be a licensing requirement for running a public cloud?


While it is unfortunate that Dropbox wasn't clearer about its policies, its procedures don't necessarily represent a fatal flaw in the nature of cloud storage services. Instead, it simply suggests that cloud vendors must be clearer about their policies and procedures, and users should be more diligent in fully understanding the rules of engagement.

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