Google Eyes Online Storage

The service would allow users to store files normally kept on their PCs on Google's servers and access their files from any computer or mobile device connected to the Internet, an unnamed source told the Journal.

Google declined to comment, though the Internet company could roll out the service early in 2008, the Journal reported.

One Google to Rule Them All?

Rumors that Google has planned a storage service have circulated for over a year. Technically, the Mountain View, Ca.-based company already provides storage through existing services like Gmail, Google Base and Google Docs.

"It's a natural extension of the fact that Google operates some of the world's largest data centers and has unique value-added features that it can add in terms of search and organization of the data," said Kurt Scherf, principal analyst at Parks Associates . "It looks like nice synergy, based on what they're already doing."

"Google has their finger in lots and lots of pies, and this is sort of a natural compliment to some of the things it is already offering," said Gordon Haff, a senior analyst at Illuminata. "It makes sense that if you're going to offer all these things that use storage to tie storage itself in as well."

For Google, which has already made a substantial investment to build its data centers, this service is an opportunity to use its infrastructure as a revenue-generating service, Scherf said.

"It also gets Google one step closer to becoming a full-fledged applications company that is more consumer-facing. That's a benefit to them, as they are definitely pursuing the strategy of offering network-hosted applications, including both software and storage," Scherf told TechNewsWorld.

In addition, Google's status as the Internet's leading search engine will give the service a boost among consumers.

"For consumers, it's the benefit of knowing that the Google name behind the service means that finding and organizing their data is going to be enhanced because Google is really proficient at it," he continued. "It's also an intriguing consumer product -- British Telecom offers a Digital Vault service that is apparently doing quite well with consumers."

The Business of Storage

Providers such as Verizon and Yahoo (Nasdaq: YHOO) offer Web-based storage services. In particular, small businesses that may not have the resources to employ full-time IT professionals could also benefit from the ability to store data on a much larger network.

"Google's offering can be an opportunity for them to have really robust network-hosted storage that the big guys typically get," Scherf explained.

One of the things missing in the emerging online storage market is the ability for both consumers and businesses to back up their data, Haff told TechNewsWorld.

"There are some services out there, but none of the major industry players have thrown their weight behind those kinds of services. There could potentially be a lot of demand if a Google or somebody like that really creates awareness of backups," he explained.

Privacy Questions

Should Google roll out a storage system, it will have to ensure users that the service is safe and secure and also that it has instituted sufficient safeguards to protect users' privacy.

"There will have to be a privacy policy associated with it," Haff noted. "Safety is not specific to Google but a concern surrounding the online storage market as a whole. There are also concerns about possible subpoenas and how they will be handled."