Why Google Drive Will Beat Dropbox.com (And All Other Consumer Clouds)

Google Drive vs. the Competitors

The answer is two words: competitive advantage.

How so? I’ll get to that in a minute.

Before we jump into the “why,” I’m going to make a few assumptions to simplify my argument for Google Drive:

  1. You know about the cloud storage industry. (If not, look here.)
  2. You know the major players involved (Dropbox, Box, iCloud, Microsoft SkyDrive, etc.).
  3. We’re not discussing pricing models and comparing who has the most “bang-for-your-buck.”
  4. We’re focusing on strategic positioning.

Drawing the battle lines

I have been a huge fan of Dropbox for years. In fact, it’s saved my life on several occasions. But there’s one big thing that Google Drive is providing that Dropbox just doesn’t offer: simultaneous collaboration. Google Drive allows everyone who is sharing a document to edit it at the same time (like on Google Docs), while providing all the same services that Dropbox and other cloud storage services do (look here, here and here for articles comparing all the cloud storage services).

Simultaneous collaboration is a strong advantage that Google Drive has over some of the other consumer cloud storage services. Coupled with (1) Google’s brand equity, (2) saturation of brand presence, (3) Google apps integration, (4) easy collaboration with other products, (5) massive capitalization capabilities, (6) industry leading software engineering staff and (7) huge customer base, Google Drive is a force to be reckoned with.

But is it sustainable? Will it last? These are the questions that we should always be asking when analyzing a strategic move.

Operation: Competitive Advantage

Now, let’s return to those two words that make or break companies — competitive advantage. Oh, you can achieve short-term success without competitive advantage, but sooner or later someone will call your bluff. Sustainability is the key.

Sustainable competitive advantage is qualified by 4 criteria:

    1. It’s rare. (You can hardly find it anywhere else.)
    2. It’s valuable. (You would be at a loss without it.)
    3. It’s costly to imitate. (The other guys would have to pay a fortune to get it.)
    4. It’s non-substitutable. (Nothing — or almost nothing — can fill its shoes.)

It’s rare and valuable.

If the first two criteria are fulfilled, you have a core competency. A core competency is a bundling of resources (what companies have at their disposal) into strong capabilities (what companies can do with their resources) that aligns well with the wants, needs, and demands of the market. In other words, core competencies are what a company does best and what they cannot continue without. For example, a core competency of Wal-Mart is their ability to run their grocery operations on 0% profit margin when the industry runs at 1% – 3%, allowing them to drive customers into their stores with the lowest grocery prices for a one-stop shop. Brand image, like with Harley-Davidson, can also be a core competency.

Google Drive provides the same cloud product offerings as competitors, plus added-value offerings (like simultaneous collaboration) while promising continued development toward the perfect cloud storage service for its users. Can anyone say “core competency?”

It’s costly to imitate and non-substitutable.

If the last two criteria are fulfilled, then you have a competitive advantage — something that makes your company extremely competitive compared to other industry players. When you combine Google Drive’s product offering with the seven additional Google factors I outlined above, you have a consumer cloud storage service that is rare, valuable, costly to imitate and non-substitutable.

Though poised between consumer and light enterprise markets, Google Drive is set to gobble up a large chunk of the cloud storage marketplace.

Retreat & regroup

At present, companies like Dropbox and Box are re-evaluating their market position (see Box CEO Aaron Levie’s view on the situation).

What do you believe Dropbox (and other consumer clouds) will need to do in order to remain competitive?

Do you agree that Google will be victorious over Dropbox?

Related: Strategy — The Real Money-Maker

Related: Much Ado About No-Bling: Veteran Business Mistakes

Please feel free to leave your thoughts in the comments section below. I’d love to hear from you!

You can also contact me directly via this page.

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2 Comments on “Why Google Drive Will Beat Dropbox.com (And All Other Consumer Clouds)”

  1. Totally agree. I’m arguably more of a brand loyalist then most. Once I find something I think works…I will go out of my way and pay more to continue to use it. I feel like most of the world’s software engineers must be holding their breath everytime the invent something new just hoping the guys at Google or Facebook don’t do it better.

    I predict it will also increase the use of Google Docs (which i’ve always had of a bit of a problem integrating to). If they can compete on price, i’m sold. I agree with all seven of your case points. Personally, integration is a big personal selling point, but you had me at “Simultaneous collaboration.”

    • Seth Mueller says:

      I completely agree, Kortney.

      Brand loyalty can be a beast to compete with. However, there are a few factors that I believe will either make “loyalty” irrelevant or insufficient:

      1. There have been several major mishaps in the past concerning some of the major cloud storage services (Google it for more information).

      2. The fact that I just used the phrase “Google it” and everyone who reads this comment will not only understand what I meant, but most likely agree Google is the premier search engine online, use it as their preferred search engine, and utilize a myriad of Google’s online applications. Google’s brand equity is enormous.

      3. Simultaneous collaboration.

      4. Competitive pricing, and in some cases, a better freemium offer than the other established brands.

      5. In this case, I would prefer to exchange “brand loyalty” with “brand convenience.” I believe product use and choice is more out of convenience than loyalty. I think there is the potential for brand loyalty, especially with Google and Microsoft entering the market. (I’m not addressing enterprise cloud storage/computing. That is a different story.)

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