Cloud Computing

Egnyte CEO bets on hybrid platform to vie with Box, Dropbox

On the face of it, California-based file synchronisation, sharing and collaboration startup Egnyte has a tough challenge on its hands, wedged as it is between publicly-traded Box and massively funded Dropbox. But CEO Vineet Jain feels the company has enough differentiation to succeed against its longer-running rivals.

One big area of differentiation is that Egnyte delivers its service both on premises and in the cloud so those companies nervous about putting their data online can rest easy. Taking a hybrid approach remains unusual among startups today but, given the brouhaha over the Safe Harbor rule changes and concerns over spying and data governance and residency, it might have been a very smart move. Jain adds that for companies like UK broadcaster ITV that have huge file sizes or those that might have connectivity issues this is also a more flexible model.

But he also points to another area of differentiation, suggesting that there are weaknesses in Box’s “rudimentary” permissions model that he says can fall down in sophisticated scenarios where there are external collaboration models. That’s perhaps a surprising angle as Box has a strong reputation for its security model but Jain claims it is a vulnerability Egnyte can exploit.

And then he has another joker to play, suggesting that content inspection and data management and analytics could ultimately be a market bigger than the sync/share sector for Egnyte.

Egnyte has raised over $62m on its promise and its focus on the midmarket enterprise. He says he has “never played in the consumer side” and is proud of a B2B track record that includes KPMG and his own startup, supply-chain management firm Valdero.

“You meet a lot of people on the Silicon Valley side that are full of vision,” he says. “I’m not one of those – I’m more on the execution side. The reality is that you need to provide a solution and I felt that while the cloud is absolutely real we had to provide a hybrid offering. As the adoption curve goes mainstream, people need flexibility and choice. At the time I was described as a heretic and I kept saying no, no, no! It’s only in the last three years that the pendulum has swung to the point where people say hybrid probably makes sense.”

About half of his customers are completely in the cloud with Egnyte but many, like Red Bull, appreciate having the option of keeping data on premises rather than being “straitjacketed”.

He sees Box as a company to target (“probably public-enemy number one”) and claims to have whisked away accounts such as IPG McCann and Red Bull. He’s dismissive of Google (“a real SMB solution… it’s never been designed to be a corporate, centrally managed platform”) while he sees Dropbox as “a big player with a huge installed base but it’s very focused on ease of use and productivity”. But it’s not just trash talk: he says he looks at Microsoft with more “trepidation” and suggests the giant has “all the properties to put together hybrid capabilities fiefdoms”.

Jain worries that he will be slapped over the hands for giving too much detail over financials and outlook but, like his company, he clearly likes to share. An IPO in the second half of 2017 is entirely possible, he claims.

The real battle isn’t in sync and share but building platforms, Jain says, and if you can apply analytics and intelligence to content and move from cognitive to predictive then the prizes will be glittering. For the big runners and riders in this highly competitive sector that might be some way away but the race will be worth watching.


Also read:

Box doubling down on security

Dropbox bets on scale, speed and UXP

Aaron Levie’s vertical play


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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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