Consider the facts.

IBM revenue from storage systems decreased 11% YoY when it last announced results. Earlier in the year Dell recorded a 13% YoY decline in storage and HP a similar 13%. Even pure play storage providers like NetApp recorded a 2% decline in product revenues YoY.

I am sure there is a combination of factors contributing, the economy and sales execution to name a few.  However, when multiple industry bellwethers record double digit declines over a period, there is a more fundamental shift at hand.

It’s the Cloud, stupid!

I am in the unique position to see this play out everyday.  Over the last few years the cloud has evolved from curiosity to credible business alternative, and adoption has moved from small businesses to mid market and enterprises.  IT likes the idea of renting and having someone else deal with the burden of management instead of lining up a big capex check and dealing with ongoing management.

I see many inflection points where companies leverage cloud for storage:

• Growth: As companies open new offices they are asking– why not cloud?  Can IT provide the productivity and service levels to the business without the capex?  Can IT leverage cloud as a tier to support growth?
• End of Life: The same question gets asked when existing storage goes “end of life”.  I see companies shifting to the cloud or extending current storage investments longer than go through a traditional refresh cycle.
• Mobility: I see sales forces and field organizations moving to tablets as primary devices. With this comes the need to store and access data in a mobile friendly manner, where traditional storage fails.  This is shifting storage to the cloud.

Therefore, it’s not surprising to see enterprise storage sales shrinking.  As cloud becomes mainstream firms are purchasing less from the likes of IBM, NetApp, Dell or HP. I don’t see us turning back.

Does this mean the future is all in the cloud; that it’s doom and gloom for the enterprise storage industry with slow to declining growth and market consolidation?  Pursuing that thought is worthy of a much longer discussion that I will take up in a future post.

One of my favorite snacks involves dunking onion rings into ranch dressing. Aside from being deliciously sinful, it reminds me of recent buzz surrounding BYOD and predictions around the death of the PC. What do onion rings and ranch dressing have in common with the rise of mobile? Quite a lot, actually. Mobile devices are like onion rings  – they get you to what you really want…your “stuff” (files, apps, etc.) AKA the “ranch dressing.”

There are instrumental changes afoot in the enterprise, which are shining a spotlight on mobile and BYOD in a big way. For example, PCs represented nearly two thirds of all computing devices in early 2009 – by 2012, that number had dwindled to one quarter. And employees are increasingly using their mobile devices as a work device and to get to their “stuff” in –and out – of the office. Cisco* issued a report predicting there will be more mobile devices than people on earth by the end of this year.

Simply put, mobile devices are poised to take over the world and enterprises are quickly learning they need to adopt a BYOD policy in order to stay ahead of the curve. The goal is to provision devices with the tools employees need to be productive as well as to secure the work “stuff” in case a device is lost or stolen.

Yet with all the BYOD hoopla, we may be overlooking one of the primary reasons why we need mobile devices – or any device – in the first place. In other words, we’ve got the onion rings, but where’s the ranch?  How do all those employees with all those devices get to their files? Files run our lives. Most of us are hyper-aware of where our files live and when, where and how we can access them – without that access the mobile revolution means very little.

From a business perspective, if employees are going to be as effective, flexible and efficient as their bosses need them to be, they need consistent, secure and fast access to the files they need from ALL of their devices, including their mobile device. And they need this same global view from whichever device they’re using and from wherever they happen to be at the moment.

The problem with files is that they’re all over the place.  Some are on employee PCs, others are on local file servers or mapped drives.  In fact, you can pretty much bet that at some point you won’t be able to access a file you need because its behind a firewall, on someone’s laptop or even a smartphone.

Employees need to have a global view of the files and folders they have permission to access, no matter where those files reside. They also need to be able to use some of those files even when they don’t have a network connection. And they need this same global view from whichever device they’re using at the moment.

Overall, companies are increasingly doing a great job figuring out how to enable employees to use the device of their choice for work. To ensure success, they need to take the next step by making sure employees can securely access the files they need – anytime, anywhere.  Put another way, it’s time for IT to make it easy, safe and reliable for our onion rings to get to as much ranch dressing as we’d like.

*Cisco Visual Networking Index:  Global Mobile Data Traffic Forecast Update, 2012-2017

While reviewing the Egnyte product roadmap with our team last week, we spent significant time discussing security-related enhancements. We add a number of security enhancements to almost every product release and I was curious to find out which of our existing security features our customers actually use.

Egnyte provides an Advanced Authentication option that enables organizations to set password policies such as password rotation, allow “n” number of login attempts before locking an account, two-step login, etc. Interestingly, account administrators ask for some of these features, such as two-step authentication, but appear to rarely enforce usage. In fact, just 1 in 20 people who deploy Advanced Authentication actually deploy two-step login verification! As we dug deep into usage analysis, what became obvious is that customers ask for an increasingly advanced set of security features and controls but rarely deploy most of them.

I think the reason is simple – end users want fast and easy access to their files and any control that forces them to make a few extra clicks (such as two-step verification) gets in the way. It boils down to simplicity vs. complexity – the latter comes naturally with more controls. Striking a balance between the two is the challenge.

Interestingly, one of the often-used capabilities in Egnyte is the ability to run a real-time audit of all login and file access information. Rather than impose upfront controls, which can create friction with users around ease of use, IT administrators take comfort in knowing they have a constant view of what each user is doing – when they login, how many failed attempts, which file they touched and from what access method (mobile, vs. desktop sync, etc.), how many public links have been created by an individual user (if they are allowed to do so) and so on.

As Egnyte moves into working in more regulated industries such as Pharmaceuticals, Oil & Gas and Financial Services, the need for us to add advanced security features continually expands. When I was in New York recently, I met with representatives of one of the world’s largest financial services firm and they asked if we support biometrics for login verification across all access methods, including mobile. This engagement could result in a deployment of up to 350,000 seats and without this capability they could be hesitant to deploy Egnyte. And while this is understandable, the firm is still running on SharePoint 2007 and I wonder how well their existing solution is capable of satisfying this request.

Last week we announced some really cool stuff related to mobile device (including your laptop) controls, which go far beyond remote wipe. I’ll be curious to see how many businesses leverage these new capabilities.  Read more about the new features here.

Today we announced the availability of our new Mobile Data Management suite. As a person who has been notified on two different occasions from two different organizations that a laptop with my personal information was lost/stolen, I’m really excited about this new feature set. In both of my cases, each organization provided me with credit monitoring services and credit reports, which was expensive for them, and really a headache for me. These incidents happened in the era where laptops were considered “mobile devices.” The proliferation of smart phones, tablets, laptops, etc. now compound that exposure due to the sheer number of devices that can access and synch files.

An increasingly large number of employees are bringing their own devices into the corporate environment and want to use these devices to work from wherever they are. Included in this Bring Your Own Device (BYOD) model is the trend of organizations providing employees with stipends to purchase their own computer and bring that computer into the office environment.

Many employees now use three screens (phone, tablet, and computer) and at least two of those devices are often employee owned and managed. This is very different than the old model where the company owned and managed the entire computer while the employee might have some personal apps or data on that device.

These trends are causing a radical shift in how organizations approach device management. PC management tools were developed to manage the entire PC. MDM tools were designed to manage the entire mobile device. BYOD turns these two models upside down.

It’s now coming down to the company managing and securing the corporate “stuff” on the device of choice instead of managing the entire device. In this new management model, companies are concerned with securing the corporate files on the devices, ensuring employees have the right apps, and making sure that only the correct employee/device can access company assets.

And let’s be honest — files are what companies really worry about. Applications really exist to manipulate data or files, whether they’re within an app (Salesforce, SAP, etc.) or outside the app (Word, PPT, Excel, etc.). And more and more of these files are being delivered as native apps via app stores. And if a device is lost or stolen, a company wants to ensure that the corporate files and data are encrypted and can be remotely wiped from the device.

The Egnyte Mobile Data Management Suite enables our customers to encrypt and remotely wipe data on devices natively as part of their Egnyte file sharing and sync solution. While we certainly integrate with MDM for customers who want to use Egnyte in conjunction with their MDM solution, we have many customers who just want to make sure the corporate data is secure and can be removed in the event of a lost or stolen device. Securing access by offering two-step authentication and certificate-based device access further enhances the security of the files by making sure that only the right users with secure devices can access the files in the first place.

All of these features can be configured and managed in a device control panel that provides a single view of all end user devices connected to the company’s account. Administrators can view information about the user, device type, last time of access etc. and can take corrective actions such as disconnecting or wiping a device from the control panel in the event the device is compromised. Users can even view their own devices, allowing for self-service when needed.

BYOD, mobile device access, and consumer file sharing solutions will continue to cause companies to rethink their device management strategy and security policies. Our new Mobile Data Management Suite provides customers with all the tools they need to manage mobile and laptop data security and access, or can work in conjunction with device management tools to manage the full spectrum of applications and data.

Earlier this week, we announced the acquisition of Polish startup Bema Sp. z oo.  It’s a good day when one startup has enough momentum – and capital – to buy another.  It’s an even better day when that acquisition can offer immediate benefits, and that’s the case here. As Egnyte Poland, this new location will enable us to broaden support for our one million customers worldwide and further expand our solution.  It will also provide a great base for us to reach into new markets.

Bema has provided advanced research & development capabilities for our solutions and this acquisition brings these valuable capabilities in-house.  Our plan is to quadruple the team over the next year, taking advantage of the rapidly expanding IT talent pool in Poland. With a population of over 38 million, Poland is the sixth largest economy in Europe and, according to the latest TopCoder ranking list has some of the best programmers in the world – the country is third, just behind Russia and China.

We’re pretty excited about this week’s news and look forward to telling you more about the new team – and their accomplishments – in coming months.  In the meantime, stay tuned for more great news coming from us later this month!