OpenText Suing Box and Dropbox Buying Readmill - What Does It Mean?

  • 2-Apr-2014

The past few weeks have been abuzz with news in the cloud-based file sharing and sync marketplace. Box filed for an IPO in March, then Dropbox acquired Readmill (h/t David Hobbs), and now OpenText is seeking damages from Box for patent infringement.

This activity strengthens my belief that cloud-file sharing as a simple, stand-alone category of tools is not going to persist for long.

OpenText (who sell multiple content management offerings and has its own cloud-based file sharing service called OpenText Tempo Box) says Box infringed 12 patents in areas such as "System and method for the synchronization of a file in a cache", "Method and system for facilitating marketing dialogues," and "Web-based groupware system." It seems hard to believe these pertain just to cloud-based file sharing and sync capabilities, but OpenText has certainly picked a propitious time to put Box's feet to the fire.

Similarly, Dropbox's acquisition of Readmill shows an industry stretching beyond simple file sharing services. Readmill is a social reading app that allows you to comment, annotate, and participate in discussions while reading a book online on your mobile devices. This gives Dropbox the ability to offer collaborative authoring capabilities such as those provided by Workshare, as well as online document viewing capabilities provided by Box's recently launched "Box View" (which came to Box via its acquisition of Crocodoc).

Cloud file sharing and sync tools have proved immensely popular on the consumer web and are now increasingly targeting enterprise customers. This category of tools got popular due to the simplicity and ease of use of consumer facing services -- such as Dropbox, iCloud, and Google Drive -- but that may not prove differentiating in the future.

These platforms will increasingly become complex as they transition into areas beyond simple file sharing.  As a result, many tools from adjacent marketplaces will start offering these capabilities as part of their overall functionality. We're already see this happening in case of Document Management vendors, most of who have started offering similar services. Similarly, collaboration vendors and even enterprise software vendors (think Salesforce.com) provide similar offerings.

For you the customer, the key thing then is to think long term and evaluate if a stand-alone cloud-based file sharing and sync tool is the way to go.  You have several options here.  We discuss some of these in our recently released advisory paper "Giving Your Salespeople Mobile Access to Key Documents: Strategic Options."

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