Cloud Computing

If 2014 Was the Year of Stolen Consumer Data, Are Corporate Secrets Next?

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Over the past few years, public cloud services have changed the way consumers and businesses think about files. For consumers, apps such as Dropbox make it easy and fun to store and share files with friends and family. At work, these services promise freedom from the tyranny of productivity-killing IT policies (such as email attachment size limits) and antiquated tools (such as file transfer protocol).

Tempering this newfound freedom is a growing awareness that  sensitive information is being stored or shared insecurely. The frequency and scale of business-to-consumer (B2C) security failures should alarm anyone, unless they’re living “off the grid” like John Connor.

Related: Why Competitors Should Collaborate More on Cyber Security Issues

And yet, paradoxically, with each new security breach -- Target, Home Depot, the celebrity iCloud hack, etc. -- we seem more resigned to carrying on our busy digital lives, hoping our privacy and credit scores will survive this game of “public cloud roulette.” For C-suite executives who answer to shareholders, however, the stakes are much higher. Hope is not a strategy.

Cloud-based platforms offer compelling opportunities to drive innovation and productivity. They also present risks that enterprises must anticipate and manage in order to maintain investor confidence. To highlight some of these risks and opportunities, here are three predictions for enterprise file sharing in 2015.

1. There will be an iCloud-style hack in a business-to-business setting.

When employees store business files in public cloud platforms such as Dropbox, they move corporate data beyond the corporation’s reach to a third-party vendor’s care. In 2015, we’ll see a cloud breach in a B2B environment, much like the well-publicized mishaps in the B2C world.

The ripple effects of a high-visibility B2B data breach -- think multi-billion dollar sales pipelines or mega-merger term sheets -- on the file-sharing market will be significant. Data breaches, particularly at the enterprise level, are a nightmare occurrence for C-suite executives. And they can happen anywhere from public clouds to private clouds.

When they occur within a private cloud, corporate IT has at least a fighting chance to “secure the crime scene” and troubleshoot the root cause of the breach.

Related: 3 Lessons From Sony Pictures Cautionary Tale

2. Market consolidation will mean forced migration.

As pervasive as Dropbox is, there are actually more than 120 vendors competing in the fragmented enterprise file-sharing market. Rough sledding lies ahead for many smaller public- or hybrid-cloud players.

When the file-sharing market consolidates, brands such as Google, Microsoft and Amazon will have considerable built-in advantages. Established upstarts such as Dropbox with a solid foothold in the market will be attractive to incumbents seeking market momentum. Microsoft’s 2011 acquisition of Skype to gain traction in the communications market is a useful analogue here.

Market consolidation is a fine thing if you’re an investor who stands to profit from it. But in practical terms, mergers and acquisitions mean billions of files must eventually find new data centers to call home. As any IT director can attest, large-scale data migrations are as vulnerable to mishap as those of the human or animal variety. Considering the rapidly falling cost of DIY file storage, companies caught in the consolidation wave may wonder: “was this trip really necessary?

3. Companies will specialize further.

As the market consolidates, those companies still in business will need to specialize to compete with the household names. We’ll see some players build file-sharing solutions targeted at specific vertical markets. An example would be a healthcare-focused offering featuring connectors that allow doctors, patients and other providers to access and share medical records within a compliant framework.

Specialization will also lead companies that have been reluctant to trust public cloud platforms to evaluate file-sharing solutions that keep data secure. Firms in regulated sectors such as healthcare, financial services, government or education will look for solutions that drive mobile productivity, while keeping files under existing “locks and keys.”

The market for enterprise file sharing is still early in its development. According to 451 Research, only 18 percent of IT departments say their companies actually use paid versions of file-sharing software. By contrast, there are over 400 million end-users of freemium offerings, operating with zero governance over how sensitive business files are shared.

In 2015, smart organizations will define strategies and evaluate solutions for making people more productive while keeping vital information secure.