Found In Cyberspace

Where's that phone number, address, budget, important memo? Everywhere-at least with an online data storage solution.
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7 min read

This story appears in the October 2000 issue of Entrepreneur. Subscribe »

What will computing look like tomorrow? According to Bill Gates, tomorrow's PC will be a wireless tablet that's the centerpiece of a broadband, always-on network of convenient devices, many of which will be used away from home and the office. The network backbone? Surprise, surprise-it's the Internet.

So where does your 25GB-or, by that time, 250GB-hard drive fit in? How about somewhere out there in cyberspace as part of a Storage Service Provider's (SSP) virtual hard-drive farm? In the past 18 months or so, about a dozen SSPs have popped up to give you megabytes worth of free remote storage-in return, of course, for the opportunity to market your eyeballs off.

Don't worry, we're not yanking your data out of your desktop PC just yet. In fact, that may never happen-entirely. But expect at least a portion of yours and your company's data to start moving "out there"-and soon.

"Your virtual hard drive will eventually become as important as your PC hard drive," predicts Ari Freeman, co-founder of, which, along with companies like Xdrive,, and Driveway, offers 25MB to 300MB or more of free online storage and the opportunity to buy more.

Mike Hogan, Entrepreneur's technology editor, can be contacted at

Take My Data, Please

At present, the three main uses of virtual hard drives are for remote backup of the most critical data; go-anywhere, get-anything computing; and collabo-ration among remote (or even local) work-group members.

As your data piles up, so do the consequences of losing it-not to mention the hassle of protecting it. Who in the world has time to regularly back up a 25GB hard drive on the schedule recommended? Even if you do, keeping backed-up data near your PC doesn't protect it from theft, fire, floods or your curious 2-year-old.

Also, many of us are using a variety of devices to compute in a lot more places than home and the office. What about your PDA and cell phone addresses? Your laptop files? Where's the latest version of that memo, worksheet or address being kept, and how can it be synchronized among your different computing devices?

One answer to all these challenges is to keep your data on the Web-at least, your critical and frequently used files-and slice off small chunks as you need them with any browser-equipped computing device. Collaboration is also easier when data is kept in a common location instead of being passed around as e-mail attachments.

Difficult To Pigeonhole

It's tempting to categorize these sites as either consumer or business. But it's a little early for that, because all are growing like crazy and just starting to find their niches. Likewise, their service menus are still being fleshed out, and site performance can be spotty.

Currently, the most free space you can get just by signing up is the 300MB offered by MySpace. com (formerly has signed up 3 million users in the past year by giving current users another 5MB for each new person referred and lesser amounts for the people they refer.

Problems I experienced with the site during a month of visiting included, on many occassions, rough service over a dial-up modem. Also, the free storage area transmits files unencrypted and stores them at a single location with four backup copies at another: Not the best security for mission-critical company data, but fine for noncritical files.

For the 30 percent of its audience that Freeman says are business users,'s new Business Solutions page adds intranet and extranet tools, advanced security features such as 128-bit SSL file transfer encryption, multiple firewalls and sophisticated physical security at its data warehouse.

With 70 percent of its stored files generated by productivity applications, competitor Xdrive is still more business-oriented. In return for a brief registration, you get 25MB of free online storage and can increase that to 100MB by receiving 10MB after your first 10 visits to your personal Xdrive and 5MB for each associate you refer. More aggressive business users can buy up to Xdrive Enterprise, which replaces banner ads with intranet/extranet tools and sophisticated security procedures. Stored files are encrypted, scanned for viruses during transmission and backed up nine different ways. They're stored at one or more of 18 strategically placed sites throughout the United States.

However, I had periodic access problems at Xdrive, as I did with netdrive. com, another very similar business site. When it works, though, is fast (even over a 56K modem), easy to navigate, and gives you more storage more quickly than Xdrive does-100MB more space in exchange for a slightly longer registration.

The major impediment to file use on virtual drives is download time, which may not be fixed any time soon because most customers will be using dial-up modems for the foreseeable future. Even over a broadband connection, Internet data transfer rates will never match PC bus rates.

Out There

That's one reason, providers say, they aren't trying to replace your desktop hard drive. But they don't need to. Increasingly, the stuff you save and share will come from other Web sites. That's why, for instance, offers only 50MB worth of free storage for uploading files from your desktop, but "infinite space" for Web pages captured using its page-clipping tools.

This 4.7-million-member-strong site has partnered with a number of Web sites, like, ZDNet and Homestead, in order to include its Sideload icon on their pages so you can zap Web pages to your i-drive with a mouse click or two. Other i-drive tools make it easy to build shared photo albums and MP3 playlists that you can listen to without first downloading the songs to your PC.

That has made i-drive popular with students. It claims 40 percent of its cus-tomers are businesspeople who use the site for both business and recreation.

That's the lesson learned by similarly oriented Driveway, which started life as Atrieva a couple years ago trying to sell storage to the usual early adopters (enterprises). It found better acceptance among entrepreneurial "professionals"-some 6 million of whom it has since signed up through the usual co-marketing agreements with high-traffic Web sites.

"What the professional typically does," notes Larry Jones, vice president of product marketing for Driveway, "is go to the Web to make vacation travel arrangements and then store a big Powerpoint presentation to work on at home."

His words ring true. I was trolling Microsoft's MSN Money Central recently when I came across a good article on a stock I own. Instead of downloading it, I decided to sign up for Driveway; within 60 seconds, my Driveway registration was completed and the article saved. Of course, that got me only 25MB of storage, but it's a somewhat tortuous path through referrals, file sharing and three different consumer surveys to get 100MB here.

Despite its parsimony, I have to say Driveway is my favorite virtual drive because of the site's performance. That's not a blanket recommendation. The best way to find out which site is right for you is to try them. Sign-up takes five minutes and costs you nothing. You can get around site storage limits by signing up for more than one account or with more than one provider.

You don't have to give up your desktop drive, but at the very least, a virtual hard drive provides a safe place to tuck away copies of your important files and satisfy your growing appetite for Web pages.


These are just a few virtual drive providers who offer megabytes worth of free and rented online storage:
25MB to start; can grow to 100MB free when you make referrals, share files and fill out questionnaires
50MB of free storage for uploading files from your PC, but "infinite space" for captured Web pages
25MB for sign-up and 300MB for a little more personal data; 5MB per referral. Intranet/extranet tools, advanced security and other services available for various prices.
100MB for registration with no upgrade options

25MB to start; can grow to 100MB at 5MB per referral. You will also be given 10MB after your first 10 visits to your personal Xdrive.

Xdrive Enterprise
Fee-based storage, from $14.95 per month for 50MB per user to $149 per month for 1GB per user

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