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Tue, Jan 25, 2005 - Page 12 News List

More users turn to online storage

EXTRA ROOM As users begin to fill up hard drive space with images, music and video, companies are seeing growing demand to store files on the Internet

NY TIMES NEWS SERVICE , NEW YORK

For digital pack rats, life is problematic these days. Armed with high-speed connections and digital music players, cameras and camcorders, they are filling their computer hard drives faster than ever.

Buying more disk storage is an option, but a growing number of people are instead choosing to deposit files in an online bank, thereby helping to inject life into the niche Internet storage market that, some analysts said, is on the brink of a growth surge.

"This is definitely a growing market," said Stephanie Balaouras, an analyst with the Yankee Group, a technology consulting firm. "People's storage requirements are going through the roof, the nature of the information we're gathering and sharing now is richer than ever, and sharing it over e-mail just isn't cutting it."

If the market does grow, it will be a sweet validation for companies like Xdrive and Streamload, which were decidedly ahead of the curve when they offered such services in the late 1990s. To collect their rewards, however, they will have to withstand new competition from firms like America Online (AOL).

AOL last month began testing a service called "My Storage," which allows subscribers to upload 100 megabytes of files to AOL's servers, and access that information from any computer with an Internet connection. The service is similar to other data storage offerings, in that users simply click and drag files onto a dedicated folder. When the computer is connected to the Web, the files are automatically uploaded to AOL.

E-mailing files to oneself is an increasingly popular technique for users to back up important files, especially with the advent of services like Google's Gmail, which offers 1 gigabyte of e-mail storage for free. But Gmail and other services limit the size of individual files that can be mailed.

Industry executives and analysts do not have a grasp on the size of the consumer market for digital storage. Apple has 500,000 subscribers to its .Mac service, which includes 250 megabytes of Internet storage for US$100 a year. Xdrive, of Santa Monica, California, said it had 35,000 subscribers who paid about US$10 month for 5 gigabytes of storage. Streamload, in San Diego, has about 20,000 subscribers who pay an average of US$10 a month for unlimited storage. Yahoo does not break out the number of subscribers for its service.

Streamload earlier this month began offering 10 gigabytes of storage for free, but with strings attached -- users can only download 100 megabytes of data a month, which is enough for about 25 MP3 files. Steve Iverson, Streamload's chief executive, said storage was inexpensive but transmitting files was not.

"It costs us money every time we send files to people over the Internet," he said. "So we're hoping this is enough to motivate people to sign up to the paid service."

Brett O'Brien, the chief executive of Xdrive, said he had seen "an amazing acceleration" in the number of users and the amounts they were storing in the last six months.

"People have more files, bigger media files they're accessing from different computers, and a lot of them have fast connections now, so they're looking for services like this," he said.

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