According to a recent ESG survey of 334 North American IT professionals regarding online file sharing and collaboration services and deployment, 84% respondents leveraged the public cloud deployment model. Of these cloud adopters, 97% respondents preferred a hybrid model and 90% of the users placed restrictions on some data being stored in on-premise storage solutions.
Mountain View-based enterprise file-sharing platform provider, Egnyte, was founded in 2008 by entrepreneur Vineet Jain, Rajesh Ram, and Kris Lahiri. The company was founded when the three co-founders were trying to replace a physical file server with something that was multi-tenanted and hosted without realizing that they were building a cloud play. They called the product an on-demand file server.
Today Egnyte is among the leading providers of hybrid file sharing solutions. Egnyte’s platform is able to offer file sharing in multiple forms including over-the-cloud file sharing, private file sharing, cross-office collaboration, and fast local file access. Their platform balances the organization’s need for a secure and compliant file sharing mechanism while ensuring that their users get seamless access to the files on multiple devices. They are said to provide a highly secure service that ensures that the organization’s data is safe even from the National Security Agency’s Prism program.
Egnyte is able to offer such a high level of security by deploying a unique hybrid approach that essentially converts the organization’s file servers into a single storage platform with flexible deployment capabilities. The enterprise is able to decide what files to be stored behind their firewalls on their premises and what to be made available to be on the cloud.
Egnyte values their customer’s belief that a substantial portion, an estimated 60%, of their data is “too sensitive for the cloud”. Egnyte’s products thus take into consideration data sensitivity and ensure that highly sensitive data, primarily financial and R&D data, is not sent to the cloud while other data files are allowed to either be present as copies or available only on the cloud.
Egnyte earns revenues by charging their customers a software usage fee based on the number of employees that access their platform. For very small organizations with less than 25 employees, their basic package of 1 TB storage and standard support with enterprise class security is available at a price of $8 per employee per month. For medium-sized organizations with less than 100 employees, their pricing increases to $15 per month and the option comes with additional features such as 2 TB storage, Outlook integration, and custom branding. They also have higher premium services for larger organizations.
Egnyte does not disclose their detailed financials, but they are said to be trending to revenues of more than $100 million for fiscal 2015 from revenues of $25 million-$40 million in 2013. They are yet to turn profitable and are hoping to become cash positive by the end of 2014.
Egnyte is venture funded so far with $62.5 million in funding from investors including Kleiner Perkins Caufield & Byers, Google Ventures, Polaris Partners, Northgate Capital, CenturyLink, Seagate Technology and FLOODGATE. Their last round of funding was held in December last year when they raised $29.5 million at an undisclosed valuation from Seagate Technology, CenturyLink, Northgate Capital, Kleiner Perkins, Google Ventures, and Polaris Partners. The funds from the round were expected to be used for sales and marketing expansion as Egnyte plans to grow their international presence.
Egnyte is still a very small player in the overall file sharing market, which is being dominated by the likes of Box, Dropbox, and more recently Microsoft and Google. These large vendors have been able to provide a freemium model, thus forcing prices downwards. But Egnyte believes that they will be able to successfully differentiate themselves by focusing on the hybrid nature of their products for mid-level and enterprise customers. Google is putting a lot of pressure in the lower end of the market by offering increasing levels of free functionality. Egnyte wants to play in the higher end where there is more scope for differentiation.