Thought Leaders in Cloud Computing: Egnyte CEO Vineet Jain (Part 2)

Sramana Mitra: From a user point of view, are you trying to hide that complexity and make it seamless for the user, but the enterprise policy determines whether it’s going to be stored on a public cloud server or a private cloud server. Is that what you’re saying?

Vineet Jain: Absolutely. There are two things that are absolutely essential. I want something simple and easy to use and I want the data closer to the edge from whichever device I’m coming from – whether it’s an iOS device or desktop and whether I’m in the office or outside. So the user should be completely oblivious and transparent to where the data is stored and how it is stored. At the same time, the business entity, which ultimately translates to your IT department or Chief Risk Officer, ultimately have to make sure that they are controlling all the different aspects related to security, performance, compliance needs, and the reality that, in enterprises, huge amounts of data have accumulated over time. It’s not that easy to move that to the cloud. Being able to deploy a solution where that aspect is controlled by them but is completely obfuscated from the end user is of absolute importance. Otherwise, you will not have user adoption.

Sramana Mitra: What is the segmentation of your customers? Where are you seeing the traction? You seem to have significant traction.

Vineet Jain: As I said, it’s an immature space. That also applies to how the total available market size is evolving but we are segmenting the market to two broad macro levels. We are saying there’s the SMB market and then there’s the enterprise market. We used to define the SMB market as anyone who’ll buy five seats to start with, up to 500 seats. We just changed it to five to 1,000 seat opportunities. Anything  beyond that, we treat as mid-market. When you go beyond 5,000 seats, we say it’s the enterprise.

It sounds like an oxymoron but here’s the reality. My thesis used to be that the low end of the market is highly competitive. That’s where a lot of players including Egnyte are playing. A cloud-only solution will suffice. We will be fighting for scraps. Even though it’s highly contested, since the available TAM is getting bigger and bigger, even if we are stuck on having an X% of the pipe, the SMB business is still a healthy going business for our company. But the reality is the SMB side is going to get commoditized especially with the advent of the two big players – Google and Microsoft – wherein they can practically throw away their solutions for free and therefore, the margin pressure is going to be immense. If you have a cloud-only product, even if it’s for the enterprise or SMB, you’ll have that problem, no matter who you are. It’s hard to compete with these two guys on the pricing front.

This segment is part 2 in the series : Thought Leaders in Cloud Computing: Egnyte CEO Vineet Jain
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