CX: Good sync product, doomed market

CX is another cloud storage and sync product, like DropBox, SugarSync, Box.net, Bitcasa. It looks like a strong offering, with unique tools for sharing. But this product doesn't matter.

That's because while the market for sync products is going to keep growing for a while, it's a dead concept. And I say that as the biggest user and promoter of file sync software that I know.

Before I get into why I think every product in this category is doomed, let's look at CX pitch in some more detail.

"The real value in content is to collaborate and share to create new ideas faster on any device, at any time," CX's chief marketing officer, Keith Pardy, told me, after CEO Bradley Robertson handed my interview over to him. (Side note: That was not a good sign.)

Just what does that mean? You got me. Look, there are a bunch of technically outstanding products in this field, and the worst of them, from a features perspective, is winning all the accolades. Yes, I'm talking about Dropbox. It's not very flexible and its mobile app is not strong. But it's so blindingly simple and so laser-focused on the one single thing its users want that's its outstripping competitors.

And what users want is not a bunch of marketing doublespeak like "Content's greatest value is when it's shared," and "All media is social." What they want is to drop files in a folder on one computer and to have them show up on another. And maybe also make it easy to share. In that order.

Dropbox does that, it does it reliably and easily, and its users love it. That love is paying rich dividends: Developers are using the Dropbox APIs to hook the product into all sorts of interesting new Web 2.0 products. Dropbox is spreading throughout the Web because it's so elemental. Personally, I'm SugarSync user because I think it's a superior product, but there are times I seriously consider moving to Dropbox because other developers are doing so many interesting things with it.

But Dropbox, SugarSync, CX, and all the rest are zombies. In a short time, I'd guess two years, the world won't need file sync software at all. Because the whole concept of using software to create and store files on a local machine is becoming anachronistic. More of the apps we use store their data in the cloud, so it can be retrieved by a user as he or she moves between computers and mobile devices.

Look at productivity apps: Apple's apps (like Pages) sync via iCloud. Google Docs is all Web-based by nature. Even Microsoft's Office apps (like Word) can save to SkyDrive, and Microsoft's new Office 365 is a direct competitor to the Web-based Google Docs. For new files, who needs local storage for anything but cache and occasional disconnected use?

Many great new productivity apps, like Evernote, don't even expose their local file storage to users at all (unless you dig). These apps--there are others--inherently store user data in Web servers, replicating it to local storage when needed.

Other traditional apps, like Quicken, are aging out, being replaced by cloud-based services like Mint (from the same company, no less).

The last data types to need local storage are media: books, music, photos, and videos. Books are already cloud-stored. Buy a Kindle, connect it to your account, and it downloads your books as you need them.

Music is moving into the cloud rapidly. Apple's iTunes Match (when it finally launches) will go a long way towards freeing users from having to worry about storing their music. Furthermore, more users are moving to leasing access to streaming music libraries (look at Spotify and its competitors).

Photos, then? Yes, you need local storage to keep a photo library. But maybe not for much longer. Again, Apple's leading the way for consumers: Take a photo on your iPhone, and it's synced automatically to all your Apple devices. Apple doesn't provide archival storage for photos yet, but give it a few years.

Videos will be the last data type to tie consumers to local file systems, but I wouldn't bet against falling storage and bandwidth costs for very long. The whole idea of needing to manage local storage is dying.

There will be holdout apps, of course. A lot of them will be products critical to business, like design and engineering apps. There is a big opportunity in providing cloud storage and local sync, at a system and API level, for these apps that don't have it already. Developers will need to revise apps that use old-style file storage systems to take advantage of cloud-based storage with local as-needed sync services.

Fortunately, that's also the long-term vision for CX. "We're the grid," the CEO told me, when challenged on this topic. I believe the Bitcasa team also gets this; I know Dropbox's does. It's in building Internet-based file system back-ends where the interesting battle will be. But the market for end-user file sync and sharing, no matter how fast it grows in the next few years, is speeding straight into a brick wall.

• Product quality: Four out of five stars. Strong, competitive file sync product with outstanding sharing tools. 10GB free storage, reasonable rates beyond that. iPhone, Android apps still in development, and no word on Linux support.
• Business quality: Two out of five. Despite a currently growing market for file sync tools, and even with good features, the steamroller of sync built-in to Web-centric and mobile apps will kill this market. There is potential for a business to be built around back-end file and sync services, but look to Amazon, Google, and current darling Dropbox to be serious competitors in this space.