Google Drive rumors have been around for many years, and they've always conformed to the understanding of "The Cloud" that has prevailed at the time. If it's not like Apple's iCloud, which is integrated into Apple's devices, then it must be like Dropbox, which lives on the Web but syncs through a client. But think outside the box for a minute. Google has new and unique cloud services that Dropbox and Apple don't. There's room for a third, stand-out option here.

Google already has a browser-based file system, Google Docs. It originated as a sort of word processor in the cloud, but it can actually handle and store many kinds of files, such as PDFs, JPEG images, MPEG audio and video, and it'll handle pretty much anything containing text. That does make it a pretty compelling stand-in for Dropbox when it comes to simply storing files.

It even has a nice disk drive icon now, after last year's Google makeovers. Google Drive, indeed:

Are people already using Google Docs as a cloud drive? Spanning, a company that provides backup for Google apps users (not just Google Apps users; free customers, too), took a look into how thousands of people are using it, and it studied their use to better optimize its services. Consequently, it has some insights into Google apps users to share.

Spanning has found that over half of the files in their customers' Docs accounts were not Google Apps-created. They were PDFs, audio, video, photos and Microsoft Office files. By file size, non-Google files comprised over 85% of the stuff people stored in their Docs accounts.

So, at least for the use case of storing files, lots of people are already using Google Docs instead of Dropbox. What Docs does that Dropbox doesn't is allow users to create and edit certain kinds of files. If you use Google Docs as your cloud document service, you're probably using it to make and work on documents, too. That's more than Dropbox can offer, standing on its own. (We'll get to apps built on top of Dropbox in a minute.)

Search, plus Your World

There's a new Google product that didn't exist last time the Google Drive rumors surfaced. It's Google. Or rather, it's Google+. On January 10, Google revealed Search, plus Your World, which threw everybody for a loop. If you don't understand that Google+ is the user-centric backbone of Google itself now, it doesn't make sense that this one side of Google search has stuff from this weird social network in it.

While this early stage of Search+ is definitely about putting Google+ in users' faces, that's not what the message is. "Your World" does not consist solely of YouTube videos shared on social networks. Google's personalized search also tries to figure out what a search means to you, so it can return something more meaningful. It's two modes of search: Global mode searches the indexed Web, and personal mode tailors it to you.

How much more useful would this be if Google's personalized search had your files in it? If your Google Drive contained your documents and music and other local files, they could show up in your personalized search results. If you couldn't remember whether you read something online or in a document you downloaded, Search+ could find both. Now we're giving meaning to the "Your World" part.

Dropbox has search, but it only contains part of what you're looking for when you search "your world." It's more useful as one of many services in a third-party cloud search app like Greplin, which also logs into Google apps and searches across. Google's new social signals run through all its services now, so if it's in your Google cloud, Google search will find it, period.

Dropbox Is A Platform. It'll Be Fine.

Between Docs and Search+, whatever Drive Google eventually ships (whether it's in a few weeks or another X years) will have lots of unique capabilities that make it a different beast from Dropbox.

That's exactly the way Dropbox wants it.

Dropbox turned down insane amounts of money from Apple, because it didn't want to get rolled in as a feature of one integrated system. That's why iCloud doesn't work like Dropbox. Apple wanted cloud syncing that was just there, so users don't have to know where their files are. Developers in the Apple ecosystem can just hook into iCloud. Their applications become Apple-specific. In exchange, they get free marketing in the App Store, and if Apple is feeling generous it features their apps as the App Of The Week or something.

Dropbox said "no" to all that. It wants to be the next Apple or Google, and its valuation seems optimistic about that possibility. Apple's cloud is totally integrated with its devices, using hardware as the platform. Google's cloud is integrated with its services, using the Web as a platform. Dropbox is a platform.

Dropbox lets different clients on different systems read and write to it. Dropbox doesn't have a Google Docs because anyone can build a word processor on top of it. We can build a thousand word processors on top of it, and if they can all read the same file format, they can all work together. Dropbox's platform ubiquity is what it's all about, and that's why Google (and Apple) can't copy it.

Lead photo: AHMAD FAIZAL YAHYA / Shutterstock.com

CloudOn launched its eponymous iPad app Tuesday. Working in conjunction with DropBox, CloudOn lets users access and create MS Word, Excel and Powerpoint documents on their tablets. Unlike CitirixReceiver and other desktop access apps, CloudOn is designed to work specifically and only with Office.

Microsoft originally said it would try to take on Apple's iWork suite of productivity applications by developing an iPad app when the original device was first introduced. By the time it was launched in 2010, however, Microsoft had changed its mind. In November, citing unnamed sources, The Daily reported that Microsoft planned to launch an iPad Office app in the first half of 2012.

"Given the constraints of operating on an iPad and via a cloud-based interface, however, there are some limitations such as an inability to insert outside images into a document via the interface," MacRumors concluded.

CloudOn, formerly known as AppToU, was formed in 2009 by several former Cisco employees. The company, which has a sparse Web site, has attracted several rounds of financing.

The service is powered by Wappwolf, an online “action store” that features a set of Web actions that can process files. For example, it has ready made actions to encrypt and decrypt files, extract text from PDFs, convert documents to PDF, generate QR codes and manipulate images.

The Dropbox Automator works by connecting to your Dropbox account and then defining actions based on which folder you place files into. For example, I connected my Dropbox account and created a folder called Appwolf. Then I defined actions to convert files placed into that folder into PDFs.

You can also do things like upload files to Slideshare, sign PDFs, scrape PDFs to text files and even translate files automatically using Bing Translator. It looks like much of Automator’s functionality just comes from tapping into Web-based services.

You can also automatically upload photos to Facebook or Flickr, add a bug (stamp) to a photo, resize or rotate photos and much more.

A Few Glitches

I found that the service isn’t entirely glitch free. It says that it can covert HTML files to PDF, which it does… but it just converts the text to PDF, so the tags are presented in the document instead of used for formatting. It might be that you need the header information before the service (conf2pdf) properly recognizes the file as HTML instead of plain text.

When Dropbox Automator zips files, it uses a format that doesn’t seem to be recognized on Mac OS X as a zip file. At least not by the Archive Utility that comes with OS X Lion.

It does convert OpenDocument Format (ODF) files OK, when it actually converts them. Of two ODF files I placed in the Appwolf directory, only one was converted. The other was placed in the processed folder that Dropbox Automator creates, but no PDF ever materialized.

But it’s a brand new service and I suspect they’re still shaking the bugs out. The service, at least for now, is free. How will they make their money? It’s unclear, but some of the actions you set up for files may cost money. So it’s possible that the developers will add premium services or charge a fee to other services for connecting users. If it catches on, I do hope that they start providing paid accounts so users can support the service.

The mixing of social gaming and mobile payments, social network alternatives to Facebook, consumer cloud storage and apps that actually make you feel productive (read: not like you're just wasting more time online) came out on top as just a few of the most important startups of this year.

This year's top 10 startups list is a combination of companies that launched in 2011, and others that gained considerable attention. We chose these startups based on how they've changed or disrupted their niches and how they've influenced trends this year and for the year to come. They are listed in no particular order. Take a look after the jump.

By September 2011, Forbes reported that member numbers were up to 600,000 and sales were in the six-figure range. Shellhammer handpicks every product that is sold on the site. It doesn't rely on email blasts or fatigue-inducing daily deals. And unlike other flash sales sites, merchants who sell on Fab.com don't lose money on their products.

To make the e-commerce experience more social, Fab.com launched its Live Feed, which aggregates everything that the site's users are buying, liking, tweeting and sharing about on the Web. The new feature is opt-in, meaning that Fab users don't one day wake up and realize that everyone in their network knows their purchasing habits. As I said in my 2012 predictions post, this social networking-turned-flash sales site will continue to grow. Fab.com's only real competitor in the flash sales market is Gilt Groupe.

Dwolla: Mobile Payments That Act Like Cash

Dwolla sees itself more like Visa than a PayPal type of mobile payments solution, except it uses cash instead of credit. Its main competitor is Square, which offers Square Card Case, except that relies on a user's smartphone and the retailer's iPad cash registers. Dwolla is much simpler.

Users benefit from Dwolla's location and social features, and that it's basically digital cash rather than credit-based money. In that way, Dwolla acts like cash in your wallet, except it's digital and your wallet is your smartphone. And at the end of the day, Dwolla wants to partner with retailers to make this concept work. Its "Grid," which launched back in June, works like Facebook Connect for payments - a user's personal information is stored on Dwolla, not the merchant's servers. If a third-party app wants to connect to Dwolla, it has to first ask permission just like Facebook Connect. That's one way Dwolla makes users feel more in control of their accounts, which are also based entirely on cash. Dwolla transactions are 25 cents regardless of the amount unless it is under than $10, in which case it's completely free. PayPal, on the other hand, always charges 30 cents per transaction plus 2.9% of the transaction.

Zaarly: Mobile Local Commerce Comes To Your Neighborhood

Whereas EBay is entirely bidding based, Zaarly acts more like the local commerce facilitator. Zaarly users don't need to limit themselves to stuff, per se. They can also post about errands they need done and tasks they want someone else to do for them, from "delivering a candle" to "finding an indie music expert to make me feel cool again." The company raised $1 million in its seed round from investors such as Ashton Kutcher, Ron Conway, Paul Buchheit and Chicago's Lightbank, which also backed Groupon. In late October, it raised $14.1 million from Kleiner Perkins and Sands Capital Ventures, just to name a few.

BankSimple Finally Launches, Rebrands Itself As Just Plain "Simple"

While the "location optional" feel of BankSimple seemed great, in the wake of Occupy Wall Street and people transitioning back to local credit unions, the idea of putting all of your money into the cloud felt a bit less appealing. The service finally launched in late September, but raised concerns about the security and potential sale of customer data. In November, BankSimple rebranded to just "Simple" and officially opened for business. It is not actually a bank, but it does work with FDIC-insured banks that handle a user's money.

Instagram: The Web's Second-Biggest Mobile Social Network

Next page: The next five top startups of 2011

Path: If You're Serious About Not Being On Facebook

As Jon Mitchell wrote in his smartly titled post "Path, Timeline and Worship of the Self," the big difference between Path and Facebook Timeline is that Path is closed, though you can choose to syndicate your content to Facebook or Twitter. Some have said that Path is what Facebook should be, a space for real friends not thousands of Facebook "friends" that you've met twice. In the wake of social Web overload, could Path be the way to bring some balance to your socially networked life?

Pinterest: Start Pinning Pretty Pictures And Forget About Socializing

SCVNGR: The Gamification Of Location-Based Commerce

Evernote: How To Organize Your Life

Everything seemed to be going well for Evernote this year until the introduction of its Evernote Hello app, which is supposed to help users remember people they meet in real life by taking their picture. Unfortunately, it's only available for iOS and it assumes that the user is willing to hand over his or her phone to a stranger. ReadWriteWeb's Joe Brockmeier notes that this could be awesome, if "Evernote is using Hello as a prelude to acing contact management features into Evernote." If it does, this could be a great way to manage contacts. Even better, it could collaborate with LinkedIn's CardMuncher iPhone app to sync everything up. Next up, Evernote wants to conquer the world of "Read Later" apps; it just added its "Clearly" clean-reading extension to Firefox. We named Evernote one of the top 10 consumer Web products of 2011. It is certainly one to watch in 2012.

Dropbox: Consumer Cloud File Sharing At Its Best

Do you agree with our picks? Did we miss anything? Let us know in the comments below.

This year there were a number of worthy contenders for Best LittleCo. Square, Evernote, Flipboard, BetaWorks, SoundCloud and Tumblr (again) have all had cracker years. So our winner must be something pretty special, right?

Other startups were earlier to launch with a cloud service for files, but since launching to the public in September 2008 Dropbox has gone from strength to strength. 2011 has been its best year yet, as millions of consumers turn to online file management to access their business and personal files across devices.

We also named Dropbox as our #2 Consumer Web Product of 2011, behind only Google's Chrome browser.

Dropbox has 87 employees, according to its About page. The company was founded in 2007 by Drew Houston and Arash Ferdowsi, two MIT students "tired of emailing files to themselves to work from more than one computer." It now claims to have 45 million users across the globe.

Earlier this year, Dropbox was named 5th in a list of the The World's Most Valuable Startups, with an estimated $4 billion value. The only 4 companies ranked above Dropbox were (in order of valuation): Facebook, Zynga, Groupon and Twitter. None of those 4 would qualify as a LittleCo, using our benchmark of 100 employees.

Why Did Dropbox Become So Popular?

Dropbox has successfully tapped into two huge trends on the Web over the past few years:

1. People now access the Web on multiple devices; including the traditional PC, smartphones, tablets like iPad, Netbooks and more.

2. As Web-connected devices proliferated, it became increasingly useful to use cloud computing services for file management.

Other startups have attempted to tap into this huge market opportunity as far back as 2006, when ReadWriteWeb named Sharpcast (now known as SugarSync) as our Most Promising Company. Dropbox also competes with the big cloud computing players, such as Microsoft, Google and Amazon.com. Its smaller competitors include the afore-mentioned SugarSync, as well as Box.net, Ubuntu One and Wuala.

Although Dropbox is the market leader, it still has work to do. Our ReadWriteCloud team recently compared Dropbox's collaboration features with competitor Box.net - and found Dropbox wanting. Dropbox has also experienced some growing pains this year, with security issues and an unpopular change to its Terms of Service.

Overall though, Dropbox has firmly established itself in the minds of millions of consumers as the number one online file management service. Its regular users (including this author) love Dropbox's simplicity and intuitive user interface.

Do you agree with our choice for Best LittleCo of 2011? If not, tell us in the comments who you would've chosen.

One of the leading Internet companies of this era is essentially a hard drive in the cloud. Dropbox, by some measures the world's 5th most valuable startup, makes it easy for you to sync files across devices. There are other, similar services too. Or you can go completely virtual by using an online office suite like Google Docs. In this article we outline some of the ways that you too can use the cloud to store your files.

I polled my Google+, Twitter and Facebook followers about which cloud services they use for file storage. Many of them mentioned Dropbox. Here's how I myself use Dropbox, probably a fairly typical use case:

I have a group of mainly business-focused folders on the hard drive of my desktop computer. Prior to Dropbox I would either send them to my laptop computer via FireWire (a high speed cord that connects one Mac computer to another) or by emailing important documents. This was both inefficient from a time perspective and also meant that my two computers quickly got out of sync.

Now, I simply connect those key folders on my desktop hard drive to Dropbox. This does two things: 1) it essentially backs up all of those files in Dropbox's cloud; 2) it enables my laptop to download all of those files from my desktop, using Dropbox as the middleman. I can also choose to download the files onto my iPhone and iPad, although because of limited storage I simply download individual files from Dropbox as I need to.

The beauty of Dropbox is that you're using the cloud as both a backup for your files and a conduit to sync files across devices. You don't have to rely on the cloud though, for example when you're offline. That's because the files are optionally downloaded onto the local machine, which I do on both my desktop and laptop (but not for my phone or iPad).

You get 2GB of storage for free on Dropbox, then premium plans start at $10 per month for 50GB.

Google Docs

I use a mix of desktop and online office software, although still with a bias towards desktop software for the heavy stuff (such as monthly statistics in an Excel spreadsheet for ReadWriteWeb). But it's possible these days to go completely Web-only for all office software. Google Docs is the most popular online office suite.

John Pozadzides, the CEO of web analytics software Woopra, told me on Google+ that "ALL new documents I create are done in Google Docs unless there is a specific requirement otherwise." He cited the collaboration features of Google Docs, noting that more than 80% of his documents are shared with others. But the key benefit to Google Docs is that John can access his documents "from anywhere there is a Web browser."

So while Dropbox is the best of breed among file sync and storage services, if you want to take it one step further you can attempt to cut out the middleman completely and create and consume files within Google Docs (or other online office solutions like Zoho and ThinkFree). It's not yet possible to completely eliminate local files. Colin Lovett told me on Google+ that he uses Google Docs and Photos "for everything except my raw audio and video files," for which he uses Dropbox to store.

Other Options

It's worth mentioning Evernote in this discussion, although it doesn't specifically market itself as a storage and sync service. It started out as an online notes tool, but now allows you to upload many different file types - images, audio, documents and more. I'm a daily Evernote user myself (I pay for the premium service), but so far I use it mostly as an online notes and planning tool.

Other options include SkyDrive (Microsoft's solution), CloudApp (a trendy Mac app favored by RWW hacker Tyler Gillies), Bitcasa (which is getting a lot of Valley hype for its "infinite storage"), SpiderOak, Box, Wuala and SugarSync.

If you're a developer or more technical than the average bear, check out our recent ReadWriteCloud post: From DevOps to NoOps: 10 Cloud Services You Should Be Using. Or you can build your own Cloud Drive!

Which Cloud Service(s) For Files Do You Use?

Whichever solution you go with, cloud storage of files is increasingly becoming a necessity for consumers. Even if you only have one personal computer, chances are you use other computing devices - at work, school or maybe even the good old Internet Cafe.

If you're new to this, I'd advise to give Dropbox a whirl. 2GB of storage is plenty to get started on. If you're an old hand already, let us know in the comments which tools and systems you use.

To get that amount of storage from iCloud, users have to fork over $100 per year to Apple. Of course, one thing third parties like Box and Dropbox cannot provide is the seamless, cross-device syncing of things like contacts, calendars, reminders and Web bookmarks, nor can you easily use it to remotely back up your entire device in the cloud, as iCloud allows. Instead, Box has its own iOS app from which cloud-based files and folders can be managed.

More directly, the move can be seen as a shot across the bow against Dropbox, the popular, consumer-oriented file-sharing and backup service whose free plan stores up to 2 GB of data. For a 50 GB plan, Dropbox customers have to pay $10 per month, or they can double that storage for double the price.

Box's promotion is good for the next 50 days, but once redeemed, the data is good for life. To activate it, simply download the latest version of Box for iOS and log into (or create) your account.

But let's face it, this valuation of Dropbox cannot be relied on. That $4 billion is mostly derived from fat cat VCs competing for a hot deal. It's far more important to ask: who is using Dropbox currently and is there anything in the use cases that justifies such a high valuation? So I asked the tech-savvy RWW community just that.

1. People now access the Web on multiple devices; including the traditional PC, smartphones, tablets like iPad, Netbooks and more.

2. As Web-connected devices proliferated, it became increasingly useful to use cloud computing services for file management.

Startups have attempted to tap into this huge market opportunity as far back as 2006, when ReadWriteWeb named Sharpcast (now known as SugarSync, a Dropbox competitor) as our Most Promising Company. So Dropbox isn't the only file sync service around. Some of the other products mentioned in my informal survey were SugarSync, Box.net, Ubuntu One and Wuala.

However it's Dropbox that has emerged to become the leading file sync service, since launching to the public in September 2008.

Daily Users

Most of the feedback I gathered from Twitter, Google+ and Facebook indicated that Dropbox is a product that is used not only daily, but multiple times a day. That's always a great sign for a startup.

Mickey Mellen is a heavy Dropbox user. Mellen told me via Google+ that he uses Dropbox about 100 times every day. He has over 40,000 files in his Dropbox account, totalling over 30 GB in size. "It's simply my primary drive," he said. "Every file of mine goes in there, so that every device of mine (desktop, laptop, netbook, tablet, phone) has access to it."

Tori Cushing said that she uses it daily, "all through the day." She has "just about all of the folders on my computer on Dropbox."

Dylan Bland is another daily Dropbox user. He uses it as a "default directory for a lot of important saves." He added, "we also use it at work to share common files."

Campbell Yule tweeted that he uses Dropbox "all the time, many, many times a day." His main use case is "for file sharing across locations."

ReadWriteWeb's own Jon Mitchell is a heavy Dropbox user. "Nearly all my primary workflows sync across devices using Dropbox," Jon remarked. Writing is of course Jon's occupation and he told me that he works "entirely in .txt files that save to a Dropbox directory that I can get to and work on from any device."

David Acklin said that for him, Dropbox is "always running, always backing up."

Both Personal and Business Use

The responses suggested that Dropbox is being used for both personal and business file sharing. Michael Schade uses it to store personal files, although he said that many of his business files have "moved to Google for easier collaboration."

But Dropbox is getting a lot of uptake for business collaboration, too. Ben Kepes said that he uses Dropbox multiple times a day, for "collaborating on docs across timezones and geographies."

Professional photographer Gareth Robins uses it every day for a variety of uses, including a shared folder with his accountant and another with his photographer assistant. He also uses it to deliver photos to his clients. He puts the photos in a Dropbox folder and shares the link with them.

My friend Emily Davidow told me on Facebook that she uses Dropbox "regularly for multiple shared projects."

Less Frequent Users

Others use Dropbox less regularly. I myself am in that camp. I currently use Dropbox to save files (mostly PDFs) that I want to read on my iPad. However I'm interested to expand my usage, now that I've heard how others are using it.

RWW writer (and part-time musician) John Paul Titlow tweeted that he uses Dropbox about weekly, "for household file-sharing, exchanging sound clips w/ bandmates and sending very large files occasionally."

Kim Sherrell told me on Google+ that she uses Dropbox "once in a while." She noted, "I'm reluctant to share resources when I'm editing or working on big files."

Workflow & Ease of Use

As Brian Ries rightly pointed out, how much you use Dropbox depends on how integrated it is in your workflow.

The ease of use of Dropbox was another factor that people commented on. "Dropbox just works," remarked Bill Kirby.

That's an important point, because syncing in the modern Web is too often an irksome process full of glitches. Indeed ever since I "upgraded" to Mac OS X Lion, I've noticed that home sharing (Apple's way of syncing your iTunes account across devices, among other things) has been very buggy.

Like any startup that is scaling up fast, Dropbox has its challenges. Dave Parry, an Assistant Professor at the University of Texas, blogged earlier this year about privacy concerns. But overall, the feedback I gathered from Twitter, Google+ and Facebook was overwhelmingly positive. Many respondents said that they use Dropbox multiple times a day, for both business and personal file sync and sharing.

Big Market - And So Far Dropbox is Delivering...

File sync and sharing is a potentially huge market, which we identified back in 2006 when we named Sharpcast as our Most Promising Company. Dropbox has become the leader in this space, due to its generally frictionless service and excellent usability. Indeed, its usability across multiple devices is probably what has kept it one step ahead of cloud computing giants, such as Amazon, Google and Microsoft.

Whether it's worth $4 billion is another matter. Judging on the product alone though, Dropbox has carved out a great niche and it has a good chance of becoming a very valuable company. Let us know what you think of Dropbox's value, in the comments.

The new mobile-optimized layout is very similar to that of Dropbox's native apps for iOS and Android, except that it of course works across platforms, including Windows Phone 7, Android and iPhone. It displays nicely on the iPad as well, but doesn't quite compare to Dropbox's native iPad app, which is specifically optimized for the tablet.

The team plans on working in support for more devices, the ability to manage referrals and various enhancements to file sharing and management.

Dropbox is known to get the most out of their interns, who operate much like full-time team members and are allowed to work on any project they choose. This has recently included things like redesigning their Android app (coming soon), coding signficiant upgrades to the product's iOS apps and, in one case, creating a code obfuscator "to help make sure Dropbox's secret sauce stays secret."

Just before I started writing this, I was attempting to sync data from the online note-taking app Evernote. I had made some notes on my iPad Evernote app while in a cafe, where I didn't have Internet connectivity (I'm a premium subscriber to Evernote, so I have offline access to my data). When I attempted to sync up that content to my Evernote desktop app in my home office, it didn't immediately update. I refreshed... then again... no sync. Perplexed, I moved onto another activity and then checked again 5 minutes later. By then the changes had synced up, but the delay was disconcerting.

However last night I could not get a friend to show as 'online' in imo.im, despite having been chatting with that person moments before using Facebook on my PC. After struggling with this for 5 or so minutes, I switched to Friendly and managed to re-establish contact with my bemused friend. That may've been a bug in imo.im, but regardless it was another example of things not syncing as they should.

How Syncing Across Devices Works

Syncing usually involves using the Internet as the central 'hub' - with apps and/or devices being 'spokes' that connect to the hub. Evernote's approach is fairly typical:

All of your notes (unless stored in a local -- that is, not synchronized -- notebook) are synchronized to Evernote on the Web. Evernote's servers house a copy of all synced notes because all of the Evernote client applications, both mobile and desktop, connect to Evernote on the web to get the latest version of the notes for each user.

Evernote's service and software applications are arranged in what's called a "hub-and-spoke" configuration. This means that every single sync operation that takes place will involve Evernote on the web (the "hub"). For instance, if you initiate a sync from Evernote on your desktop computer, any new or updated content will be uploaded to Evernote on the Web so they'll be ready to be downloaded when any of your other devices initiate a subsequent sync.

Specialist Sync Services

So far we've been talking about sync as a feature of web services, but there are also specialist sync services. Dropbox is probably the most high profile in the consumer market, but another is Sharpcast, which ReadWriteWeb named as our Most Promising Company of 2006.

We chose Sharpcast back in 2006 because it was "solving a big problem (syncing data across Web, desktop and other devices) and also is an integral part of many different trends that will be popular in 2007 and beyond - mobile, rich media, a world of multiple devices, and more."

While we were right about the trend towards multiple Web devices - and that was before the iPhone was unveiled in January 2007 - things haven't quite panned out for Sharpcast. It's not because syncing became unnecessary. In fact it's a must-have feature in all apps that work across devices, particularly those with an offline component such as Evernote and Instapaper. Sharpcast had an opportunity to establish itself as the sync glue for other web apps, but it didn't manage to pull that off. Instead, the likes of Evernote and Instapaper built their own sync solutions.

Sharpcast is still plugging away, but now it competes with Dropbox and others as primarily an online storage service. Sync is one of the main features, but it's no longer enough on its own.

Sync Remains a Problem

Evernote is one of my favorite apps (here's an interview I conducted last year, which outlines how the product was created) and most of the time the sync works well on it. But syncing in this day and age should be completely hidden from the user. I notice some kind of sync issue with Evernote every week or two. It still has work to do.

More generally, I am constantly coming across issues where things don't sync up properly between devices. Skype has probably been the worst offender for me over the years - for example, adding someone as a Skype contact on one computer and then not seeing that person display when you log into another computer. To this day, I continue to come across that 'bug.'

What have been your experiences of sync? More importantly, have you come across any promising new sync solutions?

At issue, in part, were Dropbox's Terms of Service that stated that "all files stored on Dropbox servers are encrypted (AES-256) and are inaccessible without your account password." Dropbox recently revised these terms to read simply "All files stored on Dropbox servers are encrypted (AES 256).

The problems with Dropbox's security claims first came to light last month when PhD student Christopher Soghoian published information revealing that Dropbox employees could indeed see the contents of users' files. That's because, in part, Dropbox makes sure that files uploaded to the storage site are de-duplicated. In other words, when a user stores a file on Dropbox, the system checks to see if that user or others have already uploaded that file. If that's the case, then Dropbox simply links to the original file.

As Soghoian points out, other storage sites like Spideroak and Tarsnap do encrypt users' data with a key known only to that person, rather than to one key known just to Dropbox. The trade-off for better privacy and security here is duplicate files - in other words, taking up more storage space. But Dropbox has presented itself as offering customers security and cheap storage, something that the complaint says was actually misleading and confusing to customers.

Soghoian a PhD Candidate at the School of Informatives and Computing at Indiana University filed the complaint with the FTC last week, claiming that Dropbox has misled users and that clarifications made by Dropbox are insufficient. As he noted in his blog post that preceeded the claim, "While the decision to deduplicate data has probably saved the company quite a bit of storage space and bandwidth, it has significant flaws which are particularly troubling given the statements made by the company on its security and privacy page."

Will Dropbox Customers Care?

For its part, Dropbox spokesperson, Julie Supan says that "We believe this complaint is without merit, and raises issues that were addressed in our blog post on April 21."

Although the issue still has to play out before the FTC, there's the chance that it will also have repercussions among Dropbox customers. But as Soghoian noted in his own blog posts, "it would be easy for anyone but a crypto expert to get the false impression that Dropbox does in fact protect the security and privacy of users' data." Whether or not Dropbox customers will care that the encryption isn't quite what was advertised remains to be seen.

I've been meaning to do so, particularly following the receipt of my first bill for the service, amounting to a whopping $0.09. I have 40 some-odd GB of music that I'd like to store (and be able to play) in the cloud, for example.

But the introduction of the Cloud Drive has made me rethink my plans. Should I move my files there? Here are some of the pros and cons:

1. Easy (or Easier, Perhaps) Uploader

Amazon S3 has a pretty lousy interface, and it uses terminology that's likely confusing to many non-developers. S3 contains "buckets" to store "objects," not "folders" to store "files" for example. Although you can set the privacy level of each individual file, creating a bucket policy that governs the whole thing is more difficult.

The Cloud Player, on the other hand, scans your hard drive looking for music files. You do still have to select the files and folders to upload, and there's no auto-syncing. And the uploader tool, alas, requires Adobe Air. You can also access the Cloud Drive directly and upload files that way.

2. Cost per Gigabyte

Amazon Cloud Drive is offered at a pretty competitive price point, something that since its release has prompted several other mp3 storage services, like mSpot, to tweak their pricing. The first 5 GB of storage on Cloud Drive are free, and Amazon has a special offer right now where the purchase of an mp3 album will boost you to the 20 GB storage level, free for your first year, then $20 per year after that. As you need more storage, the cost rises accordingly: 50 GB, for example, will run you $50/year.

At first glance, that price is even competitive with Amazon S3. Up to your first terabyte, S3 costs you $.14 per gigabyte per month. To store 20 GB of data on S3 will cost you $33.60 for a year. (I have more to say about that calculation below, however.)

3. Free Storage for Amazon Mp3s

The final plus in the Cloud Drive column is the free storage of music files you purchase from Amazon. Unfortunately, it isn't retroactive and doesn't include any of the music you've already bought from Amazon. That's a bummer for me, as I made the switch away from iTunes to Amazon a while ago when I found I was able to get DRM-free music from the latter. But from here on out, users who save their Amazon purchases directly to Cloud Drive, rather than downloading them, will not have those files count against their storage costs.

The Cons of Cloud Drive

1. It's Not Pay-as-You-Go

One of the benefits often touted of cloud computing is the metered pricing model. You pay as you go, so if you need 34 GB of storage one month and then 24 GB the next, your bill reflects that at a per gigabyte level. With Cloud Drive, however, you pay a set fee, and in both of those cases, you'd have to purchase the 50 GB storage plan.

2. No Sharing, Syncing, External Linking

There's been plenty of talk about how bold this move is by Amazon, creating a Cloud Player and a music storage site without the blessing of the record industry, but Amazon insists it's just created an external hard-drive. Unfortunately, it's an external hard-drive that doesn't sync files to the desktop, as the popular storage tool DropBox does.

Also, Cloud Drive doesn't give me control over making certain files public or shared. And that means I can't, as I currently do now with the files I store in S3, link to any photos, songs, or documents I store there.

3. Terms of Service

If you read the Terms of Use for Amazon's Cloud Drive (you guys do read Terms of Services, right?), you'll see that Amazon retains the right to access your files and disclose your account information (although it doesn't say to whom).

Section 5.2 reads: "You give us the right to access, retain, use and disclose your account information and Your Files: to provide you with technical support and address technical issues; to investigate compliance with the terms of this Agreement, enforce the terms of this Agreement and protect the Service and its users from fraud or security threats; or as we determine is necessary to provide the Service or comply with applicable law."

I'd really rather not, thank you very much.

So I'm Sticking with S3... For Now

So yes, the introduction of the new service did make me think about my cloud storage plans. But as it stands, I'm holding off on moving my files to Amazon Cloud Drive - for now. For its part, Amazon does continually roll out improvements to its developer-oriented cloud offerings, so I'm hopeful that we'll see the same for this consumer product (including, perhaps, the ability to migrate my files without having to jump through some "download everything then re-upload it" hoops.)

Because until we see more features and better pricing, Cloud Drive is not quite S3 and not quite DropBox.

With the updated version of Dropbox installed, iPad users can access all their stored files and folders without having to sync files via iTunes first, as is necessary with Apple's own iWork suite of office applications. Those files can then be viewed in Dropbox itself or opened using third-party software programs .

Dropbox: Your Files, Available Everywhere

For those not experienced with Dropbox, it's an online file storage service which functions like a hard drive in the "cloud," meaning your files and folders are available from any computer with an Internet connection. Ideal for mobile devices with limited storage, Dropbox has become increasingly popular over the years as it eliminates the need to actually carry all your files with you on the physical media in your smartphone, netbook or other mobile Internet device.

In addition, Dropbox's file synchronization capabilities mean that you can manage your files from any Dropbox desktop client application, where files are stored locally and synced to the cloud, or from its Web and mobile interfaces. No matter where you make a change, that change is duplicated everywhere else. The service also lets you access prior revisions of documents and provides sharing features.

On the iPad

With the latest update to the Apple mobile application, Dropbox users now have access to an app that is, in our opinion, an improvement over Apple's own idea of how files should transfer between devices. The beauty of the iPad is that everything you need is available from the slate computer itself: the iTunes Store, the iTunes App Store and, of course, the Web. App updates are available over-the-air too, so there's very little that actually requires you to plug in your iPad to your Mac or PC and sync it like the giant iPod Touch that it is.

One major exception to the iPad's untethered beauty is its document synchronization process. With Apple's iWork - an app The Wall St. Journal's Walt Mossberg dubbed "a serious content creation app that should help the iPad compete with laptops" - the only way to move files from computer to iPad is via an iTunes sync. Alternately, users are forced to deal with workarounds like emailing files to themselves, for example, or uploading them to a website for later download.

Dropbox eliminates those cumbersome solutions and in their place delivers a high-resolution, elegant app worthy of the iPad itself.

You can view files right in Dropbox whether those are word processing documents, spreadsheets, slideshows, photos, videos, music, PDFs or other files. And your favorite files can even be synced for offline viewing.

If you want to open a file in an external application, Dropbox supports a growing list of compatible partner applications like QuickOffice, Documents to Go, Fuze Meeting, Air Sharing HD and others.

The basic Drobox service offers 2 GB of free storage. Power users can upgrade to Pro 50 or Pro 100, which provides 50 or 100 GBs, respectively, for a monthly fee.

You can download Dropbox for iPad here.

Box.net has been around for quite a while, but is still one of our favorite places to store documents online. Thanks to its integration with numerous online services, including Gmail, Zoho, picnick, and Scribd, box.net can not only store all your documents, but can also function as the hub of your virtual office.

One other nice feature of box.net is that you can share your files and folders with 'collaborators,' which makes it a good service to exchange files within a small business or among friends.

The storage limit for the free accounts is 1GB, which is plenty if you mostly exchange text documents or spreadsheets. Paid accounts start at $7.95 a month and include more advanced features, including 5GB of storage, a versioning system, mobile access, and 24/7 phone support.

Live Mesh

The online storage component of Live Mesh is only one part of Micorsoft's latest venture into cloud computing, but it is also one of its most compelling features at this point. Live Mesh gives you 5GB of online storage and an online desktop that looks a lot like Windows Vista. You can upload any type of file to Live Mesh, but you cannot edit any of your files through the online desktop. In the future, though, we expect Microsoft to start adding more of these features.

One of the main reasons we like Mesh is because it constantly watches for changes in the folders you are synchronizing to it and updates them automatically. In addition, you can share folders with friends, allowing you to collaborate on projects.

Live Mesh works on both Windows PCs and Macs.

DropBox

Few online storage services integrate with your desktop as well as DropBox, which only recently opened up to the public after an extensive beta test. While you do have to install a small program on your machine to run DropBox, it is well worth it. Besides setting up a folder on your machine, which automatically syncs with DropBox, you can also set DropBox up to then sync that folder with other machines, similar to Live Mesh. DropBox lets you upload any type of file, as long as it is smaller than 350MB. DropBox uses Amazon's S3 service as its storage solution and provides its users with 2GB of free storage. For $9.99 a month or $99.99 a year, you can buy 50GB of storage.

One of our favorite features of DropBox is that it preserves every revision of every file. You can also easily share folders with your friends or colleagues.

DropBox supports Windows XP and Vista, Mac OSX, and Linux.

Oosah

Oosah's main selling point is simple: you get a whopping 1 terabyte of storage for media files. One restriction of Oosah is that you can't use it for text documents, spreadsheets, or presentations, which seems a bit weird, given that those types of files are generally small.

One interesting aspect of Oosah is that it accepts RAW image files from most camera manufacturers, though it automatically converts them into JPGs. You can also connect to your Picasa, Flickr, Facebook, and YouTube accounts and view your images and videos from those services in one central place. Oosah also gives you Media RSS feeds and even a podcast feed for your audio files.

While we love Oosah for its general ease of use, the one aspect we really did not enjoy was the fact that uploading files seems to be unnecessarily hard. Oosah does not provide any desktop clients and while you can use the web based uploader to select multiple files, uploading multiple directories at a time is not an option.

JungleDisk

JungleDisk is the only service in this list that is not available for free - and technically, it is not even an online storage service. Instead, it provides a frontend to Amazon's S3 storage service. JungleDisk costs $20 and after that, you pay Amazon for the storage and transfer of your files. JungleDisk also lets you map your Amazon S3 storage space as a network drive on your computer, so that you can just drag and drop files back and forth between your online storage and your local desktop.

JungleDisk is available for Windows, Mac OSX, and Linux.

Other Services

Online storage is a competitive market. The best services integrate fully with your desktop and allow you to effortlessly upload and download files. They also provide you with an online desktop to access files from any computers and are stable and dependable. A service that does not fulfill these basic requirements is going to have a hard time convincing users to use and trust it.

There are, of course, a large number of other online storage services that we did not include in this list. BOXSTr, for example, is a great application, but it constantly bothers you with ads and attempts to sell you their premium service. AOL's Xdrive is a great service, too, but we have heard too many rumors that AOL is trying to sell the service or that they will simply close it to be able to recommend it anymore.

The one company that is suspiciously missing from this list is Google. While you can upload your documents to Google Docs, the company that has made cloud computing a household name does not have a dedicated file storage service. While rumors about the existence of a 'GDrive' have regularly appeared in the tech blogosphere over the last few year, users still have to rely on hacks like the GMail Drive shell extension to store their files on Google's servers.

What Did We Miss?

Do you have a favorite service that we did not list? Let us know in the comments.

Logo courtesy of Flickr user blakespot.

While Wuala will happily sell you additional storage space (from $25 a year for 10GB to $1000 for 1TB), you can also trade your own local disk space for cloud storage space. If you share 5GB of space on your local drive, you will get an additional 5GB of online storage. Given how cheap hard disks have become, this seems like a fair trade-off. Users who share their local hard disk space can also turn off advertising on Wuala.

Wuala's client basically looks like a local folder and you can decide if you want to share any of your files stored on Wuala with either your friends or a group of users.

Encryption: The Good and the Bad

Even with the strong encryption Wuala uses, though, the fact that some information is going to be stored on machines outside of even Wuala's control is not going to sit well with a lot of people. While most private users can probably live with these risks (which are inherent in any cloud storage solution), businesses will probably stay very far away from Wuala.

There is also the question of how people will use Wuala - after all, the service provides almost unlimited and strongly encrypted storage. As Wuala has little control over what is shared on the network, Wuala might turn out to be a haven for rather unsavory activities. But then, the same can probably be said for most other cloud storage services as well.

Where's the Money?

The cloud storage market is highly competitive, but so far, no clear front-runner has emerged. Wuala's competitors include Box.net, Dropbox, Mozy, as well as Apple's Mobile Me and Microsoft's various online storage services, including SkyDrive and Mesh. There are also various software solutions to make backing up to Amazon's S3 more consumer friendly. All of these have different business models and feature sets, but Wuala's simplicity and P2P sharing approach will make it very competitive.