In 1996, a would-be MIT entrepreneur pitched me on this idea: “What if we could package up huge files like engineering drawings and email them to people instead of FedExing them?” I listened politely, but it all seemed a little futuristic to me at a time when even email wasn’t ubiquitous. 

Of course, this is exactly the business YouSendIt launched in 2003. The nine-year-old company does this quite simply by using email to send the message and YouSendIt to carry the payload — the gigantic file that you can’t attach to the message directly. The company now has 23 million subscribers; according to Wikipedia, 500,000 of them pay for the privilege.

Today the company announced Workstream by YouSendIt, a set of business enhancements to its evolving set of file services. The goal, in the words of CMO Tony Nemelka, is to give enterprises “systems that extend their line of sight beyond central storage and beyond the firewall.” I found three notable things about this offering:

1. Integration with Outlook and SharePoint with plugins to make it easy to send and retrieve files. While this may not be unique, the integration is quite intuitive. In the experience of David Michel, CIO for Atlanta-based law firm Burr & Forman, giving employees tools they recognize makes it easier for them to use them. Further, it’s integrated into their common workflows such as eDiscovery.
2. Enterprise administration tools for user and group management. This is what IT needs in order to provide a business-ready alternative to consumer-focused Dropbox. It’s what drew Michel to the offering. Now, this is not lockbox-type security or administration that you could get from a virtual deal room product from IntraLinks, but it’s enough for email-level security and administration.
3. An integrated set of file services: store, share, sync, sign, and send. With senior executives bringing personal iPads to work, file sync is the killer feature for consumer-focused services such as Dropbox and SugarSync. But businesses need more, and with this announcement, YouSendIt is joining Box, Adobe, and IBM in offering file services that work in financial and legal settings — for example, to securely deliver a file or capture a signature.

In a conversation with CIO Michel, who has implemented this service for his entire organization, we learned that Workstream by YouSendIt replaces a tedious manual process of setting up and administering FTP sites to handle the massive quantity of documents that lawyers must exchange and deal with. The iPad file sync is just a great hook to get lawyers using it. Michel had this to share with CIOs:

• “If you’re hosting file distribution on-premises, think about the cost of storage, backup, and administration, then compare it with a cost of a service.”
• “Trust the cloud service and end user agreement to do its job.” (This from the CIO of a law firm!)
• “Don’t put your critical information there. We say, ‘If it’s safe enough to send in an email, it’s safe enough to send via YouSendIt.’”

YouSendIt joins a dozen or more vendors tackling file services. Every content management company has a play here. Startups in a rapidly consolidating market sell into this market. We expect the consolidation in the cloud file services market to continue, with predictions like these feeling more certain every day:

• Microsoft buys YouSendIt to accelerate its file services stack.
• Oracle buys Box to extend its file services capability.
• IBM extends its SmartCloud with an Egnyte acquisition.
• EMC snaps up SugarSync to augment Mozy file storage services.
• Apple rolls Dropbox into iCloud.

What do you think?