Meet Zocalo,'s Answer to Box and Dropbox

Amazon just unveiled a new service to enter a fast-growing market. Here's what investors need to know.

Jul 12, 2014 at 10:30AM

As if's (NASDAQ:AMZN) Web Services division wasn't already growing fast enough, the web giant is back throwing its weight around again. 

On Thursday, Amazon unveiled Zocalo, a fully managed enterprise storage and sharing service, complete with administrative controls and feedback capabilities. With Zocalo, Amazon lets users store, share, and gather feedback on everything from documents to spreadsheets, webpages, presentations, images, PDFs and text files. Translation? This is Amazon's entrance into the already-crowded space currently being occupied by the likes of Box, Dropbox, and Microsoft OneDrive, and Google Drive.

But if the infrastructure is there, why not use it? According to Amazon Zocalo and Web Services GM Noah Eisner, "AWS was increasingly being asked to provide an enterprise storage and sharing tool that was easy to use, allowed users to quickly collaborate with others, and met the strict security needs of their organizations. That's what Amazon Zocalo was built to do."

For perspective, here's a quick intro to Zocalo uploaded by Amazon this morning:

To be sure, all the usual bells and whistles of an enterprise-centric storage solution are there. But administrators can also delight in managing Zocalo, which is encrypted in transit and at rest, offers easy-to-set, user-specific sharing policies, and can integrate with existing corporate Active Directory accounts so users can utilize their existing enterprise credentials. And users can access and sync data stored in Zocalo on any device, including laptops, iPad, Kindle Fire, and Android tablets.

In true Amazon fashion, Zocalo priced aggressively at just $5 per user per month, with each user allotted 200 GB of storage -- and that's on top of a free 30-day trial with 200 GB storage for up to 50 users. For Amazon WorkSpaces customers, Zocalo is free for up to 50 GB of storage, or $2 per user per month for up to 200 GB. 

By comparison, Box charges the same $5 per user per month for its Starter plan, but it only allows for a maximum of 10 users and 100 GB storage and doesn't include Active Directory integration. To get that, Box users need to upgrade to its Business plan for $15 per user/per month, which requires at least 5 users and allows for a 1000 GB storage. Dropbox similarly offers a 1000 GB, $15 per user per month plan.

Here's why Amazon is diving in head-first
So what does Amazon have to gain? For one, the enterprise cloud storage and collaboration market is growing quickly.

Before Box first delayed its IPO in May, for example, its S-1 registration statement revealed its annual revenue most recently grew 111% to $124.2 million in fiscal 2013. As Box invested heavily to capture market share, however, it incurred a massive net loss of $168.6 million over the same period. Even so, only a few days ago Box raised another $150 million in private equity funding which valued it at roughly $2.4 billion.

And back in February, SEC filings revealed that Dropbox had raised another $325 million, and all amid speculation it was seeking a potential IPO valuation of at least $8 billion on 2013 sales of at least $200 million.

But even putting aside the fact those valuations could be wildly optimistic, you can't blame Amazon for wanting to step in and take a slice of the pie. Amazon still lumps Amazon Web Services revenue into its vague "Other" category, which itself grew nearly 58% year-over-year in its most recent quarter to $1.26 billion. Amazon Web Services is estimated to comprise more than 80% of that total, which already makes it a $4 billion per year business.

In the end, if Amazon can add a few hundred million in incremental revenue through Zocalo without significantly distracting from its core businesses, there's no reason this move can't be a big win for shareholders over the long-term.

Amazon isn't the only one threatening existing businesses
Speaking of disrupting industries, Warren Buffett recently admitted another emerging technology is threatening his biggest cash-cow. While Buffett shakes in his billionaire-boots, only a few investors are embracing this new market which experts say will be worth over $2 trillion. Find out how you can cash in on this technology before the crowd catches on, by jumping onto one company that could get you the biggest piece of the action. Click here to access a FREE investor alert on the company we're calling the "brains behind" the technology.

Steve Symington has no position in any stocks mentioned. The Motley Fool recommends, Google (A shares), and Google (C shares). The Motley Fool owns shares of, Google (A shares), Google (C shares), and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information