Hightail raises $35M: the file sync-and-share market is red hot

Hightail, the file sync-and-share company formerly known as YouSendIt, has announced raising $34 millions in a series E round, led by hard drive maker Western Digital.

This comes on the same day that rumors suggest competitor Dropbox is raising $250 million (see The analysts don’t get Dropbox, now raising $250M on an $8B valuation).

I wrote a report a few months ago — The future of work: new paths to productivity — sponsored by YouSendIt, that characterized file sync-and-share solutions like Hightail as the center of today’s user-centered computing paradigm.

[Disclosure: Hightail is backed by Alloy Ventures, a venture capital firm that is an investor in the parent company of GigaOM/paidContent.]

Here’s an excerpt to further explain the critical role that file sync-and-share plays today, and why companies like Hightail, Dropbox, and Box can raise such great sums and commend large valuations:

dist core

Distributed core architecture

  • At the top of the figure you can see the cloud, where users access a mixture of personal and business cloud applications. Consider the example of Google Drive, where editing applications can create and revise office documents in the cloud, which can be uploaded and downloaded in the old web 1.0 fashion manually. Drive also can synchronize those cloud-based files to a folder on the user’s Mac, PC, or mobile device, where other applications — Microsoft Word, for example — can also be used to edit the same .docx files.
  • In the middle you see users in both personal and business sides of life. They can access their online file stores, change settings, and perform file-management tasks such as retrieving a virtually deleted document that is no longer available on a personal PC but backed up in the cloud.
  • At the central core the file sync and share takes care of the file distribution based on the user’s settings or the settings of the corporate file-sync-and-share solution, which are more likely to be managed by administrators.

At the bottom, files are synced into the file store on the user’s desktop, laptop, or mobile devices. Local apps can access these files through a variety of means, but in the final analysis, they are more or less like other files. Note that this is a bit odd on managed devices like iOS, where there is no user-accessible file system, per se. In this case, file access may require an API integration between an app and a file-sync-and-share app.

As an added wrinkle, apps in the cloud and on the users’ devices may also be syncing data, including files. For example, Simplenote, a widely used note application, syncs users’ notes to and from client applications and a cloud version. Apps may also sync their settings across various clients and cloud versions. Simplenote serves as a platform for other applications to perform that sort of syncing as well, which makes the case for operating systems to take over basic syncing and leave more-specialized use cases to more-sophisticated solutions.

The file-sync-and-store model is not only distributed and virtual but also social. Files and folders can be shared with others in a much more sensible and defined way than web 1.0’s uploading and downloading or email file attachments. A shared folder can have a group of people invited to it, just as you would invite co-workers to a project in an enterprise social network or a Sharepoint folder. The idea of collaborative sharing is now being baked into the file system, the lack of which is a huge oversight in today’s operating systems.

It’s clear that these firms are pushing ahead into a new era of computing faster than others, and those others are in jeopardy of being left behind.