LogMeIn throws its hat into cloud storage ring

LogMeIn CEO Michael Simon

And the latest entry into the cloud storage sweepstakes is …  LogMeIn (s logm), the company that built its business around its popular, easy-to-use remote access service.
LogMeIn will woo both consumers and businesses with a beta of its Cubby service, according to Michael Simon, CEO and chairman of the Woburn, Mass.-based company.
The move comes at a time when dozens of companies are jumping into cloud storage, many of them offering free storage for a limited amount of data in hopes of converting free accounts into paying customers. Dropbox is the fan favorite in the consumer arena and Box is a big player in the business segment where it faces many other contenders, many of whom offer digital signatures and other ancillary services with storage.

It’s off to the races in cloud storage

Simon acknowledged that the field is crowded but said LogMeIn, as a profitable company, has a leg up. Many of the “freemium” cloud storage companies claim multiple millions of customers but will not disclose how many of them pay. LogMeIn ended its fourth quarter with 1 million paid accounts with multiple paid licenses per account, which gives it a good foundation on which to build, Simon said. Cloud storage is the most requested feature among those customers, Simon said.
Cubby, now in beta, will automatically save multiple versions of your document —  and those versions will not count against your quota, Simon said in an interview.
LogMeIn has built its own cloud over the past few years, Simon said. “Not a lot of players have the wherewithal to create their own elastic storage component. It runs on low-cost hardware but the entire stack is proprietary and we can offer a price advantage,” Simon said. Dropbox, the consumer giant in this space, relies on Amazon(s amzn) for its raw storage, but other players like Spideroak and Backblaze have also built their own storage infrastructure, which they say lets them beat Amazon — widely perceived as the low-cost leader — on price.
LogMeIn is not ready to talk price yet — a beta of the Cubby service goes live on Thursday.

Challenge: converting freemium to paid accounts

While it’s hard to transition non-paid to paid accounts — most companies cite a 2 to 3 percent conversion rate — LogMeIn’s installed base of remote access users may give it a leg up here. Simon said the company will market Cubby to its existing base, which includes lots of small and medium businesses — and IT service providers that offer them remote support.
A user can click on any files or folders on his or her desktop, iPhone(s aapl) or Android(s goog) device to make it a “Cubby” folder. Cubby will tie into a business customers existing Active Directory policies for security and rights purposes.  With Cubby, the user also controls the encryption keys meaning that LogMeIn does not “see” their data at all. Users will not be barraged with ads, a trend that some see a scourge of the freemium market.
There are two ways to share that data — The user can designate another “trusted person” to have bidirectional access to the data or  can share a link that would let the recipient see the data but not modify it.
And so, with LogMeIn Cubby, the battle for cloud storage continues. Don’t expect it to end any time soon.