As Google readies “GDrive”, will Microsoft lead, or follow?

Some seemingly non-news coming out of the Wall Street Journal tonight, saying that Google is readying their online storage product, commonly referred to as GDrive. The Journal doesn’t offer any really new information, saying only in the publicly accessible copy:

Google is preparing a service that would let users store on its computers essentially all of the files they might keep on their personal-computer hard drives — such as word-processing documents, digital music, video clips and images, say people familiar with the matter. The service could let users access the files via the Internet from different computers and mobile devices and share them online …

The paid content behind the firewall doesn’t have any more in terms of specifics, either in regards to timing or terms or scope of the service.  However the story, appearing in the Nov. 27 Technology section, is an indication that Google is getting closer to unleashing an online storage product, one that has been rumored for over a year and would enter the space now occupied by Amazon’s S3, Box.net, and others. 

Windows Live already has a product in the space, SkyDrive, currently in beta with an offering of 1gb of free storage.  Microsoft is also readying another product, Office Live Workspaces, that will allow online storage and access to documents and files through the Microsoft Office suite.  Office Live Workspaces is slated to go into beta sometime in December, providing 500mb of free storage, with online editing and sharing capabilities through Office although any file could be stored in the workspace.

Interestingly, Office Live Workspaces isn’t mentioned in the WSJ article, which points out a larger perception: that Microsoft is not even a player in the Web services game.  Microsoft is largely perceived, at least among the tech pundits and the mainstream press, as a latecomer and a follower in what’s now known as “Web 2.0”.  Microsoft’s lagging position in web search, and late entry into a number of Web 2.0 arenas has not helped its reputation. Even in web based mail, where Hotmail’s 380 million users dwarf GMail’s 58 million, it is perceived as not cool, based in large part on some savvy marketing that offered 1gb of storage space when Hotmail only offered 25mb.  As recently as last week, when the co-founder of Hotmail, Sabeer Bhatia, announced Live Documents, many were quick to jump on the “Microsoft Office Killer” bandwagon.

However, with SkyDrive and Office Live Workspaces, Microsoft finds itself in a unique position in web services, as the leader out of the gate.  SkyDrive is available now, and Microsoft is quickly building up services to support data storage.  It learned a lot about storage from the GMail gambit, and while it scrambled to improve Hotmail, it built a set of Core Services from the ground up to be able to provide storage services across a number of products: Hotmail, SkyDrive, Office Live Workspaces, and more to come are all built on the same storage platform. 

Yet the offerings from SkyDrive and Office Live Workspaces, at least in the current state of the betas, underwhelm.  Microsoft could (and hell, probably will) plod along, offering up a usable, reasonable, safe set of services that the accountants at Microsoft will love and the rest of the tech industry will pass over without a glance.  500mb or 1gb simply are not impressive numbers, not anymore.  Why not take the lead and set the example?  In fact, why not blow the competition out of the water?  Offer, say, 25gb for free and 50gb for $25/yr. Hook it up to Office, yes.  Offer a client for SkyDrive, and get it out the door, now, not in Q4 of next year.  Cancel some vacations if you have to.  Work through the holidays, and on weekends. Take back some of the initiative.  Do what Ballmer hollers about all the time and Win, for a change.

OK, easier said than done, and you have to be able to actually provide the service, and make some semblance of a profit on the whole deal. One interesting fact about those gigabytes of storage offered by the mail services.  Very few of them are even close to being filled up.  Offering 10 million users 25gb of space each does not mean that you need that much storage space, at least not for a while.  But isn’t this what Quincy and Chicago and Dublin and Irkutsk are all about?. In terms of perception, just think of the impact it would have on the industry, and if it helps Kevin Johnson gain his 10, 20, 30, 40 numbers, then the profits will be well in place.

Does it matter that some bloggers and tech writers pass over Microsoft to fawn over any Joe Startup or Google service that happens by?  In some respects maybe not.  But at some point, if Microsoft is going to make gains in the web services market, it is going to need to make some bold moves.  Where better to do it than here, and now?