Managed File Transfer Predictions for 2014

managed-file-transfer-predictions-150x150Managed File Transfer continued to amaze me in 2013.  I was surprised by the sheer number of new companies and products that continued to enter the space, even though the industry doesn’t seem to be getting that much bigger.  With that and other managed file transfer news from 2013 in my mind, here are my top five managed file transfer predictions for 2014:

Prediction #1: As Competition Increases, Certification Becomes More Important

From the perspective of a typical industry life cycle, the Managed File Transfer industry has reached full maturity.  The managed file transfer capabilities necessary to play in this arena are well known and everyone seems to have the basics down now.  So where is there room left to compete?  One traditional method established players may use to ward off competition is third-party certification.  By getting their products, company or services certified by third-party agencies, managed file transfer vendors will still be able to give their salespeople that hook they need to still win deals when prices and features are nearly the same.

In some respects, we already saw some of this behavior back when managed file transfer vendors began to trip over each other to achieve FIPS 140-2 validation of their file transfer cryptography, and we’ve certainly seen vendors bow to Drummond’s AS2 certification.   But we’re seeing even more of it now as cloud providers pressure traditional vendors with security claims, and are forced to back them up with HIPAA, PCI-DSS, SOX, SAS 70 (now SSAE 16), ISO 27001 and other certifications.   Perhaps even more certification is on the horizon?

Prediction #2: MFT Solutions With Native Mobile Clients Will Win…For a While

Many managed file transfer products and services now have native mobile clients to accompany their solutions.  By and large, these are handheld file sync applications, allowing people to securely transfer files to and from their mobile devices using the same folder structures exposed by their MFT deployment.  In most cases, on-premise vendors have been forced to develop these solutions to stay current with pure cloud providers like DropBox.

However, I believe that there is a finite time limit to the use of native mobile clients that work…and I hate to say it…much like early FTP clients worked on early desktops.  One early victim of this trend has been YouSendIt, now desperately trying to rebrand itself as “HighTail – the professional way to securely share…”  In the final analysis, YouSendIt’s products just didn’t do enough.  “So, you sent the file to another person.  Now what?  Can they edit it?  Pass it on to their friends?”  I believe the same issue will soon also face all managed file transfer vendors whose native mobile clients only move files back and forth today.

Prediction #3:  Collaboration Technology Will Squeeze Out Several MFT Solutions

Continuing a bit on the last theme, we need to look at the solutions that are squeezing companies like YouSendIt, DropBox and their ilk into obscurity.   By and large, they are massive cloud-designed-in solutions platforms like Google Docs, Microsoft Office 360 and Adobe’s creative suite.  In other words, it’s the content editors that are winning.  After figuring out that building a cloud-based file system is easy (at least compared to writing Word, for example), all the major content providers have decided to win back the “send and share business documents” end of the business, and by and large they’re succeeding.

However, there will continue to remain niches of document types or operations that don’t fit into the massive content editors.  Today those document types include large design files, static PDFs, specialized document formats, and almost all MFT vendors are chasing after the industry groups and experts that use these formats.  Operationally, there are still also many niches open around the different ways people work with shared information, but that leads right into the well-established marketspace called collaboration.  With that in mind, I believe MFT vendors will find themselves losing to secure collaboration solutions more in 2014 and beyond than they ever have before.

#4) To Displace Old Solutions, MFT Vendors Need To Cut Costs By More Than Half

I can’t tell you how many times I’ve heard MFT vendors tell me “thank God our support renewals are still coming in,” in 2013.  There is exactly one reason for this: the IT staff that manage and fund MFT solutions are terrified for their jobs in our sluggish, outsourcer-friendly, cloud-embracing economy.  Companies are refusing to replace their existing MFT solution even if it would save them half their annual support charges because the risk of failure (and thus job security) is too high.    With that in mind, MFT vendors whose strategy is to displace other solutions will find in 2014 that they either need to cut costs by an eye-popping percentage (i.e., well over 50%) or guarantee the job security of the implementing team (which only a few “too big to fail” vendors like IBM seem to be able to do).

#5) MFT Vendors That Empower Surviving IT Staff Will Prosper

The flip side of the coin is that MFT solutions that make their IT staffers look like rock stars will prosper through word of mouth in 2014.  Since “private cloud” is now the rage, this means that MFT solutions that allow IT to allocate and meter MFT resources back to the business units that hold the pursestrings (like true cloud solutions do) will be the ones that IT staffers will use in more projects, and talk about with their friends in the industry.

NEW: Grading Our 2014 MFT Predictions

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About Jonathan Lampe

Andy White and I started File Transfer Consulting in 2011 to solve secure file transfer and managed file transfer issues through strategic analysis, training, integration and custom development. Our unique approach allows us to address complicated issues like no one else.

Before FTC I created and then led the development of Ipswitch's MOVEit managed file transfer software for ten exciting years, including three as VP for R&D and Product Management at Ipswitch (WS_FTP, MessageWay and hosted services). I also served for VP for Product Management for RhinoSoft (Serv-U), where I guided the development of managed file capabilities and marketing that led to its eventual sale to SolarWinds.

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