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ENTERPRISE FILE SHARING AND MANAGEMENT:ACHIEVING PRODUCTIVITY AND SECURITYOCTOBER 2014 In this report, Hanover Research provides an overview of the market for filesharing solutions for large and highly-regulated enterprises based on a review ofrelevant secondary literature and interviews with IT and security leaders withinthe financial, healthcare, and higher education industries.www.hanoverresearch.com

Hanover Research October 2014Enterprise File Sharing and Management: Achieving Productivity and SecurityTABLE OF CONTENTSEXECUTIVE SUMMARY 3INTRODUCTION 3KEY FINDINGS 3RECOMMENDATIONS 4SECTION I: MARKET LANDSCAPE5OVERVIEW 5SOLUTIONS 6SECTION II: FILE SHARING SOLUTIONS FOR REGULATED ENTERPRISES7OVERVIEW 7SECURITY AND COMPLIANCE 9HEALTHCARE 9FINANCIAL SERVICES 11HIGHER EDUCATION 11RISK MITIGATION 13OTHER FACTORS 14TRENDS 15MOBILITY 15INTEGRATION 18APPENDIX A: PARTICIPANT INTERVIEWSAPPENDIX B: ABOUT THIS REPORTREPORT SPONSORS 2020ABOUT HANOVER rch.com202

Hanover Research October 2014Enterprise File Sharing and Management: Achieving Productivity and SecurityEXECUTIVE SUMMARYINTRODUCTIONIn this report, Hanover provides an overview of the file sharing practices and perspectives of large and highlyregulated enterprises. Section I of the report summarizes the overall market, while Section II presents an analysisof highly-regulated industries’ requirements for electronic file sharing solutions based on original interviewsconducted with knowledgeable industry sources. A summary profile of these respondent experts is provided inAppendix A.KEY FINDINGS Highly-regulated enterprises and companies that manage a large volume of sensitive personal or financialinformation view data security and risk mitigation as a non-negotiable prerequisite for any electronic filesharing solutions. While other considerations may influence vendor selection, these are secondary to theoverriding necessity for top-tier security. Mobility is an increasingly significant driver of corporate interest in file sharing solutions. However,security concerns with public cloud services are leading compliance-focused enterprises to delayimplementation and/or limit use of these services. The inability to access files via mobile platformsis a visible pain-point for large and highly-regulated companies, but the need to protect sensitive datafrequently poses a prohibitive obstacle. The ability to integrate file sharing solutions with other enterprise software and programs is a relativelylow priority for enterprise customers. It is not uncommon for different groups within a single largeorganization to have separate, non-integrated file sharing solutions. While there is clear interest in unified,integrated systems, the level of effort required to accomplish this goal is seen as prohibitively high, whileongoing frustration with the current state of limited integration – while real – does not rise to the level ofbeing a determinative factor in decisions regarding file management. In implementing file sharing and management solutions, highly-regulated enterprises seek to avoid risks– including security lapses, illicit access, exposed files, and service outages – commonly associated withemployee use of public cloud solutions. Regulated industries show a strong preference for on-site deployment of synchronization and sharingservices. This is principally driven by security concerns; until those concerns are addressed, theseindustries are unlikely to make the switch to hosted file sharing and management. The typical industryperspective is articulated by one senior IT source as “if we keep it in-house, we know we’re limiting ourrisks. I know that there are ways of mitigating the risks associated with hosted solutions, but would yourather mitigate those risks or just avoid them?”www.hanoverresearch.com info@hanoverresearch.com3

Hanover Research October 2014Enterprise File Sharing and Management: Achieving Productivity and SecurityRECOMMENDATIONS The World is Moving – For enterprises of every type and size, the evolution of work processes nowdemands capabilities that challenge traditional, IT-sanctioned file sharing methods. If employees lack access to a file storage platform with mobile file sharing capabilities, informationwill increasingly be transmitted via uncontrolled and potentially insecure channels. The increasing demand for knowledge sharing and productivity means enterprises withoutsecure and easy-to-use collaboration tools may either jeopardize data security or pay a penalty inoperational efficiency. Either outcome can put these enterprises at a competitive disadvantage. Compromise is Not an Option – IT leaders within large and highly-regulated enterprises are unanimousin stating that data security and regulatory compliance must be maintained to the highest possible degree. Top-tier data security should be considered table stakes for any enterprise in considering electronicfile management solutions. While other capabilities may factor into vendor selection, only offeringsthat provide the most robust security features should even enter into consideration. Regulatory compliance support is an essential element of any data management solution. Thelack of consistently up-to-date tools and systems ensuring ongoing adherence to evolving legalstandards creates risks that are otherwise unavoidable and should be considered unacceptable. Proceed with Caution but Proceed – Perhaps the greatest risk that an enterprise with outdated filesharing methods can take is doing nothing. Enterprise IT leaders must embrace their role as stewards ofcompany data, and also provide essential productivity, mobility and collaboration tools. Employees demand effective and user-friendly file sharing and collaborative capabilities, andorganizations that do not implement these internally will increasingly find sensitive data beingtransmitted via channels outside of their control – at a time when data thieves have reachedunprecedented levels of sophistication. By implementing mobile file sharing and collaboration platforms that leverage on-site deploymentmodels, enterprises can keep sensitive information under supervision without compromisingemployee productivity, operational efficiency, and competitive advantage.www.hanoverresearch.com info@hanoverresearch.com4

Hanover Research October 2014Enterprise File Sharing and Management: Achieving Productivity and SecuritySECTION I: MARKET LANDSCAPEOVERVIEWGlobal demand for enterprise file synchronization and sharing (EFSS) solutions is experiencing rapid growth,with projections suggesting that the market will reach 2.3 billion by 2018.1 In mid-2013, approximately 25percent of the global information workforce used consumer-grade file synchronization and sharing services – adramatic 400 percent increase in utilization since 2010.2File sharing and synchronization software has become an essential productivity-enabling resource forincreasingly mobile information workers. According to Forrester, about two-thirds of information workersshare files with others on a routine basis.3 However, in the absence of widespread enterprise EFSS solutions, amajority of information workers share documents and files via email and other unsecure methods.Figure 1.1: How Information Workers Share Documents85%Send them as email attachments or picture messages60%Put them on a network shared drive38%Put them on a USB flash drive or CD/DVD16%Put them in a file sync, sharing, or online locker service12%Keep them in a web-based office productivity site10%Use a service that my company providesRetrieve them from an online backup service4%Source: Shey, H.4IT security decision-makers are faced with a dilemma: how to provide employees with a functional file sharingsolution while minimizing the risk of data leakage.5 Though this matter carries particular urgency for largecompanies and companies in highly-regulated industries, roughly 60 percent of IT security decision-makersnote that they are concerned about consumer-oriented communications and file sharing tools running on noncorporate resources. However, while 88 percent of enterprises have security policies in place, only 41 percenthave both security policies and tools to enforce such policies.6“New IDC Worldwide File Synchronization and Sharing Forecast Shows Market Will Grow to 2.3 Billion by 2018” IDC, October 2014.http://www.idc.com/getdoc.jsp?containerId prUS2519261412Koplowitz, R., and Ted Schadler. “What File Sync And Share Customers Have Learned.” Forrester Research, July 24, 2013.3Shey, H. “Technology Spotlight: Enterprise File Sharing, Policies And Security.” Forrester, December 20, 2013.4Ibid.5Ibid.6Ibid.www.hanoverresearch.com info@hanoverresearch.com5

Hanover Research October 2014Enterprise File Sharing and Management: Achieving Productivity and SecuritySOLUTIONSWhile demand for secure EFSS solutions is higher than it has ever been, IT decision-makers face significantchallenges in vendor selection. Monica Basso of Gartner states that the market for electronic file sharingsolutions is “immature but crowded,” and market players present varied and difficult-to-assess claims regardingthe features of their EFSS offerings. Gartner notes that the emerging market for enterprise file synchronizationand file sharing focuses on six types of capability: (1) social and collaboration; (2) storage and backup; (3)content management, managed file transfer and collaboration; (4) mobile devices; (5) cloud virtualization; and(6) enterprise mobility. While all of these areas are receiving significant promotion, however, very few vendorsactually operate across these different sectors.There are more than 120 vendors active in the EFSS market, with “nearly all of them [leveraging] the publiccloud for storing files on behalf of enterprise users.”7 While this deployment method may be acceptable fororganizations that are not working with particularly sensitive information, highly-regulated enterprises do nothave the luxury of trusting such unsecure solutions. This difference in the capabilities required by large or highlyregulated enterprises is illustrated by the success of Dropbox, considered a “Challenger” in Gartner’s EFSSMagic Quadrant report. Dropbox “has been so successful to date by being end user friendly and largely ignoringIT”8 – this indicates a clear discrepancy between general enterprise file sharing and synchronization solutions,and the caliber of EFSS solutions required by highly-regulated industries.Scearce, T. “The Public Cloud – Is it Safe for Enterprise Files?” Attachmate, July 31, 2014. ic-cloud-safe-enterprise-files/7Miller, R. “Dropbox Looks to Shed ‘Dropbox Problem’ Image.” TechCrunch, June 6, 2014. hed-dropbox-problem-image/8www.hanoverresearch.com info@hanoverresearch.com6