Just ask executives at companies like Box, Dropbox and Hightail. They pioneered a new kind of Internet service that allows people and companies to store all kinds of electronic files in an easy-to-use online locker. But as often happens, the much bigger companies liked the idea so much they decided to do the same thing -- at a much lower price.
''These guys will drive prices to zero,'' said Aaron Levie, co-founder and chief executive of Box. ''You do not want to wait for Google or Amazon to keep cutting prices on you. 'Free' is not a business model.''
So how do you avoid free? Box is trying to cater to special data storage needs, like digital versions of X-rays for health care companies and other tasks specific to different kinds of customers. Hightail is trying to do something similar for customers like law firms. And Dropbox? It is trying to make sure that its consumer-minded service stays easier to use than what the big guys provide.
''It's very tough just to be in the storage business,'' said Brad Garlinghouse, the chief executive of Hightail. ''We don't think that is what we're selling anymore.''
In the tech industry, they call this sort of reinvention of the core business model a ''pivot.'' Another way to describe it is a fight for survival.
Box, founded in 2005, has attracted $512 million in investment, and in March it filed papers for an initial public offering of stock. In July, the company said it had 39,000 businesses paying $15 to $35 a month a user. It is hard to know how many people that is, since some businesses have just a couple of people, and others include General Electric and Eli Lilly.
Dropbox has 300 million customers worldwide and actually runs inside Amazon Web Services, as do parts of Box. Many Dropbox customers pay nothing and get two gigabytes of storage capacity a month, the equivalent of 1,000 books or seven minutes of high-definition television. A version for $10 a month offers 100 gigabytes.
Hightail, which used to be called YouSendIt, says it has over a half-million business customers paying $25 a month or more, depending on the features chosen.
''There's a place for all of them,'' said Amita Potnis, an analyst at IDC. ''Amazon's focus is really computing itself. The smaller ones have to focus on ways businesses actually use it.'' For example, she said, the services can help companies collaborate with each other online instead of sending emails back and forth with attachments.