Google Drive Is Fine and That Doesn't Matter

Market leader -- and soon-to-be IPO darling -- San Francisco-based Dropbox has been openly taunting Mountain View, Calif.-based Google since back in 2011. It raised a serious war chest of $257.2 million from A-list investors such as Benchmark Capital, Goldman Sachs(GS) and Greylock Partners. That kind of cash, in turn, legitimized a flurry of other syncing and storage wannabes: SugarSync, Box, Wuala and SpiderOak. Tech blue chips followed. Microsoft(MSFT) tweaked its online storage offerings, based around SkyDrive, by adding something called Windows Live Mesh. And of course, there's Apple(AAPL) , which just cannot stop hyping its iCloud content-sharing tool.

Storage, storage everywhere
Sure, most of these services mostly work. Dropbox, in particular, is a decent way to keep all your files on hand wherever you go. The issue with syncing and storage is with the competition: There is no end to it. This sector dangerously flaunts Warren Buffett's critical investing maxim: "In business, I look for economic castles protected by unbreachable moats."

Buffett likes things, utilities or railroads for example, that have serious barriers to entry. That certainly doesn't exist in the storage and sync market. Everyone can, and does, offer this service.

Known document collaboration players such as Google, Microsoft, Zoho and Sync.in offer fairly powerful document storage and sharing. Security companies such as Symantec(SYMC) , online collaboration tools including LiquidPlanner and data backup players such as Carbonite(CARB) and Mozy all feature rich backup and sharing products. Even retail giant Amazon(AMZN) , with its Kindle offering, has sophisticated document storage.