Whatever Happened to the USB Keychain Drive?

When I first saw and played with a “keychain storage” dongle, I was convinced that this was the next big thing in portable data storage. There was a big article on ZDNet
painting a rosy picture for these devices. Based on what I have seen, these devices have not yet set the world on fire in the way that I and others had predicted. What went wrong?

As a refresher, these so-called keychain storage dongles were pretty interesting when they first hit the market. They are small (they can literally fit on a keychain), dense (up to a 1GB versions are available), and universally accessible (they use USB 1.1 or 2.0 for the most part). The DiskOnKey (pictured) and the Q Drive from Agate Technologies were supposed to release consumers and businesspeople from the tyranny of Zip Drives, CD-R, and other unsundry forms of removable storage.

1. Increased Low-Cost Local Storage – Between the time that I first looked at a keychain storage dongle (late 2001) and the time of this article, there has been an amazing increase in the amount of local storage available in laptop and desktop computing environments. As such, I have become more accustomed to storing data locally. I can afford to have multiple copies of a large file or presentation on several computers as I now have the storage capacity to do so.

2. Decreased Need to Shuttle Data between Computers – When I first started looking at these technologies, most corporate VPNs were not as reliable as they are today. I, like many other people, had occasion to use my home computer to work on Word or Powerpoint files. Putting the files on a keychain dongle was certainly more convenient (and safer) than emailing them to myself in the clear via a Yahoo! account or something like that. Nowadays, however, my corporate VPN is sufficiently reliable for me to be able to count on having on-demand access to files that I have stored on my shared drive at work. The need to shuttle data between computers is no longer as critical as it once was.

3. Lack of Compelling Cost-Appropriate Applications – In the end, I think that the biggest challenge for products in this space is simply the lack of compelling storage-related applications. When it comes to digital photography, consumers already have the option of CompactFlash or SD. When it comes to music, CD-R seems to be the winner based on cost and infrastructure (who has a USB drive in his/her car stereo?). So, what use cases are there where a $60+ device, no matter how cool it is, is appropriate? Outside of storing information (presentations, documents, etc) that I would like to have access to when I am out of the office, I can’t think of one.

I am not sure that this market is going the way of DataPlay or DivX, but I do think that it will take some creative marketing to get the story out.