SkyDrive Morphs Into OneDrive: Why Microsoft Rebranded This Service

By Don Reisinger

Microsoft launched a cloud-based storage service that would eventually become known as SkyDrive in 2007. Although its functionality was somewhat limited in those early days, SkyDrive was viewed as an important cloud initiative for Microsoft. It proved that Microsoft could understand the value of the cloud; it gave the company time to get it right; and it kept folks using its services. SkyDrive, in other words, was a well-received alternative to the many competitors already on the market.

According to a ruling handed down by a U.K. court last year, Sky took its trademark-infringement fight to Microsoft in 2011. Sky argued that it owned the “Sky” trademark in the European Union and so Microsoft should change its name or pay damages. Microsoft argued that it was free to use the name because its offering was a service that only included a generic term “sky.”

The court documents filed in the case show that Sky appeared to take issue with SkyDrive as it became its own “standalone brand.” The company reportedly believed that while SkyDrive was integrated into other services, it was an add-on. But with SkyDrive being promoted as a cloud solution for anyone and being available outside of other services, BSkyB took issue.

If SkyDrive had been a small, somewhat unimportant service, it’s unlikely Sky would have been troubled by Microsoft’s branding. However, in May 2013, Microsoft announced that the offering had 250 million users. That was due in large part to its integration into Windows 8. But that helped convince the court that SkyDrive was a big business that Sky could understandably take issue with.

In the previous slides, one would be forgiven for trying to determine why Sky and BSkyB are seemingly being used interchangeably in this case. Sky, the broadcasting company’s trading name, also finds its way into many of the court documents. BSkyB is the result of a merger between Sky Television and British Satellite Broadcasting in 1990. Interestingly, Rupert Murdoch’s 21st Century Fox also owns 39 percent of the firm.

It didn’t help Microsoft’s case that SkyDrive apparently wasn’t its first choice in naming its cloud-storage solution. Although the service was internally code-named SkyDrive, it launched in 2007 as Windows Live Folders. Soon after, it was renamed Windows Live SkyDrive and then finally SkyDrive. That Microsoft is changing the name of this storage service yet again is not very surprising, given its history.

There’s another wrinkle to this story that perhaps hasn’t gotten as much attention as it should. BSkyB was operating a service that competed with SkyDrive for quite some time. Between 2008 and 2011, Sky offered a service known as Sky Store & Share. The offering, which was shuttered in December 2011, allowed users to upload and share digital files. In other words, Microsoft’s SkyDrive launched first and still survives, but BSkyB tried its luck in that space before filing suit against Microsoft.

After the U.K. court ruled in favor of BSkyB, Microsoft decided that it wasn’t worth the trouble of continuing its litigation. So, the company settled with BSkyB and reportedly gave the company a financial sum to put an end to the fight. It was a similar strategy Microsoft followed when it had to ditch the “Metro” branding.

Last summer, the idea that SkyDrive would be officially canned wasn’t immediately apparent. Microsoft announced that it had reached a deal with BSkyB to use the SkyDrive name for a period of time and indicated that it would consider switching the service’s name. Evidently, Microsoft didn’t want to pay for the right to use the SkyDrive name, so it came up with something else.

On Jan. 27, Microsoft announced that SkyDrive would become OneDrive. The announcement was a good thing for those who wondered if there was any truth to the rumors that Microsoft would rename its service FetchDrive or another odd title. OneDrive, at least for now, appears to be a safe bet for Microsoft from a legal perspective, and the changeover should be completed sooner rather than later.