Post by Perry Yeller with SF IT Brokers, Inc

Wuala puts a new twist on cloud storage.

While typical cloud storage services move your data onto servers managed by the provider, Wuala also uses disk space on other members' computers. Files are encrypted on the user's own machine and the chopped up into little pieces and uploaded to Wuala's servers, as well as numerous other users' computers (Wuala calls this 'social grid storage') to provide a redundant storage solution. Wuala's local client is written in Java and runs on OSX, Windows, and Linux.

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While Wuala will happily sell you additional storage space (from $25 a year for 10GB to $1000 for 1TB), you can also trade your own local disk space for cloud storage space. If you share 5GB of space on your local drive, you will get an additional 5GB of online storage. Given how cheap hard disks have become, this seems like a fair trade-off.

Users who share their local hard disk space can also turn off advertising on Wuala.

Wuala's client basically looks like a local folder and you can decide if you want to share any of your files stored on Wuala with either your friends or a group of users.

Encryption: The Good and the Bad

Even with the strong encryption Wuala uses, though, the fact that some information is going to be stored on machines outside of even Wuala's control is not going to sit well with a lot of people.

While most private users can probably live with these risks (which are inherent in any cloud storage solution), businesses will probably stay very far away from Wuala.

There is also the question of how people will use Wuala - after all, the service provides almost unlimited and strongly encrypted storage. As Wuala has little control over what is shared on the network, Wuala might turn out to be a haven for rather unsavory activities. But then, the same can probably be said for most other cloud storage services as well.

Where's the Money?

The cloud storage market is highly competitive, but so far, no clear front-runner has emerged. Wuala's competitors include Box.net, Dropbox, Mozy, as well as Apple's Mobile Me and Microsoft's various online storage services, including SkyDrive and Mesh. There are also various software solutions to make backing up to Amazon's S3 more consumer friendly.

All of these have different business models and feature sets, but Wuala's simplicity and P2P sharing approach will make it very competitive.....and good for the cloud....

This has to be some kind of record - a startup launching a public beta on the day it said it would. Wuala, the P2P ’social grid storage’ startup from Switzerland, launches its public beta tomorrow at wuala site.

Users will be able to simply click on a button on the site to start the service (it’s a Java app).

That’s it. You can drag-and-drop stuff into it for file backup, photo and video sharing, or making files available publicly.

Here’s a more detailed description, from our post on the company last month:

The underlying core tech behind Wuala is based on research conducted at ETH Zurich (the Swiss Federal Institute of Technology). The files are held in tiny encrypted pieces distributed across the "Wuala Grid" of users, and mirrored on Wuala's servers - so you don't have to rely on other users being online to access your data.

Users start with 1 GB of storage but can get as much as they want, either by trading idle disk space or by buying additional storage.

You start off with 1GB of free storage, and then if you want more, you can make more space available on your own hard drive for other Wuala members. But users don't have to trade storage - you can buy extra storage, like 100GB is 100 Euros.

All files are encrypted on the user's computer and the user chooses who gets access to which folder.

No one else - including Wuala - gets to see the files. None of the fragments of files from other people stored on your computer are executable. Unlike Web storage, you can drag and drop files into Wuala on or offline.

Wuala competes in the storage space with Xdrive or Box.net, but it has a number of significant differences. The files are held in tiny encrypted pieces distributed across the “Wuala Grid” of users, and mirrored on Wuala’s servers.

Unlike Web storage, you can drag and drop files into Wuala on or offline. Clear-Cloud Network broke the story about Wuala back in October last year.....and the cloud evolves.....