The buzz words have been flying around for some time - “Cloud Computing,” “Managed Services,” “Hosted Solutions” and many more. While those service monikers may mean something to someone, has anyone ever bothered to ask what they mean for the SMB market?

eGnyte asked that very question and came up with an answer in the form of a service that can be best defined as an “on-demand file server” with a twist – a twist that incorporates a local NAS device and connects it to the cloud.

Hosted storage has been around for some time, offered by big companies ranging from Amazon to Western Digital. But, those providers and many others have focused on little more than hosted space for storing data files. Few, if any have taken the concept much further. While having a repository on the Web for data is important, it does little for the SMB market that lacks the knowledge on how to leverage that remote storage.

That is where eGnyte stepped in and delivered a hosted storage solution that does a lot more than just storage. The company has put a Web 2.0 front end on the hosted storage portion of the service that makes it work like a local, albeit simple, file server.

The way eGnyte works is that an administrator logs into the service via a browser and is presented with a management console, where user accounts can be created, directory shares, user security and much more. For the end user, the service offers all the primary features of a small network file server and most importantly, users can map a virtual network drive to directories created on the hosted service.

In other words, a user can have an F: Drive (or G:, H:, and so on) on their PC that maps directly to a remote directory – and that makes hosted storage incredibly easy to use.

The capabilities of the service don’t end with just drive mapping – users are able to e-mail files (or links to files) directly from the Web 2.0 interface, setup shares with other users, control multiple versions of files, place security controls on files and pretty much any other function one would expect to be able to do with a file server.

Users are broken down into two categories–power and standard. Power users have full access to the eGnyte service and can create, delete, modify and assign security to files and directories. Standard users only have basic access to a file; very similar to how an FTP service would work. A typical implementation is to setup up the company’s employees as power users, while standard user accounts are given out to business associates, customers or other external individuals.

All power users have access to backup services, which allows users to backup or mirror local directories to eGnyte’s hosted directories -which adds up to an ad hoc business continuity/disaster recovery service when used properly.

While these features prove to be ideal for most small businesses, eGnyte just introduced a “the local cloud.” The way it works is by integrating a local NAS device with the eGnyte service by downloading and installing the eGnyte Local Cloud (ELC) software. That software works on any inexpensive off the shelf storage device (like those from Maxtor, Simpletech, Western Digital, Toshiba, etc.) or on a local computer hard drive.

eGnyte is offering the Local Cloud as a way for users to have offline access to their files. But, there’s a lot more that the service can do. For example, if users need to run local network or multiuser applications, such as QuickBooks, the local NAS (or Local Cloud, if you will) gives that ability. Many multiuser local applications can simply not work with hosted storage because of latency, record locking and so on – the local cloud approach solves that problem, while still providing real time active backup of the data.

Some users have concerns about a hosted provider going out of business and then loosing access to their files. The Local Cloud approach solves that problem. Users will always have a local NAS based copy of all of their hosted data. eGnyte addresses that “cease of operations” concern by guaranteeing that if the company were to shut down, all users would be notified at least 10 days before service suspension. That would give users ample time to make local copies of their data before loss of service. eGnyte offers an archiving service where all data is copied to DVDs and mailed off to the customer on a monthly basis.

On the security side of the equation, eGnyte has incorporated SSL and HTTPS encryption and encourages strong password creation. Even more impressive is that the company meets HIPAA requirements for data protection, making it a viable choice for medical and health care users.

The service is currently billed directly and costs $15 per month per power user account – each power user account includes at least 20 standard user accounts. Capacity offered starts at 20GB for three users, increase to 1TB for four or more users and becomes unlimited for larger group accounts. The company offers volume discounts for 16 or more users.

eGnytes channel program is in its infancy and is a work in progress. Currently, the company offers a commission to partners that recommend the service. Even so, some potential partners could view this as a ground floor opportunity to get involved with a vendor that is poised for rapid growth.

What’s more, setting customers up with eGnyte can bring other integration opportunities, ranging from security appliances to local storage solutions to remote access and VPN devices. The service lays the foundation for creating a geographically diverse disaster recovery solution or even can be configured for business continuity. Either way, there is plenty of opportunity around the service and once eGnyte gets a full-fledged channel program in place, the product could evolve into the perfect service offering for VARs servicing small enterprises.