Tuesday, November 18, 2014

The Future Of Business, According To Dropbox

Today, Dropbox said it was rolling out some new tweaks for its business service. But it has a long way to go.



Stephen Lam / Reuters


Piece by piece, Dropbox is trying to find its way into a potentially massive new business: large companies paying Dropbox to power their file-sharing.


The company says it has 300 million users — 70% of which are international — and has been best known as a consumer-facing online storage startup. But after raising money at a $10 billion valuation, Dropbox has come under intense pressure from competitors including Apple and Google, as well as other startups like Box, which is pushing the cost of online storage toward zero. Dropbox, much like Box, has had to bet its future on providing a valuable layer of services that sit on top of storage — including for businesses.


Part of that business-focus arrives today in a new tool that makes it easier to bring new employees into Dropbox and assign them to specific groups, where they can immediately start working with coworkers on projects and view files within the group. Dropbox for Business, which began as an initiative about a year and a half ago, has quickly become one of the company's highest priorities as it slashes prices for its consumer-facing online storage.


In total, Dropbox has 80,000 companies as paying customers, though its regular users can be found within 4 million businesses, including 97% of companies in the Fortune 500, head of product Ilya Fushman told BuzzFeed News. The challenge for Dropbox is to convert those extra users of its traditional file sharing tools into business users.


The process required a completely new version of Dropbox, which the company had to rebuild from the ground up, Fushman said. Many businesses require a whole suite of tools to meet regulations and ensure a business runs smoothly — hence the need to virtually start from scratch. Some examples among them: a list of everyone who has accessed a file, tools to determine who can see a file, and who can modify things like Microsoft Word documents.


"The main focus for us is to help people get work done better," Fushman said. "Obviously we are a business and we have to think about monetization and revenue, but the first, foremost focus is helping people get work done and building the best tools. We're going to be making huge investments in mobile to get people more functionality, more efficiency."


Dropbox's original value proposition — dead-simple file-sharing across multiple devices — isn't necessarily dead. In fact, ensuring files synchronize across devices as fast as possible is an interesting technical problem that has attracted a wealth of engineering talent to the company. But the business of selling just online storage has basically evaporated, leading to price cuts for Dropbox's storage or, in the case of Box, doing away with charging for storage altogether.


Dropbox has certainly made progress, securing major partnerships with smartphone manufacturers like Sony and Samsung to build its software deeply into the operating systems of those phones. And the company has created business tools over the course of the past two years that represent a whole new line of revenue that didn't exist.



Dropbox


Finding its way into businesses is not the only part of Dropbox's search for a future beyond charging for storage. The company is also rapidly expanding its efforts to build out a portfolio of mobile applications and embed its storage into new devices — most recently Sony's smartphones, as previously reported by BuzzFeed News.


But those applications, such as its photo-storing service Carousel and its email client Mailbox, haven't gathered mainstream adoption in the same way that other popular consumer applications like Snapchat, Facebook Messenger and Instagram did. Dropbox has found its way into partnerships with device manufacturers like Sony and Samsung, but it has not quite found a winning formula when it comes to mobile devices. In many ways, the problem mirrors pre-IPO Facebook — as the vast majority of Internet usage shifts to mobile devices, so too does a company's existential priorities.


Enterprises, however, are a tried and true way to generate revenue. But Dropbox's challenge will be to convince companies that it is not only better than services like Microsoft's Sharepoint, which has traditionally been widely adopted by larger companies, but also Box, which is seen as a go-to for businesses when it comes to file-sharing and collaboration. Box says it has been able to attract 27 million users across 99% of the Fortune 500, and convert 39,000 companies into paying customers.


Dropbox is seeking much of the same integrations that Box offers. Box, for example, works with Salesforce, a widely used application for keeping track of sales and marketing. Dropbox recently inked deals with Microsoft to power some collaboration tools around Office and is working with Salesforce. But for some companies, Box — having focused on powering businesses from its beginning — is seen as one of the leading secure file-sharing and collaboration tools.


"OneDrive will always be a feature, same with Dropbox for Business," Six Flags director of interactive services Sean Andersen told BuzzFeed News. "It does synchronization great, but I'd still give up that compatibility for a platform that has long-term usage as a corporate product. I can look at [Box] as a workflow product, not an end-user experience."


Still, Dropbox is betting that the easier end-user experience is what will eventually capture a large enough business to justify its $10 billion valuation. It's a method that has grown increasingly popular as enterprise companies like Yammer and Salesforce, which took design cues from the consumer-focused internet industry: build software and applications that appeal directly to end users, who then essentially force their IT departments to do business with the company.


"We're being very thoughtful about where we build and where we partner," Flushman said. "We're actually more concerned around feature creep on our end, we want to keep the product very simple and very secure. On that end, we're working with some great partners. And we're being thoughtful about the [tools that enable developers to build on top of Dropbox] that we build."




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