The last year hasn't seen many flashy product launches or updates for Dropbox. The company held a big event last April to show off its Carousel app for photo management and the newly purchased Mailbox email app, but since then, it's been a year of refinements. And not coincidentally, many of those updates have centered on Dropbox for Business. After introducing the two-account setup that lets personal user accounts live alongside a Dropbox for your work, the company has focused on improvements that make Dropbox work better with Microsoft Office, an API to help big businesses integrate the service, and numerous other updates.
Today, the company is announcing another set of updates for Dropbox for Business customers — and signaling its intentions to make "DFB," as it's called internally, a major source of revenue. Currently, Dropbox has 300 million users (and just announced that its users have shared 2.1 billion files and folders), but the number of paying customers for Dropbox for Business is closer to 100,000. Meanwhile, DFB head of product Rob Baesman said that the company has identified about 4 million businesses using Dropbox in some form — either the free offering or the "Dropbox Pro" option that comes with 1TB of storage. Put those numbers together, and you can see there's a big opportunity for Dropbox for Business to find its way into the millions of companies where employees are already using the service.
Dropbox seems to think its fortunes lie with big businesses
The features announced today are seemingly focused on growing Dropbox's footprint among big enterprise customers, rather than the small- and medium-sized businesses that generally have less rigorous security standards. One such feature is tiered administrator accounts — rather than having a "one size fits all" administrator option, businesses can have multiple administrators at three different access levels, each with different clearances for what they are allowed to do within Dropbox.
Another new feature aimed at large organizations is support for Microsoft's Active Directory, a tool used for authenticating and authorizing users on a corporate network. Dropbox is now beta testing integration with Active Directory, which means a Dropbox business account can be simultaneously included when adding or removing users from a network. Once using Dropbox, companies also now have the option to make two-factor authentication a requirement, even if it wasn't turned on previously — users will be guided through the process the next time they access Dropbox.
Dropbox’s increasing focus on the enterprise reflects a fact that should alarm investors in the company (valued at about $10 billion in January of 2014): as the price of storage falls, its core business of selling cloud-synced storage is more vulnerable every day. The company dropped prices to match other options like Google Drive in August of last year, but competitors like Microsoft’s OneDrive continue to undercut it. Just last week, Google introduced a photos product that made Carousel look like an also-ran overnight.
Meanwhile, success in the enterprise is anything but assured. Box, which pivoted from consumer file storage to enterprise collaboration years ago, has struggled to persuade Wall Street of its long-term value since going public earlier this year. Among other problems: selling to enterprises is incredibly expensive. Box’s marketing expenses have so far prevented it from turning a profit.
Will Dropbox's pivot to a business service go better than Box's did?
Probably the biggest thing Dropbox has done yet to court enterprise is the DFB API it released back in December — today it is improving on it by adding a new shared folder API, which will let organizations better manage shared files and keep data that they might not want to share from getting out. "Should a file look like it is troublesome for whatever reason," Baesman says, the shared-folder API "can check on the sharing relationship surrounding that file and quickly shut down any sharing." The goal is to contain the data, make sure it doesn't spread, and let IT personnel fix the problem.
Making Dropbox for Business even easier for big companies to plug into will likely be a high priority for the company going forward. And if the company wants to eventually go public somewhere near the $10 billion it was valued at last year, it's going to be on the back of Dropbox for Business and growth with huge enterprise companies — so it's safe to assume we'll keep seeing a succession of incremental improvements for businesses. It might not be what gets consumers excited, but it is what Dropbox will need if it wants to go public.