dropbox_general

Gil C / Shutterstock

Enterprise


After several months of building on a new strategy to capture more enterprise customers, Dropbox, the popular cloud-storage and file-sharing service, will later this week announce that it has landed subscription music service Spotify as a corporate customer, sources tell Re/code.

While the size of the deal couldn’t be determined, the announcement is the first in a series of expected customer wins that Dropbox will make in the coming weeks as it declares its intention to be a serious player in the enterprise market. It’s also meant to counter the perception that Box, a smaller rival with a dedicated focus on large enterprise customers, is the stronger player among corporate customers.

The news comes a month after Dropbox launched Project Harmony, an overlay for Microsoft Office that allows multiple people to collaborate on documents in real time and to synchronize them with documents stored in shared folders in the cloud. That product put Dropbox in competition with Google Drive and Microsoft’s Office 365.

On the backs of some 200 million users, Dropbox has burrowed its way deeply into some four million companies. That gives it a distinct strength in numbers over Box, which at its last publicly disclosed count had 25 million end users and 34,000 companies paying for its services.

One challenge: Long viewed as a company with a consumer-facing product that people tend to use at work without authorization from the corporate IT department, Dropbox has in the last year sought to broaden its appeal to corporate customers.

First came a tool to give IT administrators the ability to manage corporate accounts, and then came a feature to allow the separation of work-related files from personal accounts. People with personal Dropbox accounts can easily join companies that operate their own corporate accounts, without fear of losing control of personal files like their family pictures.

The move into corporate accounts also coincides with a wider effort by Dropbox to diversify its offerings. It has stepped up its pace of acquisitions, and has recently been acquiring small startups at a rate of about one or more per month, much of that in an effort to build a family of apps around the Dropbox ecosystem. Recent examples include the photo app Loom, a collaborative document tool called Hackpad, a corporate chat tool called Zulip and a social e-book reader called Readmill.

Though the plan is similar in some respects to that of Box, the differences are notable: Where Dropbox wants to build a family of apps that take advantage of its file-syncing technology, Box wants to be the backend platform on which its corporate customers build their own custom apps.

Dropbox has also been boosting its funding ahead of an expected IPO. Last month it secured $500 million in debt financing on top of a $350 million round of private equity funding that valued Dropbox at $10 billion.

Rival Box filed papers for an IPO in March but has since delayed the timing of its offering.

The Spotify announcement by Dropbox follows the disclosure by Box last week that it had landed industrial giant GE as a corporate customer.

Dropbox founder Drew Houston will be speaking at the Code Conference later this month.



1 comments
EWheeler
EWheeler

  First off, the largely hyped merge from a consumer focus to an enterprise focus resulted in nothing more than Dropbox creating a new "business folder" atop the existing "personal" folder. This does not make the service provider any more prepared to handle business demands. The fact that more tech media are not commenting on this ridiculous happening is quite astounding. Admittedly, Project Harmony is a cool idea - and only of the only recent announcements that has any appeal to enterprise (I mean what do they care about carousel). That said, it should be mentioned that this is not even available to Dropbox users yet! Moreover, they do not even have a release date out yet. 

I found it a little strange the Box felt the need to publicize their GE deal so passionately when they claimed to already command 97% of Fortune 500s. Now less than a week later we have Dropbox announcing a new enterprise deal; I fear we will be dealing with a pissing contest between who can bag the better enterprise deals (looks like Box won this round). 

In short, I feel Dropbox will really need to step up their game if they want to turn around their "consumer" image. Of course Box also had the foundation of a consumer provider, even if they were a little quicker in noticing where the trend was headed. Enterprises are much better off finding a service provider that has an established enterprise track record, and has been designed for true business solutions from the beginning. 

Follow

Get every new post delivered to your Inbox.

Join 299,352 other followers