Drew Houston, Dropbox, Code Conference

Asa Mathat

General


However will Dropbox survive the brutal price battle waged by Microsoft and Google in the fight for customers of cloud file-storage services?

“We’re not cutting prices right now,” Drew Houston, CEO of Dropbox told Re/code’s Liz Gannes and Walt Mossberg at the inaugural Code Conference on Wednesday.

Houston is betting its customers will stick with them if they added new services.

In March, Google slashed prices for its Google Drive product, which now costs $23.88 per year for 100 gigabytes of storage space. The price of Microsoft’s OneDrive storage product is also well below Dropbox’s and costs $50 per year for the same storage volume. Dropbox charges $99 a year for comparable capacity.

“Our users go try these things and often they come back,” he said, referring to Dropbox’s rivals.

Still, Houston conceded that Dropbox’s competitors have “narrowed the gap” on what he believed was an early head start in the category. As a result, Dropbox is spending a great deal of time on new ideas. One is a photo sharing app called Carousel. Another is a yet-to-launch collaboration tool built atop Microsoft Office called Project Harmony; Houston said it should be out by end of year.

Separately, Houston also addressed the topic of the NSA and the possibility that it had secretly accessed files and data stored in Dropbox user’s accounts.

“I think everyone has been really frustrated by the issue in general and the way it’s been handled,” Houston said.

But is it possible that the NSA surreptitiously accessed Dropbox accounts through a secret back door?

“The NSA doesn’t send a muffin basket and say, ‘Welcome to this thing,’” he said. “A back door in the infrastructure I don’t think is likely.”

But he did cite reports of such backdoor infiltrations happening, implying that a company may never know for sure.





2 comments
CalTowns
CalTowns

At this point it doesn't really make sense to cut prices. The market isn't at a place where they're guaranteed to make back the revenue they'd be losing by cutting costs on existing customers, especially since they're targeting consumer users, who can mostly get by with the free service. I actually like Dropbox as a free service, but that's it, I certainly wouldn't pay for it. It can get slow at times, it doesn't have a lot of features that my company provided cloud for work (drivehq) has, and it has made the headlines on multiple occasions for security concerns. I hope the company can continue to survive, but I don't really see where they're making money, and if they go public they won't be able to rely on the money they've earned from funding. They need to develop a money-maker badly or, sadly, they may end up being acquired by a larger company.

Bahmani
Bahmani

The real price point of cloud storage is more like $19 per year, per Terabyte. If I can buy my own a cloud enabled standalone local drive with 3 Terabytes for under $180, and have Comcast serve it up to me anywhere in the world on any device,  Why would I pay a cloud server served version for anything more than 10%?


The significance of DB's poor choice in hiring (all Board members are paid) Condi Rice as an advisor, the thinking being that someone so responsible for the utter destruction of what is barely left of any US international honor and reputation, in order to help them "gain access to european markets" is stunnignly naive and arrogant.


Almost as arrogant as assuming that white kids can't understand rap lyrics and need a website to get the deep poetic true dat inner city meaning of "booty".

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