Dropbox For Business Pursues A Sensible Consumerization Path Into The Enterprise

Dropbox has 275 million users. It's steadily improving the business capability of its Internet file system. That makes it important to understand what Dropbox is doing and why it matters to business. Here's what they are doing:

  • Last week, Dropbox secured a $500 million line of credit. My take is that Dropbox will use this money to build datacenters as well as global business capacity. Today, the company uses cheap storage from Amazon S3, but it keeps all the juice (like user permissions, search metadata, and application data) in its own data centers. This cheap funding (debt is much cheaper than equity) gives it a reasonable capital structure to buy lots of servers to build global applications.
  • Yesterday, Dropbox made its new Dropbox for Business "linked folders" generally available. This feature lets technology managers give employees a business Dropbox that it can secure and own. Employees can link the business Dropbox to their personal Dropbox so they see all their files in a consistent way. When an employee leavers the firm, the business Dropbox disappears from personal devices (if it works as designed). Customers like Facebook are using this product and seeing a big shift in its employees moving business files from a personal Dropbox to the new business Dropbox.
  • Dropbox has attracted 100,000 disrupters -- many of which are targeting mobile moments. Mobile moments open up a universe of new personal and business applications to get things done in a small moments of need. This level of partner investment is a huge deal because it signals that Dropbox is becoming a file system for the Internet era. Using Dropbox, these innovators can simply inherit the entire file management and storage sub-system they need.

Here's why Dropbox for Business matters to technology managers:

  • Consumerization is a powerful force, particularly in the age of the customer when employees seek to serve customers on the go in any moment of engagement. Dropbox for Business with linked folders is a great architecture to address the security and administrative responsibilities of business while preserving the privacy and freedom of the person. Evernote pioneered this model two years ago and Dropbox has implemented it. We believe most SaaS companies with a business and personal market should adopt this model. For technology managers, this is a way out of the consumerization conundrum: giving employees a familiar tool with business capabilities.
  • Dropbox is forming a new platform for applications. Pal @RobKoplowitz and I believe that Dropbox and also Box are becoming new Internet platforms that centralize files and file management services. This simple value proposition -- just use our file services -- accelerates application innovation and becomes new infrastructure for SaaS applications, hence for companies. CIOs and technology managers need to understand this new paradigm: the file system for the Internet era.
  • Dropbox is following a sensible path into the enterprise: one feature set at a time. Just like Apple and Google before it, Dropbox is slowly adding business functionality like this new linked folder, better security features, and a stronger sales and service channel.  Forrester's enterprise customers are still wary of cloud storage solutions generally and Dropbox specifically, but if Dropbox continues on this path, it could wind up winning over more technology managers in non-regulated industries. In the meantime, Box, Egnyte, Citrix Sharefile, VMWare Airwatch, and scores of other cloud file sync & share companies offer more business-ready services.

Comments

Pal @rkoplowitz not @robkoplowitz ;)

Nice piece Ted!

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