If you're old enough to remember what it was like when the world's first computers came to market, you'll probably be reminded of how cumbersome it was to store your data. From magnetic tapes to hard and floppy disks, these storage tools were vulnerable to theft, loss, and even demagnetization resulting in the loss of data. Developers found a way around that with the advent of the portable storage device—external hard drives and memory sticks. But carrying those around proved to be just as bothersome. So what other option was there? Enter the cloud.
Cloud storage is a way for people and companies to store data electronically without the need for any physical storage device. This data can be accessed and shared easily from any location, as long as the user has access to a computer. Dropbox is one of the biggest names in cloud storage. But as with any other business, competitors are chipping away at its market share. Read on to find out about some of the biggest names that pose a threat to Dropbox's place in the industry.
- Dropbox is one of the world's biggest names in file storage services, with more than half a billion registered users.
- Box has focused on implementing data security and compliance features into its products.
- Alphabet provides users with a seamless, integrated solution to multiple problems with Google Drive.
- Amazon Drive offers a free service for Prime members, along with more storage options for an additional price.
Dropbox: An Overview
The popular file storage company Dropbox (DBX) has experienced financial success by almost any measure. The company, founded in 2007 and based in San Francisco, has amassed more than 500 million registered users and hundreds of thousands of paying business customers.
Dropbox boasts more than half a billion registered users worldwide.
Dropbox offers a series of different plans for its users:
- Basic: This free plan gives users 2 GB of storage, along with free document scanning and uploads from a camera. Users get access to their files from any location.
- Plus: For $9.99 each month, Dropbox provides 2 TB of storage, access to the company's Smart Sync, mobile offline folders, as well as perks from the previous plan.
- Professional: The final plan, priced at $16.58 per month, offers 3 TB of data storage. Along with the perks from the Plus plan, users are also able to conduct full-text searches on their files as well as the ability to search images with text for keywords.
Dropbox announced its intention to go public, filing paperwork for an initial public offering (IPO) on Feb. 23, 2018. The company said it hoped to raise $500 million. The company raised a total of $756 million when it debuted on the public market on Mar. 23, 2018, with shares priced at $21 per share. Ahead of its IPO, the company announced a deeper integration with Salesforce (CRM) in early March of 2018.
In November 2019, Dropbox reported revenue of $428.2 million and earnings of 13 cents per share for the third quarter of 2019. The company said it had 14 million paying users in the quarter with the average revenue per paying coming in a $123.15.
Despite these impressive numbers, three well-capitalized Dropbox competitors in the file-sharing and cloud storage space pose competitive threats to the company.
Box (BOX) runs an enterprise management platform for individuals and businesses. The company's focus on the enterprise and business segment of the market presents a competitive threat to Dropbox. Dropbox has focused its efforts on growing its large consumer user base, while Box has focused on implementing data security and compliance features into its products. As a result, businesses that need to regulate and control access to data are likely to prefer Box's solutions. As businesses become more concerned about security, Dropbox may have to catch up with Box.
The company serves a wide range of customers, including individuals who need to share and access files across multiple devices, as well as large businesses that need secure document retention.
Box was founded in 2005 and has more than 41 million users with over 85,000 business customers. The company manages data for 69% of Fortune 500 companies in a variety of industries. Its solutions include collaboration, file sharing, mobility, security, content management, along with its proprietary content platform service. Box offers its customers three types of pricing plans:
- Starter Plan: This plan offers users 100 GB of storage for $4.75 per month, which is billed annually. The plan allows a minimum of three users with a maximum of 10, and get 2 GB of file uploads included.
- Business Plan: For $14.25 each month—billed annually—users of this plan get unlimited storage along with data loss protection and 5 GB worth of file uploads. Like the previous plan, a minimum of three users is required, but there is no maximum.
- Business Plus: Along with the benefits of the Business Plan, users of the Business Plus are able to add unlimited external collaborators to their plan. The cost is $23.75 per month—also billed annually.
While Dropbox offers a solution to one problem, one of its competitors provides users with a seamless, integrated solution to multiple problems. Alphabet (GOOG) operates Google Drive, which allows users to store files in the cloud, access them from anywhere, and export them when needed. One of the challenges Dropbox faces is generating the same high level of engagement that Google achieves with its users. To avoid losing market share to Google, Dropbox must differentiate its storage solution or match Google's level of engagement with its customers.
Google provides synergies for its users by integrating its service with Google Docs, Gmail, and other collaboration tools. Users can share specific files and folders, grant read or write access to those files, and sync files across multiple devices. Customers who use Google's search engine, Chrome and Google Docs spreadsheets may rapidly adopt Google Drive for cloud storage.
Google offers different plan options for its drive users:
- 15 GB: The most basic plan gives users 15 GB of storage for free.
- 100 GB: Under this plan, get 100 GB of storage space, get access to Google Experts, and add family members to their plan. Drive users can choose to pay $1.99 each month or $19.99 per year. This works out to a savings of 16% each year.
- 200 GB: For $2.99 each month or $29.99 per year, users can get 200 GB of storage space, plus the perks of the previous plan. The plan also offers users 3% back in the Google Store.
- 2 TB: This plan offers the same benefits of the previous plan, but gives 10% back in the Google Store for $9.99 each month of $99.99 annually.
Google also offers plans with 10 TB, 20 TB, and 30 TB storage options.
Google Apps customers also receive video and voice calls, and access-integrated online calendars, online spreadsheets, and slides in addition to Google Drive.
The company officially launched Amazon Web Services in 2006, catering to small businesses and large enterprises. The service provides a wealth of on-demand cloud services including computing platforms, developer tools, game technology, media services, migration, security, as well as storage services. But the company's services aren't meant just for big business. In fact, Amazon Drive is also a place where individuals can store and share their files.
If you're looking for storage on Amazon, you'll have to choose from a number of different options, which were introduced in 2011.
- Basic: This option is free and is one of the perks offered to Prime members. The membership gives you unlimited photo and file storage along with 5 GB of video storage. Members can share and access their files from nearly any device.
- 100 GB Plan: For $19.99 a year, users can purchase 100 GB of storage space. If you're a Prime member, photos don't count against the storage limit set on this plan.
- 1 TB Plan: This is the priciest plan offered by Amazon Drive. Priced at $59.99, the plan also doesn't count photo storage for Prime members.