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Case report #2 
Dropbox 
Cloud storage services 
Solvay Brussels School of Economics & Management 
GEST-S-484 Technology & Strategy 
Professor Manuel Hensmans 
Group 4 
Andrea Balducci 
Axel Forrez 
Gabriel Spinnler 
Thibaut Van Vracem
Dropbox 
is 
an 
American 
cloud 
storage 
and 
online 
backup 
services 
company 
founded 
in 
2007 
and 
headquartered 
in 
San 
Francisco. 
Since 
the 
launch 
of 
its 
first 
product 
in 
2008, 
Dropbox 
has 
experienced 
a 
tremendous 
growth, 
both 
in 
terms 
of 
profits 
and 
number 
of 
users. 
This 
second 
case 
report 
focuses 
on 
the 
future 
of 
Dropbox 
and 
the 
development 
of 
strategic 
options 
for 
the 
company. 
Near 
future 
Case 
question 
5: 
perform 
a 
TOWS 
analysis 
of 
your 
organization 
SWOT analysis 
Strengths 
(1) 
Large 
consumer 
base 
and 
strong 
brand; 
with 
more 
than 
275 
Million 
users, 
Dropbox 
is 
the 
leading 
player 
in 
the 
cloud 
storage 
industry. 
The 
penetration 
of 
Dropbox 
within 
businesses 
is 
also 
indirectly 
very 
high 
as 
many 
consumers 
also 
use 
this 
service 
for 
work 
purposes. 
Dropbox 
is 
seen 
as 
a 
‘hot 
company’ 
and 
has 
been 
able 
to 
attract 
a 
lot 
of 
positive 
‘earned 
media’. 
(2) 
Innovative 
start-­‐up 
company 
culture; 
the 
company 
follows 
the 
‘simplify 
your 
life’ 
mindset 
and 
foster 
innovation 
through 
employee 
freedom. 
Furthermore, 
the 
users/ 
employee 
ratio 
is 
extremely 
high 
(more 
than 
300.000 
users 
per 
employee). 
(3) 
Ability 
to 
raise 
funds; 
Dropbox 
is 
backed 
by 
investors 
like 
Sequoia 
Capital, 
arguably 
one 
of 
the 
best 
tech 
venture 
capital 
firm. 
With 
a 
lot 
of 
money 
recently 
raised 
and 
favorable 
prospects 
for 
the 
future, 
Dropbox 
is 
certainly 
able 
to 
get 
funding 
to 
fuel 
its 
growth. 
(4) 
Attractive 
and 
quality 
products; 
consumers 
praise 
the 
simplicity, 
rapidity 
and 
uniformity 
across 
devices 
of 
the 
Dropbox 
product. 
Moreover, 
Dropbox 
recently 
announced 
the 
future 
launch 
of 
‘Project 
Harmony’ 
which 
will 
allow 
users 
to 
work 
together 
simultaneously 
on 
any 
document 
in 
Microsoft 
Office 
applications. 
On 
the 
whole, 
the 
ability 
to 
develop 
user-­‐friendly 
solutions 
is 
a 
real 
strength. 
(5) 
Strategic 
partnerships 
and 
acquisitions; 
with 
more 
than 
100.000 
compatible 
applications 
on 
its 
platform 
and 
partners 
as 
Facebook, 
Dell 
and 
Samsung, 
Dropbox 
is 
able 
to 
attract 
more 
customers 
GEST-­‐S-­‐484 
Technology 
& 
Strategy 
Group 
4 
– 
Dropbox
and 
bring 
more 
value 
to 
its 
product. 
The 
ability 
to 
create 
and 
develop 
strategic 
partnerships 
and 
integrate 
acquired 
companies 
is 
definitively 
a 
strength. 
(6) 
Charismatic 
and 
visionary 
leadership; 
Drew 
Houston, 
CEO 
of 
the 
company, 
created 
Dropbox 
initially 
as 
a 
way 
to 
solve 
its 
own 
problems. 
He 
has 
a 
clear 
vision 
for 
the 
long-­‐term 
future 
and 
under 
his 
leadership, 
the 
company 
has 
experienced 
an 
exponential 
growth. 
(7) 
Extremely 
talented 
workforce; 
Dropbox 
is 
particularly 
good 
at 
attracting 
extremely 
qualified 
employees. 
They 
are 
literally 
trying 
to 
hire 
the 
best 
in 
the 
world 
for 
each 
position 
(e.g. 
Python 
language 
inventor, 
Facebook 
Like 
button 
designer 
and 
more 
recently, 
Condoleezza 
Rice, 
who 
will 
bring 
her 
international 
relations 
expertise 
to 
the 
table). 
Weaknesses 
(1) 
Weaker 
user 
data 
security 
than 
competitors; 
as 
Dropbox 
is 
not 
yet 
compliant 
with 
numerous 
quality 
standards 
like 
HIPAA, 
FERPA 
and 
SAS70, 
it 
is 
being 
perceived 
as 
having 
a 
weak 
security 
system 
in 
comparison 
to 
its 
main 
competitors. 
(2) 
Late 
entrance 
in 
the 
B2B 
segment; 
the 
company 
has 
from 
its 
beginning 
targeted 
individuals 
as 
well 
as 
corporation. 
This 
has 
resulted 
in 
a 
lack 
of 
focus 
on 
the 
latter. 
Together 
with 
this 
lack 
of 
focus, 
it 
also 
lacks 
differentiation, 
namely 
because 
Dropbox 
is 
mainly 
focused 
on 
cloud 
storage 
while 
competitors 
provide 
more 
cloud 
computing 
services. 
(3) 
Lower 
space 
offered/ 
price 
ratio; 
in 
comparison 
to 
its 
competitors 
Dropbox 
offer 
less 
free 
space 
to 
free 
users. 
In 
addition, 
the 
competitors’ 
prices 
are 
also 
more 
attractive 
for 
premium 
users. 
(4) 
Potential 
great 
man 
dependence; 
the 
earlier 
described 
strength 
automatically 
forms 
a 
weakness. 
As 
a 
large 
part 
of 
the 
company 
thrives 
on 
Houston’s 
successes, 
it 
is 
possible 
that 
without 
him, 
the 
company 
would 
have 
difficulties 
defining 
its 
strategy 
for 
the 
future. 
(5) 
Low 
presence 
in 
emerging 
markets; 
Dropbox 
is 
extremely 
strong 
in 
North 
America 
and 
Europe 
(with 
more 
than 
60% 
of 
pageviews 
generated). 
However, 
the 
major 
emerging 
markets 
GEST-­‐S-­‐484 
Technology 
& 
Strategy 
Group 
4 
– 
Dropbox
account 
for 
a 
very 
small 
share: 
3% 
of 
Dropbox’s 
pageviews 
in 
Brazil, 
5% 
in 
India, 
2,5% 
in 
Russia 
and 
even 
less 
in 
China 
and 
Indonesia1. 
(6) 
Low 
premium 
users/free 
users 
conversion 
rate; 
Dropbox 
follows 
a 
classical 
freemium 
business 
model. 
Although 
the 
company’s 
user 
base 
is 
growing 
faster 
than 
Box’, 
the 
conversion 
rate 
of 
a 
user 
actually 
paying 
for 
the 
service 
is 
only 
between 
3 
and 
4 
% 
in 
comparison 
to 
Box’ 
6 
to 
8%. 
Opportunities 
(1) 
Trend 
towards 
the 
cloud 
for 
businesses; 
firms 
are 
more 
and 
more 
seeking 
cloud 
solution 
to 
store, 
share 
and 
organize 
their 
files. 
Linked 
to 
this, 
is 
the 
growing 
demand 
of 
corporations 
to 
access 
more 
collaborative 
tools 
and 
content 
management 
solutions 
on 
the 
same 
platforms. 
(2) 
Rise 
of 
emerging 
markets 
in 
the 
cloud; 
analysts 
predict 
the 
emerging 
markets 
will 
outpace 
cloud 
storage 
spendings 
in 
more 
mature 
regions 
and 
in 
turn 
drive 
the 
worldwide 
enterprise 
storage 
growth 
in 
the 
next 
few 
years. 
(3) 
Growing 
global 
internet 
penetration; 
as 
internet 
is 
more 
and 
more 
present 
(especially 
in 
emerging 
economies), 
more 
and 
more 
users 
can 
access 
cloud 
services. 
(4) 
Businesses 
seeking 
to 
exploit 
big 
data; 
companies 
can 
nowadays 
collect 
data 
much 
more 
easily 
and 
are 
looking 
for 
ways 
to 
analyse 
and 
exploit 
this 
new 
goldmine. 
(5) 
Governments 
moving 
to 
cloud 
computing 
too; 
public 
institutions 
are 
also 
eager 
to 
benefit 
from 
the 
benefits 
of 
the 
cloud. 
(6) 
Consumers 
increasingly 
looking 
for 
open-­‐source 
applications; 
cloud 
computing 
could 
be 
the 
next 
stop 
for 
public 
collaborative 
software 
development. 
Threats 
(1) 
Plummeting 
price 
of 
cloud 
storage; 
cloud 
storage 
is 
becoming 
a 
commodity 
as 
the 
market 
prices 
are 
going 
down 
(driven 
down 
by 
the 
likes 
of 
Amazon 
and 
Google). 
Being 
too 
focused 
on 
cloud 
storage 
could 
lead 
to 
a 
strong 
erosion 
of 
profits 
in 
the 
future. 
1 Retrieved April 2014 from: http://www.appappeal.com/maps/dropbox 
GEST-­‐S-­‐484 
Technology 
& 
Strategy 
Group 
4 
– 
Dropbox
(2) 
Unfavorable 
public 
opinion; 
there 
is 
a 
risk 
than 
consumers 
start 
to 
develop 
a 
negative 
opinion 
towards 
Dropbox 
as 
the 
company 
grows 
larger, 
more 
focused 
towards 
businesses 
and 
if 
security 
scandals 
continue 
to 
arise. 
Rising 
privacy 
concerns 
have 
already 
been 
affecting 
other 
internet 
giants 
(e.g. 
Facebook, 
Google). 
(3) 
Increased 
global 
and 
local 
competition; 
Many 
giant 
software 
companies 
are 
developing 
their 
own 
global 
cloud 
solution 
(e.g. 
Google 
Drive, 
SkyDrive, 
iCloud); 
with 
their 
financial 
resources, 
reputation 
and 
ancillary 
services, 
they 
are 
a 
real 
threat. 
Moreover, 
regional 
competitors 
are 
emerging, 
especially 
in 
emerging 
markets 
(e.g. 
True 
Box 
in 
Brazil); 
they 
are 
better 
positioned 
to 
capture 
local 
demand 
in 
view 
of 
privacy 
issues 
faced 
by 
the 
global 
players 
from 
the 
US. 
(4) 
Disruption 
within 
the 
cloud 
storage 
industry; 
differentiated 
competitors 
may 
arise 
and 
disrupt 
the 
industry. 
One 
recent 
example 
is 
Transporter, 
a 
cloud 
storage 
hardware 
solution, 
which 
allows 
buyers 
to 
create 
their 
own 
private 
cloud 
server, 
therefore 
overcoming 
the 
security 
concern. 
(5) 
Government 
blockades 
in 
emerging 
markets; 
foreign 
governments 
may 
look 
unfavourably 
at 
US 
companies 
hosting 
national 
data 
on 
their 
servers. 
Therefore, 
there 
is 
a 
risk 
for 
US 
cloud 
storage 
companies 
to 
be 
banned 
from 
operating 
on 
several 
markets. 
GEST-­‐S-­‐484 
Technology 
& 
Strategy 
Group 
4 
– 
Dropbox
TOWS analysis 
Strengths 
and 
Opportunities 
(SO) 
(A) 
Leverage 
the 
current 
indirect 
penetration 
of 
Dropbox 
within 
businesses 
to 
focus 
efforts 
on 
Dropbox 
for 
Businesses; 
with 
employees 
using 
personal 
accounts 
at 
work 
and 
a 
strong 
product 
with 
many 
business 
applications 
(e.g. 
Project 
Harmony), 
all 
the 
factors 
are 
there 
to 
fully 
take 
advantage 
of 
the 
rising 
B2B 
demand 
for 
cloud 
services. 
(B) 
Partner 
its 
way 
in 
emerging 
markets; 
Dropbox 
can 
take 
advantage 
of 
the 
rise 
of 
emerging 
markets 
by 
using 
its 
strengths 
AND 
overcoming 
its 
low 
presence 
in 
the 
emerging 
market 
weakness: 
the 
company 
can 
leverage 
its 
ability 
to 
partner, 
strong 
brand 
perception 
and 
international 
relations 
skills 
to 
ally 
with 
companies 
in 
emerging 
countries. 
As 
with 
Facebook 
in 
the 
West, 
a 
strategic 
partnership 
with 
social 
network 
sites 
in 
emerging 
countries 
could 
increase 
Dropbox’ 
local 
presence. 
Potential 
partners 
would 
be 
Sina 
Weibo, 
Kaixin001, 
Qzone 
and 
RenRen 
in 
China. 
Partnerships 
with 
telecom 
operators 
are 
also 
an 
option. 
The 
Dropbox’s 
brand 
track 
record 
in 
the 
US 
and 
Europe 
and 
the 
product 
quality 
will 
help 
in 
the 
partnering 
process. 
(C) 
Transform 
users 
into 
developers; 
use 
as 
a 
strength 
the 
large 
consumer 
base 
at 
hand 
and 
the 
simplicity 
of 
Drobox’ 
product 
to 
allow 
users 
to 
work 
on 
an 
open 
source 
software 
platform 
to 
develop 
ideas 
that 
will 
add 
value 
to 
Dropbox, 
thus 
boosting 
open 
innovations. 
Weaknesses 
and 
Opportunities 
(WO) 
(A) 
Provide 
big 
data 
exploitation 
tools 
to 
customers; 
As 
Dropbox 
is 
already 
providing 
data 
storage 
and 
data 
organization 
to 
business 
customer, 
providing 
tools 
to 
exploit 
it 
could 
be 
a 
next 
step. 
This 
will 
overcome 
the 
lack 
of 
differentiation 
of 
the 
company 
and 
allow 
them 
to 
continue 
charging 
high 
prices. 
(B) 
Target 
governments 
and 
public 
institutions 
as 
customers; 
this 
is 
a 
risky 
challenge 
but 
if 
Dropbox 
is 
able 
to 
provide 
cloud 
services 
to 
governments, 
it 
will 
send 
a 
signal 
that 
the 
company 
security 
standards 
are 
really 
high 
and 
change 
CIOs’ 
opinions, 
which 
could 
lead 
to 
a 
virtuous 
circle. 
GEST-­‐S-­‐484 
Technology 
& 
Strategy 
Group 
4 
– 
Dropbox
Strengths 
and 
Threats 
(ST) 
(A) 
Focus 
on 
cloud 
computing 
and 
content 
management; 
in 
order 
to 
overcome 
the 
commoditization 
of 
cloud 
storage 
threat, 
Dropbox 
could 
shift 
its 
focus 
toward 
collaborative 
cloud 
services, 
the 
new 
value 
pools 
in 
the 
industry. 
The 
company 
can 
leverage 
the 
following 
strengths: 
ability 
to 
develop 
user-­‐friendly 
functionalities, 
new 
strategic 
partnerships 
(e.g. 
Akamai 
Technologies, 
KIO 
Networks) 
and 
its 
talented 
workforce. 
Moreover, 
with 
its 
large 
user 
base, 
Dropbox 
can 
easily 
reach 
customers 
with 
these 
new 
services. 
(B) 
Anticipate 
the 
potential 
disruption 
by 
acquiring 
or 
partnering 
with 
disrupters; 
Transporter 
can 
be 
very 
attractive 
for 
companies 
looking 
for 
more 
files 
security 
and 
could 
very 
well 
become 
a 
dominant 
design 
in 
the 
B2B 
segment. 
Therefore, 
acquiring 
such 
companies 
and 
combining 
their 
hardware 
with 
Dropbox 
software 
can 
be 
a 
strategic 
option. 
In 
the 
same 
vein, 
partnering 
with 
this 
company 
is 
a 
possibility 
too. 
Dropbox 
can 
here 
take 
advantage 
of 
its 
ability 
to 
partner 
and 
raise 
funds. 
Moreover, 
with 
its 
clear 
vision 
and 
talented 
workforce, 
Dropbox 
can 
bring 
Transporter’s 
technology 
to 
new 
heights 
and 
a 
larger 
customer 
base. 
(C) 
Invest 
in 
international 
relations 
with 
emerging 
markets; 
to 
overcome 
potential 
governmental 
blockades 
and 
face 
the 
local 
competition, 
Dropbox 
should 
invest 
in 
international 
relations 
(e.g. 
with 
C. 
Rice’s 
expertise 
and 
by 
hiring 
new 
qualified 
employees). 
Weaknesses 
and 
Threats 
(WT) 
(A) 
Go 
premium 
in 
cloud 
computing; 
as 
cloud 
storage 
prices 
are 
plummeting, 
expanding 
the 
offer 
to 
content 
management, 
collaborative 
applications, 
big 
data 
management 
and 
other 
innovative 
value-­‐adding 
applications 
in 
the 
B2B 
segment 
could 
allow 
the 
company 
to 
maintain 
its 
high 
margins. 
By 
doing 
so, 
Dropbox 
can 
minimize 
its 
weaknesses 
in 
terms 
of 
lack 
of 
focus 
and 
differentiation 
and 
transform 
its 
higher 
prices 
(compared 
to 
competitors) 
into 
an 
advantage. 
(B) 
Segment 
the 
B2B 
market 
and 
increase 
focus; 
the 
idea 
here 
is 
to 
segment 
the 
B2B 
market 
into 
two 
categories: 
(1) 
firms 
looking 
for 
more 
security 
and 
a 
more 
private 
(for 
which 
Transporter 
could 
be 
attractive) 
and 
(2) 
firms 
looking 
for 
a 
more 
opened 
cloud, 
more 
collaboration 
with 
partners 
and 
with 
lower 
security 
requirements. 
The 
disruptive 
threat, 
the 
lack 
of 
differentiation 
and 
the 
security 
weaknesses 
could 
be 
avoided 
by 
focusing 
on 
the 
latter 
and 
by 
providing 
more 
inter-­‐firm 
collaboration 
through 
the 
cloud. 
GEST-­‐S-­‐484 
Technology 
& 
Strategy 
Group 
4 
– 
Dropbox
Long-­‐term 
vision 
Case 
question 
6: 
what 
is 
your 
vision 
for 
the 
future? 
PESTEL 
Analysis 
P 
• Intensifying 
Government’s 
control 
on 
Internet 
traffic, 
privacy 
issues 
(e.g.: 
NSA-­‐PRISM 
program) 
• Internal 
political 
issues 
will 
arise 
as 
a 
barrier 
to 
adoption 
• Different 
policies 
across 
countries 
(information 
privacy, 
security, 
national 
network 
policy 
and 
jurisdiction) 
• Difficulties 
to 
address 
issues 
such 
as 
security, 
privacy, 
location 
and 
data 
ownership 
for 
policy 
makers 
• US-­‐EU 
Safe 
Harbour 
Act 
and 
European 
Union 
Data 
Protection 
Directive: 
give 
a 
close 
look 
at 
the 
evolution 
of 
the 
relationship 
between 
this 
EU 
and 
US. 
E 
• Acceleration 
of 
the 
adoption 
following 
the 
economic 
crisis: 
cheaper 
cloud 
models 
• From 
a 
capital-­‐intensive 
transaction 
to 
an 
on-­‐going 
operational 
expense: 
pay-­‐per-­‐use 
model 
more 
flexible 
than 
old 
IT 
model 
• Quick 
cloud 
storage 
prices 
drop 
• Growth 
of 
the 
cloud 
services 
market, 
in 
both 
B2B 
and 
B2C 
segments 
• Emerging 
markets 
will 
lead 
the 
demand 
S 
• Populations 
more 
and 
more 
tech 
savvy: 
need 
to 
access 
to 
your 
data 
from 
everywhere, 
anytime 
and 
in 
all 
devices. 
• File 
sharing 
is 
increasingly 
common 
(sync 
‘n 
share) 
• Change 
in 
companies’ 
culture: 
data 
stored 
outside 
of 
the 
company 
• Confidentiality 
exigencies 
from 
the 
customers 
different 
across 
countries 
T 
• Development 
of 
mobile 
internet: 
More 
and 
more 
connected 
devices 
• A 
lot 
of 
technologies 
underpin 
the 
advent 
of 
cloud 
computing 
(e.g. 
virtualization, 
SOA, 
Internet, 
universal 
high-­‐speed 
bandwidth) 
E 
• More 
environmentally 
friendly 
as 
outsourcing 
will 
help 
reduce 
the 
energy 
consumption 
(environmental 
friendly 
datacenters) 
L 
• Cross-­‐countries 
differences 
in 
terms 
of 
companies-­‐ 
and 
customers-­‐related 
information 
GEST-­‐S-­‐484 
Technology 
& 
Strategy 
Group 
4 
– 
Dropbox
Scenario analysis – Confidentiality/security and commoditization 
Two 
variables 
have 
been 
considered: 
Commodity: 
All 
services 
such 
as 
access 
to 
Internet, 
cloud 
storage, 
become 
so 
cheap 
that 
it 
will 
be 
affordable 
and 
accessible 
for 
all 
the 
world 
population. 
(E, 
T, 
E) 
Security/Confidentiality: 
How 
secure 
and 
confidential 
the 
cloud 
storage 
will 
be 
in 
the 
future. 
In 
other 
words, 
how 
the 
government 
and 
the 
law 
will 
regulate 
the 
industry 
of 
cloud 
computing 
and 
transfer 
of 
data 
across 
countries. 
(e.g. 
Dropbox 
putting 
Condoleezza 
Rice 
(NSA 
surveillance 
advocate) 
on 
its 
board 
can 
shock 
privacy 
advocates). 
(P, 
S, 
L) 
GEST-­‐S-­‐484 
Technology 
& 
Strategy 
Group 
4 
– 
Dropbox
Who is the strategic customer? From B2C to businesses 
There 
are 
different 
stakeholders 
in 
the 
cloud 
industry: 
• Providers 
• Developers 
• Users 
(B2C 
or 
B2B) 
• Prosumers; 
the 
future 
may 
enable 
users 
to 
become 
providers 
and 
consumers 
at 
the 
same 
time 
For 
now, 
the 
profit 
pools 
are 
switching 
from 
premium 
consumers 
to 
businesses 
that 
buy 
extra 
storage 
space 
and 
other 
features 
that 
are 
not 
available 
for 
free. 
Indeed, 
the 
conversion 
rate 
on 
the 
consumer 
side 
is 
rather 
low 
and 
as 
we 
seen 
above, 
businesses 
are 
more 
and 
more 
eager 
to 
adopt 
cloud 
solutions. 
One 
of 
Dropbox’s 
recent 
strategies 
to 
hit 
business 
customers 
was 
to 
give 
away 
free 
storage 
space 
to 
university 
students 
for 
two 
years, 
through 
the 
Space 
Race. 
Two 
advantage 
of 
this 
strategy: 
firstly, 
the 
students 
will 
be 
“dependent” 
of 
this 
surplus 
storage 
and 
may 
be 
willing 
to 
pay 
in 
order 
to 
keep 
this 
storage 
space 
at 
the 
end 
of 
the 
two 
years. 
Secondly, 
university 
students 
are 
often 
future 
employees 
in 
corporations. 
This 
will 
allow 
to 
Dropbox 
to 
indirectly 
penetrate 
the 
companies 
segment 
and 
will 
increase 
its 
bargaining 
power 
in 
selling 
Dropbox 
for 
Business. 
Key customer success factors 
Since 
we 
have 
identified 
businesses 
as 
the 
main 
paying 
customers, 
we 
will 
focus 
on 
the 
KSF 
in 
reaching 
the 
B2B 
segment. 
(1) 
High 
security; 
CIOs 
often 
have 
high 
security 
requirements. 
That 
is 
why 
gaining 
their 
trust 
is 
crucial. 
Therefore, 
compliance 
with 
security 
standards 
and 
the 
law 
is 
key. 
Moreover, 
since 
Dropbox 
aim 
to 
be 
a 
global 
player, 
the 
firm 
will 
have 
to 
manage 
the 
different 
national 
laws 
in 
terms 
of 
data 
protection 
and 
availability. 
(2) 
Attractive 
ancillary 
services 
and 
products; 
Customers 
need 
more 
than 
simply 
cloud 
storage. 
They 
need 
complementary 
cloud 
services 
to 
create 
real 
value 
for 
the 
customer 
(e.g. 
enhanced 
collaboration, 
easier 
files 
access 
and 
content 
management, 
integration 
with 
e-­‐mails). 
(3) 
Attractive 
price; 
business 
customers 
have 
a 
lower 
price 
sensitivity 
and 
different 
incentives 
than 
consumers 
but 
the 
price 
remain 
an 
important 
decision 
factor; 
Dropbox 
operates 
in 
a 
very 
competitive 
landscape. 
Segmentation 
can 
also 
help 
to 
capture 
more 
value 
(e.g. 
company 
size, 
functionalities 
required). 
GEST-­‐S-­‐484 
Technology 
& 
Strategy 
Group 
4 
– 
Dropbox
Strategic groups cloud computing 
Currently, 
in 
the 
cloud 
computing 
industry, 
there 
three 
type 
of 
services: 
• SaaS 
(Software 
as 
a 
Service) 
• Paas 
(Platform 
as 
a 
Service) 
• Iaas 
(Infrastructure 
as 
a 
Services) 
Dropbox 
is 
currently 
in 
the 
SaaS 
part, 
but 
we 
forecast 
that 
in 
the 
long 
term, 
it 
will 
move 
slowly 
to 
a 
PaaS 
model, 
as 
Google 
and 
Microsoft 
already 
did. 
The 
three 
categories 
differ 
from 
each 
other 
following 
two 
different 
criteria 
(the 
axis 
variable 
below): 
(A) 
Control; 
how 
much 
of 
your 
computing 
do 
you 
trust 
to 
other 
providers, 
and 
how 
much 
do 
you 
keep 
in 
house? 
The 
higher 
on 
the 
ordinate 
axis, 
the 
bigger 
the 
scale 
of 
the 
company. 
In 
the 
bottom 
you 
have 
individuals 
(end 
users). 
(B) 
Value 
created; 
the 
ability 
of 
the 
Cloud 
service 
to 
justify 
premium 
prices. 
GEST-­‐S-­‐484 
Technology 
& 
Strategy 
Group 
4 
– 
Dropbox
(1) 
SaaS 
(Gmail, 
Google 
Doc, 
Box, 
Dropbox, 
SAP, 
Microsoft 
Office 
365) 
• Easy 
to 
use: 
everything 
can 
be 
managed 
by 
vendors 
• Targeting 
End-­‐Users 
(2) 
PaaS 
(Amazon, 
Google 
app 
engine, 
Facebook) 
• Most 
complex 
• Highly 
scalable 
• High 
intractability 
and 
effectiveness 
of 
large 
staff 
(3) 
IaaS 
(Amazon 
EC2, 
Rackspace, 
Windows 
Azure, 
Google 
compute 
engine). 
• Users 
maintain 
complete 
responsibility 
for 
the 
maintenance 
of 
the 
system 
Mobility barriers 
« 
The 
barriers 
from 
SaaS 
to 
PaaS 
are 
that 
their 
systems 
are 
tailored 
to 
customer-­‐specific 
applications 
and 
internal 
infrastructure, 
limiting 
PaaS 
use 
to 
small, 
non-­‐critical 
applications 
which 
require 
quick, 
global 
deployment 
The 
barriers 
to 
using 
IaaS 
services 
are 
similar 
to 
PaaS, 
where 
CIOs 
struggle 
with 
trade-­‐offs 
between 
agility 
and 
issues 
of 
cost, 
security, 
and 
availability 
»2 
The 
Barrier 
for 
Dropbox 
to 
move 
towards 
the 
upper-­‐right 
corner 
will 
be: 
(1) 
make 
investment 
to 
improve 
their 
security 
and 
thus 
convince 
businesses 
to 
adopt 
Dropbox; 
(2) 
create 
value 
differently 
than 
simply 
supply 
cloud 
storage 
as 
it 
is 
becoming 
a 
commodity. 
2 
http://ceo2ceos.com/2011/06/what-­‐are-­‐the-­‐barriers-­‐to-­‐moving-­‐to-­‐the-­‐cloud/ 
GEST-­‐S-­‐484 
Technology 
& 
Strategy 
Group 
4 
– 
Dropbox
Vision statement – How to realize it? 
Dropbox’s 
long-­‐term 
vision 
is 
to 
‘bury 
the 
hard 
drive’ 
and 
be 
the 
world’s 
leading 
storage 
provider. 
Furthermore, 
their 
focus 
will 
be 
on 
centralizing 
all 
the 
world 
data 
on 
the 
cloud 
(pictures 
to 
share 
with 
friends, 
files 
to 
collaborate 
with 
you 
colleagues, 
music, 
etc.). 
The 
goal 
is 
that 
everyone 
should 
be 
able 
to 
access 
all 
their 
files 
and 
data 
through 
the 
cloud 
everywhere, 
at 
any 
time, 
and 
be 
able 
to 
share 
it 
with 
everyone 
quickly 
and 
easily. 
Dropbox 
also 
wishes 
to 
increase 
the 
world 
productivity 
by 
simplifying 
people’s 
life 
and 
companies’ 
operations. 
In 
order 
to 
achieve 
these 
long-­‐term 
goals, 
Dropbox 
will 
have 
to 
improve 
security 
in 
order 
to 
successfully 
reach 
businesses. 
Buying 
or 
partnering 
with 
companies 
specialized 
in 
data 
security 
and 
encryption 
is 
a 
way 
to 
achieve 
this 
objective. 
Moreover, 
Dropbox 
will 
have 
to 
create 
value 
by 
increasing 
the 
number 
of 
added 
value 
services; 
in 
other 
words, 
the 
firm 
must 
transform 
itself 
into 
a 
cloud 
computing 
company 
rather 
than 
a 
files-­‐ 
storage 
and 
-­‐sharing 
company. 
Attracting 
developers, 
generating 
more 
applications 
internally 
(like 
Carousel) 
and 
acquiring 
specialized 
firms 
will 
help 
to 
transform 
Dropbox 
into 
an 
application 
platform 
with 
the 
broadest 
service 
range 
possible. 
Taking 
over 
companies 
to 
integrate 
them 
in 
the 
Dropbox 
architecture 
is 
particularly 
interesting; 
acquisitions 
of 
start-­‐ups 
in 
several 
domains 
(e.g. 
music, 
video, 
books, 
project 
management) 
will 
allow 
Dropbox 
users 
to 
access 
and 
share 
all 
kinds 
of 
files 
within 
the 
Dropbox 
environment. 
Having 
just 
landed 
$500 
million 
in 
credit 
financing, 
Dropbox 
is 
acquiring 
a 
lot 
of 
Start-­‐up 
such 
as: 
• Zulip: 
corporate 
chat 
tool 
• Loom: 
photo 
sharing 
app 
• Hackpad: 
collaborative 
document 
tool 
• Readmill: 
e-­‐book 
reader 
What 
is 
now 
missing 
to 
increase 
the 
range 
of 
services, 
and 
so 
increase 
the 
productivity 
and 
also 
the 
file 
sharing? 
And 
at 
the 
same 
time 
increase 
the 
conversion 
rate 
from 
free 
to 
premium. 
• Music 
sharing/streaming 
service 
(e.g. 
Soundwave) 
• Video 
sharing/streaming 
service 
• Professional 
inter-­‐firms 
communication 
tools 
• Add-­‐ons 
developed 
for 
Dropbox 
(to-­‐do 
lists, 
document 
scanning) 
• Enable 
data 
adaptability 
for 
new 
devices 
(wearable 
technology), 
like 
Spritz 
GEST-­‐S-­‐484 
Technology 
& 
Strategy 
Group 
4 
– 
Dropbox
As 
the 
global 
internet 
penetration 
continues 
to 
increase, 
hard 
drives 
will 
become 
less 
and 
less 
attractive 
in 
comparison 
to 
cloud 
storage. 
This 
is 
also 
true 
for 
costly 
hardware 
storage 
built-­‐in 
devices, 
like 
computers 
or 
smartphones. 
There 
is 
a 
real 
opportunity 
for 
Dropbox 
to 
take 
advantage 
of 
this 
by 
creating 
strategic 
partnerships 
with 
computers 
or 
smartphone 
vendors 
and 
be 
the 
sole 
provider 
of 
storage 
space 
for 
the 
devices 
sold 
by 
these 
companies. 
While 
partners 
would 
enjoy 
cost 
reductions 
due 
to 
the 
disappearance 
of 
hard 
drive, 
Dropbox 
would 
gain 
access 
to 
their 
customer 
pool. 
Finally, 
customers 
would 
enjoy 
lower 
device 
prices 
and 
more 
storage 
space. 
In 
conclusion, 
we 
see 
Dropbox 
in 
10 
years 
as 
a 
company 
that 
will 
continue 
to 
increase 
the 
worldwide 
productivity 
and 
the 
“shareability” 
of 
all 
sorts 
of 
data, 
from 
all 
possible 
devices. 
This 
will 
be 
done 
by 
integrating 
in 
the 
platform 
an 
extremely 
large 
range 
of 
services 
applied 
to 
various 
domains 
such 
as 
music, 
video, 
gaming, 
that 
are 
still 
missing 
in 
the 
current 
Dropbox 
portfolio. 
GEST-­‐S-­‐484 
Technology 
& 
Strategy 
Group 
4 
– 
Dropbox
Bibliography 
Alexandre 
Scialom 
(Feb. 
2012). 
“Which 
Company 
Will 
Be 
Worth 
More 
In 
The 
End: 
Dropbox 
Or 
Box?”. 
Forbes. 
Retrieved 
from: 
http://www.forbes.com/sites/ 
Appappeal. 
“Dropbox 
usage 
per 
country”. 
Retrieved 
April 
2014 
from: 
http://www.appappeal.com/maps/dropbox 
Christof 
Weinhardt 
& 
al. 
(Oct. 
2009). 
“Cloud 
Computing 
– 
A 
Classification, 
Business 
Models, 
and 
Research 
Directions”. 
Business 
& 
Information 
Systems 
Engineering, 
Vol. 
1, 
391-­‐399. 
The 
Economist 
(Dec. 
2012). 
“Dropbox 
: 
A 
nebulous 
future”. 
Retrieved 
from: 
http://www.economist.com/blogs/ 
Liz 
Gannes 
(Apr. 
2014). 
“As 
It 
Becomes 
an 
App 
Platform, 
Dropbox 
Gobbles 
Up 
More 
Than 
One 
App 
Startup 
Per 
Month”. 
Retrieved 
from: 
www.recode.net/ 
Nur 
Ainaa 
Mohd 
Bakri 
& 
al. 
(2012). 
“PESTLE 
Analysis 
on 
Cloud 
Computing”. 
Retrieved 
from: 
http://www.academia.edu/ 
Rackspace 
Support 
(Oct. 
2012). 
“Understanding 
the 
Cloud 
Computing 
Stack: 
SaaS, 
PaaS, 
Iaas”. 
Retrieved 
from: 
http://www.rackspace.com/knowledge_center/whitepaper/ 
Skytap. 
(Mar. 
2011). 
“Demystifying 
SaaS, 
PaaS, 
and 
IaaS”. 
Retrieved 
from: 
http://www.skytap.com/blog/ 
GEST-­‐S-­‐484 
Technology 
& 
Strategy 
Group 
4 
– 
Dropbox

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Report 2 - What is the future of dropbox?

  • 1. Case report #2 Dropbox Cloud storage services Solvay Brussels School of Economics & Management GEST-S-484 Technology & Strategy Professor Manuel Hensmans Group 4 Andrea Balducci Axel Forrez Gabriel Spinnler Thibaut Van Vracem
  • 2. Dropbox is an American cloud storage and online backup services company founded in 2007 and headquartered in San Francisco. Since the launch of its first product in 2008, Dropbox has experienced a tremendous growth, both in terms of profits and number of users. This second case report focuses on the future of Dropbox and the development of strategic options for the company. Near future Case question 5: perform a TOWS analysis of your organization SWOT analysis Strengths (1) Large consumer base and strong brand; with more than 275 Million users, Dropbox is the leading player in the cloud storage industry. The penetration of Dropbox within businesses is also indirectly very high as many consumers also use this service for work purposes. Dropbox is seen as a ‘hot company’ and has been able to attract a lot of positive ‘earned media’. (2) Innovative start-­‐up company culture; the company follows the ‘simplify your life’ mindset and foster innovation through employee freedom. Furthermore, the users/ employee ratio is extremely high (more than 300.000 users per employee). (3) Ability to raise funds; Dropbox is backed by investors like Sequoia Capital, arguably one of the best tech venture capital firm. With a lot of money recently raised and favorable prospects for the future, Dropbox is certainly able to get funding to fuel its growth. (4) Attractive and quality products; consumers praise the simplicity, rapidity and uniformity across devices of the Dropbox product. Moreover, Dropbox recently announced the future launch of ‘Project Harmony’ which will allow users to work together simultaneously on any document in Microsoft Office applications. On the whole, the ability to develop user-­‐friendly solutions is a real strength. (5) Strategic partnerships and acquisitions; with more than 100.000 compatible applications on its platform and partners as Facebook, Dell and Samsung, Dropbox is able to attract more customers GEST-­‐S-­‐484 Technology & Strategy Group 4 – Dropbox
  • 3. and bring more value to its product. The ability to create and develop strategic partnerships and integrate acquired companies is definitively a strength. (6) Charismatic and visionary leadership; Drew Houston, CEO of the company, created Dropbox initially as a way to solve its own problems. He has a clear vision for the long-­‐term future and under his leadership, the company has experienced an exponential growth. (7) Extremely talented workforce; Dropbox is particularly good at attracting extremely qualified employees. They are literally trying to hire the best in the world for each position (e.g. Python language inventor, Facebook Like button designer and more recently, Condoleezza Rice, who will bring her international relations expertise to the table). Weaknesses (1) Weaker user data security than competitors; as Dropbox is not yet compliant with numerous quality standards like HIPAA, FERPA and SAS70, it is being perceived as having a weak security system in comparison to its main competitors. (2) Late entrance in the B2B segment; the company has from its beginning targeted individuals as well as corporation. This has resulted in a lack of focus on the latter. Together with this lack of focus, it also lacks differentiation, namely because Dropbox is mainly focused on cloud storage while competitors provide more cloud computing services. (3) Lower space offered/ price ratio; in comparison to its competitors Dropbox offer less free space to free users. In addition, the competitors’ prices are also more attractive for premium users. (4) Potential great man dependence; the earlier described strength automatically forms a weakness. As a large part of the company thrives on Houston’s successes, it is possible that without him, the company would have difficulties defining its strategy for the future. (5) Low presence in emerging markets; Dropbox is extremely strong in North America and Europe (with more than 60% of pageviews generated). However, the major emerging markets GEST-­‐S-­‐484 Technology & Strategy Group 4 – Dropbox
  • 4. account for a very small share: 3% of Dropbox’s pageviews in Brazil, 5% in India, 2,5% in Russia and even less in China and Indonesia1. (6) Low premium users/free users conversion rate; Dropbox follows a classical freemium business model. Although the company’s user base is growing faster than Box’, the conversion rate of a user actually paying for the service is only between 3 and 4 % in comparison to Box’ 6 to 8%. Opportunities (1) Trend towards the cloud for businesses; firms are more and more seeking cloud solution to store, share and organize their files. Linked to this, is the growing demand of corporations to access more collaborative tools and content management solutions on the same platforms. (2) Rise of emerging markets in the cloud; analysts predict the emerging markets will outpace cloud storage spendings in more mature regions and in turn drive the worldwide enterprise storage growth in the next few years. (3) Growing global internet penetration; as internet is more and more present (especially in emerging economies), more and more users can access cloud services. (4) Businesses seeking to exploit big data; companies can nowadays collect data much more easily and are looking for ways to analyse and exploit this new goldmine. (5) Governments moving to cloud computing too; public institutions are also eager to benefit from the benefits of the cloud. (6) Consumers increasingly looking for open-­‐source applications; cloud computing could be the next stop for public collaborative software development. Threats (1) Plummeting price of cloud storage; cloud storage is becoming a commodity as the market prices are going down (driven down by the likes of Amazon and Google). Being too focused on cloud storage could lead to a strong erosion of profits in the future. 1 Retrieved April 2014 from: http://www.appappeal.com/maps/dropbox GEST-­‐S-­‐484 Technology & Strategy Group 4 – Dropbox
  • 5. (2) Unfavorable public opinion; there is a risk than consumers start to develop a negative opinion towards Dropbox as the company grows larger, more focused towards businesses and if security scandals continue to arise. Rising privacy concerns have already been affecting other internet giants (e.g. Facebook, Google). (3) Increased global and local competition; Many giant software companies are developing their own global cloud solution (e.g. Google Drive, SkyDrive, iCloud); with their financial resources, reputation and ancillary services, they are a real threat. Moreover, regional competitors are emerging, especially in emerging markets (e.g. True Box in Brazil); they are better positioned to capture local demand in view of privacy issues faced by the global players from the US. (4) Disruption within the cloud storage industry; differentiated competitors may arise and disrupt the industry. One recent example is Transporter, a cloud storage hardware solution, which allows buyers to create their own private cloud server, therefore overcoming the security concern. (5) Government blockades in emerging markets; foreign governments may look unfavourably at US companies hosting national data on their servers. Therefore, there is a risk for US cloud storage companies to be banned from operating on several markets. GEST-­‐S-­‐484 Technology & Strategy Group 4 – Dropbox
  • 6. TOWS analysis Strengths and Opportunities (SO) (A) Leverage the current indirect penetration of Dropbox within businesses to focus efforts on Dropbox for Businesses; with employees using personal accounts at work and a strong product with many business applications (e.g. Project Harmony), all the factors are there to fully take advantage of the rising B2B demand for cloud services. (B) Partner its way in emerging markets; Dropbox can take advantage of the rise of emerging markets by using its strengths AND overcoming its low presence in the emerging market weakness: the company can leverage its ability to partner, strong brand perception and international relations skills to ally with companies in emerging countries. As with Facebook in the West, a strategic partnership with social network sites in emerging countries could increase Dropbox’ local presence. Potential partners would be Sina Weibo, Kaixin001, Qzone and RenRen in China. Partnerships with telecom operators are also an option. The Dropbox’s brand track record in the US and Europe and the product quality will help in the partnering process. (C) Transform users into developers; use as a strength the large consumer base at hand and the simplicity of Drobox’ product to allow users to work on an open source software platform to develop ideas that will add value to Dropbox, thus boosting open innovations. Weaknesses and Opportunities (WO) (A) Provide big data exploitation tools to customers; As Dropbox is already providing data storage and data organization to business customer, providing tools to exploit it could be a next step. This will overcome the lack of differentiation of the company and allow them to continue charging high prices. (B) Target governments and public institutions as customers; this is a risky challenge but if Dropbox is able to provide cloud services to governments, it will send a signal that the company security standards are really high and change CIOs’ opinions, which could lead to a virtuous circle. GEST-­‐S-­‐484 Technology & Strategy Group 4 – Dropbox
  • 7. Strengths and Threats (ST) (A) Focus on cloud computing and content management; in order to overcome the commoditization of cloud storage threat, Dropbox could shift its focus toward collaborative cloud services, the new value pools in the industry. The company can leverage the following strengths: ability to develop user-­‐friendly functionalities, new strategic partnerships (e.g. Akamai Technologies, KIO Networks) and its talented workforce. Moreover, with its large user base, Dropbox can easily reach customers with these new services. (B) Anticipate the potential disruption by acquiring or partnering with disrupters; Transporter can be very attractive for companies looking for more files security and could very well become a dominant design in the B2B segment. Therefore, acquiring such companies and combining their hardware with Dropbox software can be a strategic option. In the same vein, partnering with this company is a possibility too. Dropbox can here take advantage of its ability to partner and raise funds. Moreover, with its clear vision and talented workforce, Dropbox can bring Transporter’s technology to new heights and a larger customer base. (C) Invest in international relations with emerging markets; to overcome potential governmental blockades and face the local competition, Dropbox should invest in international relations (e.g. with C. Rice’s expertise and by hiring new qualified employees). Weaknesses and Threats (WT) (A) Go premium in cloud computing; as cloud storage prices are plummeting, expanding the offer to content management, collaborative applications, big data management and other innovative value-­‐adding applications in the B2B segment could allow the company to maintain its high margins. By doing so, Dropbox can minimize its weaknesses in terms of lack of focus and differentiation and transform its higher prices (compared to competitors) into an advantage. (B) Segment the B2B market and increase focus; the idea here is to segment the B2B market into two categories: (1) firms looking for more security and a more private (for which Transporter could be attractive) and (2) firms looking for a more opened cloud, more collaboration with partners and with lower security requirements. The disruptive threat, the lack of differentiation and the security weaknesses could be avoided by focusing on the latter and by providing more inter-­‐firm collaboration through the cloud. GEST-­‐S-­‐484 Technology & Strategy Group 4 – Dropbox
  • 8. Long-­‐term vision Case question 6: what is your vision for the future? PESTEL Analysis P • Intensifying Government’s control on Internet traffic, privacy issues (e.g.: NSA-­‐PRISM program) • Internal political issues will arise as a barrier to adoption • Different policies across countries (information privacy, security, national network policy and jurisdiction) • Difficulties to address issues such as security, privacy, location and data ownership for policy makers • US-­‐EU Safe Harbour Act and European Union Data Protection Directive: give a close look at the evolution of the relationship between this EU and US. E • Acceleration of the adoption following the economic crisis: cheaper cloud models • From a capital-­‐intensive transaction to an on-­‐going operational expense: pay-­‐per-­‐use model more flexible than old IT model • Quick cloud storage prices drop • Growth of the cloud services market, in both B2B and B2C segments • Emerging markets will lead the demand S • Populations more and more tech savvy: need to access to your data from everywhere, anytime and in all devices. • File sharing is increasingly common (sync ‘n share) • Change in companies’ culture: data stored outside of the company • Confidentiality exigencies from the customers different across countries T • Development of mobile internet: More and more connected devices • A lot of technologies underpin the advent of cloud computing (e.g. virtualization, SOA, Internet, universal high-­‐speed bandwidth) E • More environmentally friendly as outsourcing will help reduce the energy consumption (environmental friendly datacenters) L • Cross-­‐countries differences in terms of companies-­‐ and customers-­‐related information GEST-­‐S-­‐484 Technology & Strategy Group 4 – Dropbox
  • 9. Scenario analysis – Confidentiality/security and commoditization Two variables have been considered: Commodity: All services such as access to Internet, cloud storage, become so cheap that it will be affordable and accessible for all the world population. (E, T, E) Security/Confidentiality: How secure and confidential the cloud storage will be in the future. In other words, how the government and the law will regulate the industry of cloud computing and transfer of data across countries. (e.g. Dropbox putting Condoleezza Rice (NSA surveillance advocate) on its board can shock privacy advocates). (P, S, L) GEST-­‐S-­‐484 Technology & Strategy Group 4 – Dropbox
  • 10. Who is the strategic customer? From B2C to businesses There are different stakeholders in the cloud industry: • Providers • Developers • Users (B2C or B2B) • Prosumers; the future may enable users to become providers and consumers at the same time For now, the profit pools are switching from premium consumers to businesses that buy extra storage space and other features that are not available for free. Indeed, the conversion rate on the consumer side is rather low and as we seen above, businesses are more and more eager to adopt cloud solutions. One of Dropbox’s recent strategies to hit business customers was to give away free storage space to university students for two years, through the Space Race. Two advantage of this strategy: firstly, the students will be “dependent” of this surplus storage and may be willing to pay in order to keep this storage space at the end of the two years. Secondly, university students are often future employees in corporations. This will allow to Dropbox to indirectly penetrate the companies segment and will increase its bargaining power in selling Dropbox for Business. Key customer success factors Since we have identified businesses as the main paying customers, we will focus on the KSF in reaching the B2B segment. (1) High security; CIOs often have high security requirements. That is why gaining their trust is crucial. Therefore, compliance with security standards and the law is key. Moreover, since Dropbox aim to be a global player, the firm will have to manage the different national laws in terms of data protection and availability. (2) Attractive ancillary services and products; Customers need more than simply cloud storage. They need complementary cloud services to create real value for the customer (e.g. enhanced collaboration, easier files access and content management, integration with e-­‐mails). (3) Attractive price; business customers have a lower price sensitivity and different incentives than consumers but the price remain an important decision factor; Dropbox operates in a very competitive landscape. Segmentation can also help to capture more value (e.g. company size, functionalities required). GEST-­‐S-­‐484 Technology & Strategy Group 4 – Dropbox
  • 11. Strategic groups cloud computing Currently, in the cloud computing industry, there three type of services: • SaaS (Software as a Service) • Paas (Platform as a Service) • Iaas (Infrastructure as a Services) Dropbox is currently in the SaaS part, but we forecast that in the long term, it will move slowly to a PaaS model, as Google and Microsoft already did. The three categories differ from each other following two different criteria (the axis variable below): (A) Control; how much of your computing do you trust to other providers, and how much do you keep in house? The higher on the ordinate axis, the bigger the scale of the company. In the bottom you have individuals (end users). (B) Value created; the ability of the Cloud service to justify premium prices. GEST-­‐S-­‐484 Technology & Strategy Group 4 – Dropbox
  • 12. (1) SaaS (Gmail, Google Doc, Box, Dropbox, SAP, Microsoft Office 365) • Easy to use: everything can be managed by vendors • Targeting End-­‐Users (2) PaaS (Amazon, Google app engine, Facebook) • Most complex • Highly scalable • High intractability and effectiveness of large staff (3) IaaS (Amazon EC2, Rackspace, Windows Azure, Google compute engine). • Users maintain complete responsibility for the maintenance of the system Mobility barriers « The barriers from SaaS to PaaS are that their systems are tailored to customer-­‐specific applications and internal infrastructure, limiting PaaS use to small, non-­‐critical applications which require quick, global deployment The barriers to using IaaS services are similar to PaaS, where CIOs struggle with trade-­‐offs between agility and issues of cost, security, and availability »2 The Barrier for Dropbox to move towards the upper-­‐right corner will be: (1) make investment to improve their security and thus convince businesses to adopt Dropbox; (2) create value differently than simply supply cloud storage as it is becoming a commodity. 2 http://ceo2ceos.com/2011/06/what-­‐are-­‐the-­‐barriers-­‐to-­‐moving-­‐to-­‐the-­‐cloud/ GEST-­‐S-­‐484 Technology & Strategy Group 4 – Dropbox
  • 13. Vision statement – How to realize it? Dropbox’s long-­‐term vision is to ‘bury the hard drive’ and be the world’s leading storage provider. Furthermore, their focus will be on centralizing all the world data on the cloud (pictures to share with friends, files to collaborate with you colleagues, music, etc.). The goal is that everyone should be able to access all their files and data through the cloud everywhere, at any time, and be able to share it with everyone quickly and easily. Dropbox also wishes to increase the world productivity by simplifying people’s life and companies’ operations. In order to achieve these long-­‐term goals, Dropbox will have to improve security in order to successfully reach businesses. Buying or partnering with companies specialized in data security and encryption is a way to achieve this objective. Moreover, Dropbox will have to create value by increasing the number of added value services; in other words, the firm must transform itself into a cloud computing company rather than a files-­‐ storage and -­‐sharing company. Attracting developers, generating more applications internally (like Carousel) and acquiring specialized firms will help to transform Dropbox into an application platform with the broadest service range possible. Taking over companies to integrate them in the Dropbox architecture is particularly interesting; acquisitions of start-­‐ups in several domains (e.g. music, video, books, project management) will allow Dropbox users to access and share all kinds of files within the Dropbox environment. Having just landed $500 million in credit financing, Dropbox is acquiring a lot of Start-­‐up such as: • Zulip: corporate chat tool • Loom: photo sharing app • Hackpad: collaborative document tool • Readmill: e-­‐book reader What is now missing to increase the range of services, and so increase the productivity and also the file sharing? And at the same time increase the conversion rate from free to premium. • Music sharing/streaming service (e.g. Soundwave) • Video sharing/streaming service • Professional inter-­‐firms communication tools • Add-­‐ons developed for Dropbox (to-­‐do lists, document scanning) • Enable data adaptability for new devices (wearable technology), like Spritz GEST-­‐S-­‐484 Technology & Strategy Group 4 – Dropbox
  • 14. As the global internet penetration continues to increase, hard drives will become less and less attractive in comparison to cloud storage. This is also true for costly hardware storage built-­‐in devices, like computers or smartphones. There is a real opportunity for Dropbox to take advantage of this by creating strategic partnerships with computers or smartphone vendors and be the sole provider of storage space for the devices sold by these companies. While partners would enjoy cost reductions due to the disappearance of hard drive, Dropbox would gain access to their customer pool. Finally, customers would enjoy lower device prices and more storage space. In conclusion, we see Dropbox in 10 years as a company that will continue to increase the worldwide productivity and the “shareability” of all sorts of data, from all possible devices. This will be done by integrating in the platform an extremely large range of services applied to various domains such as music, video, gaming, that are still missing in the current Dropbox portfolio. GEST-­‐S-­‐484 Technology & Strategy Group 4 – Dropbox
  • 15. Bibliography Alexandre Scialom (Feb. 2012). “Which Company Will Be Worth More In The End: Dropbox Or Box?”. Forbes. Retrieved from: http://www.forbes.com/sites/ Appappeal. “Dropbox usage per country”. Retrieved April 2014 from: http://www.appappeal.com/maps/dropbox Christof Weinhardt & al. (Oct. 2009). “Cloud Computing – A Classification, Business Models, and Research Directions”. Business & Information Systems Engineering, Vol. 1, 391-­‐399. The Economist (Dec. 2012). “Dropbox : A nebulous future”. Retrieved from: http://www.economist.com/blogs/ Liz Gannes (Apr. 2014). “As It Becomes an App Platform, Dropbox Gobbles Up More Than One App Startup Per Month”. Retrieved from: www.recode.net/ Nur Ainaa Mohd Bakri & al. (2012). “PESTLE Analysis on Cloud Computing”. Retrieved from: http://www.academia.edu/ Rackspace Support (Oct. 2012). “Understanding the Cloud Computing Stack: SaaS, PaaS, Iaas”. Retrieved from: http://www.rackspace.com/knowledge_center/whitepaper/ Skytap. (Mar. 2011). “Demystifying SaaS, PaaS, and IaaS”. Retrieved from: http://www.skytap.com/blog/ GEST-­‐S-­‐484 Technology & Strategy Group 4 – Dropbox