Musing about iCloud, the forthcoming SkyDrive integration into Windows 8, and Google Drive got me thinking about DropBox, the company whose business model is built on charging when everyone else is starting to give large amounts of storage away for free. DropBox killer feature is their sync replication. It just works, and consumers have shown they love the simplicity of it. However Apple have replicated the simplicity of the sync, albeit only for iOS users, and Microsoft are now close to the same with Live Mesh.
DropBox store the files you give them on Amazon S3. This surprises many people who had assumed that they are stored on DropBox Servers. This means that the entire DropBox business model is beholden to Amazon Web Services. Amazing when you think about it, and highly illustrative that what DropBox really brings to the table is great software with a killer feature, but what is going to happen when every one else has that killer feature, with 10x to 20x more storage for free?
A recent article had DropBox valued at 4 billion dollars . This is a valuation on a company doing revenues between 100-200 million dollars per year in which investors have poured in 257 million dollars in funding. Perhaps it’s me, but I just don’t see it. Yes, they have a gazillion subscribers but so what? In a commodised industry that struggles to convert more than 2% of the user base, why should that get me excited? But there is DropBox Teams for businesses right? Ever used it? Then try it and you won’t need me to draw a conclusion.
So what for DropBox if there is no mega IPO coming along? They turned down Mr Jobs (a mistake), so who else would be interested? What about Amazon? After all DropBox really is the ultimate sync client for Amazon S3. With Amazon now looking twards private cloud it would same a match made in heaven. As with all good things, time will tell……