While Dropbox has been hesitant to drop its prices, pressure from Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOGL) has forced the hand of the cloud storage pioneers.
In March. Google fired a shot over the bow of Dropbox when it drastically reduced the cost of its Drive storage from $50 to $10 a month for 1 terabyte. That same $10 used to get you 100 gigabytes with Dropbox Pro while $50 a month would give you 500 gigabytes. Following today’s announcement, Dropbox Pro will now cost the same as Google’s Drive, $10 for a terabyte of storage.
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“We pioneered the space and now our competitors have realized it’s important and have started to focus on it,” Chief Operating Officer Dennis Woodside said in an interview this week.
Dropbox remaining the best in the business
Dropbox has long prided itself in flawless synching across all devices including smartphones, desktops, laptops and tablets and believes the giants are trying to force their devices on users with their cloud storage.
“I am confident in our business model and in the opportunity ahead of us,” Woodside said.
300 million users presently use Dropbox and as an oft talked about startup they seemed primed for an exciting IPO just months ago prior to finding themselves in the cross hairs of large tech firms seemingly hellbent on destroying the company and others. Aaron Levie, CEO of competitor Box, thinks that big tech is dead set on making online storage “free and infinite” simply because they can.
Around 70% of Dropbox’s customers are not in the United States and while Dropbox is looking to international expansion and a strengthening of its business sales team, they are spending just as much time on trying to make people understand that they are the best online storage alternative.
In addition to the announced price slashing today, Dropbox added a number of features requested by its customers. These include: passwords for shared links, view-only permission for shared folders, shared links that expire at a time determined by the user and the ability to wipe a lost or stolen device.
Analyst sees positives
Ted Schadler an analyst at Forrester Research still sees positives for Dropbox in the future.
“Dropbox has 300 million users and these are not casual users. They are deeply embedded in the service,” Schadler said. “People say you can just move your stuff out of Dropbox and drag and drop it somewhere else. I don’t think that’s true. I think Dropbox has momentum. Dropbox has first mover advantage and it has executed on that really well.”
“When you have loyal users, you have a lot of room to experiment on ways to make money,” Schadler said.
They will certainly need to embrace this loyalty if the hundreds of millions of dollars put forward by venture capitalists is ever to be repaid through a public offering.