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Dropbox: disruptor or flash-in-the-pan?

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After Dropbox made it easier to move digital photos from smartphones to the cloud on Friday, the debate as to whether Dropbox itself is the next big disruptor or just a feature to be acquired or co-opted flared anew. The debate boils down to whether the web needs a neutral storage service that works pretty well with all the major technology platforms or if ease of use and synching is paramount.

By all accounts, Dropbox provides a slick way to upload and store digital paraphernalia in the cloud. From there, users can access their stuff from any device and sync files across devices. The service has been hugely popular: As of four months ago, Dropbox claimed more than 45 million users. But the success of the five-year-old company has bred imitators and competitors, including the biggest companies in tech.

The new private camera upload feature will let users take their photos as always but then easily move them from smartphone, tablet, camera or SD card to their cloud data trove using Wi-Fi or their cellular data plans. Dropbox uploads the photos and videos in their original size and full resolution to the user’s camera upload location. The feature is available now for Android (s goog) phones with Windows,(s msft) Mac (s aapl) and iOS support to come, Dropbox said.

Hardware makers hedge with Dropbox

This is one example of how Dropbox is trying to stay ahead of the curve and make itself an indispensable tool for connected consumers. In that, it has some formidable partners. Just this weekend at the Mobile World Congress, HTC said buyers of its new HTC One phones will get 25 gigabytes of Dropbox storage free for two years. Handset makers like HTC see Dropbox alliances as a way to combat Apple’s iCloud initiative.

Dropbox’s popularity has certainly been noted. Companies from Microsoft(s msft) to Apple and (probably) Google(s goog) are trying to mimic its capabilities. “Everyone wants to be Dropbox,” Andres Rodriguez, the CEO of storage specialist Nasuni, told me recently. Steve Jobs, the late CEO of Apple, reportedly wanted to buy the company. When that didn’t work out, Jobs called Dropbox “a feature, not a company”  and launched iCloud.

That “feature versus company” meme has dogged Dropbox ever since and cropped up again this weekend when PandoDaily’s Farhad Manjoo weighed in on Jobs’ side of the debate:

Dropbox is a great little file-syncing app, and founder Drew Houston and crew are already making some nice money out of it. But is it a $40 billion company? I doubt it. And when I hear folks like Benchmark’s Bill Gurley suggesting that it might be, and calling Dropbox “a major disruption,” I wonder if they’ve simply been blinded by the thrill of using an obviously well-crafted utility.

Dropbox is slick, and it supports nearly all the relevant clients. But in Manjoo’s experience, that support is uneven. Dropbox is often flummoxed by OS- and application-level problems, he wrote.

But any neutral party without access to Apple’s native hardware hooks will be somewhat stymied. Plus, that only takes into account some of Dropbox’s value, argues Posterous co-founder and venture capitalist Garry Tan. On his blog, Tan writes that the tech giants (Google, Apple, Microsoft) that make their own OSes and applications have no incentive to make them sync well with others.

What are the odds of Apple getting their sync client right for PC’s? Just about zero, considering what they’ve done in the past with MobileMe sync.

Same goes for Microsoft writing sync software for the Apple platform. Arguably Google is in the best shape to provide a seamless multiplatform experience . . . well, except for iOS! The odds of a viable multi-platform option emerging from one of these big three seem slim to me.

Those who forget history . . .

The cautionary tale for Dropbox is that the best technology doesn’t always win. (I would insert the Betamax vs. VHS argument here, but no one remembers it anymore.) Should Microsoft, Apple or Google offer at least reasonably good cross-platform file storage and sync capabilities, Dropbox will be in trouble. Working in Dropbox’s favor is that CEO Drew Houston appears acutely aware of history.

According to this Forbes magazine account, when Apple announced iCloud, Houston shot off a memo to employees, reaffirming the company’s status as one of the fastest-growing companies in the world. Then he listed several other once-fast-growing companies: MySpace, Netscape, Palm and Yahoo.

Photo courtesy of Dropbox

15 Responses to “Dropbox: disruptor or flash-in-the-pan?”

  1. Walter Riker

    I like Dropbox over the rest. 1) I don’t have to sync, Dropbox automatically does this, and 2) Dropbox puts a folder on my computer, smartphone, and tablet. I can work on a file off line and when I go back online it sync’s for me. It is easy to use and I doubt that the rest will be that easy. iCloud is out – I am not an Apple player in most cases and everything else I have to either sync or re-upload.

  2. Tomer Saar

    Dropbox is not Facebook or Twitter, where you’ve got all your friends together and cannot leave while they are there. Even when I’m sharing files on Dropbox people can get them without being registered.
    As an outcome, Dropbox has a very small entry barrier for competitors and people can leave it without worrying to loose anything.
    Therefore, it might not be sustainable after the hype is gone, and should consider a possible exit now. If not to Apple maybe to someone else.

  3. Dain Binder

    To me Dropbox is neither, it is an established company. The primary service provides value and their open platform is a solution for many other companies and startups to offer cloud based saving and sharing. They are not a $40 billion company and should stop taking new capital. It is time to settle down and make a profitable self-contained long-term business out of it.

  4. Microsoft makes a surprisingly good cross-platform sync product, Live Mesh. I prefer it to DropBox as I can sync without requiring I use their storage, in other words peer to peer, with no limit. In addition, you get 5GB of SkyDrive capacity.

  5. iCloud is not a competitor to Dropbox. iCloud supports the Mac/iOS ecosystem. Dropbox supports all platforms.

    Ir works every well. I don’t know where this guy is running into problems. I have been using it since beta and it is the last thing I would give up on my PC.

    I wouldn’t move my stuff to Microsoft or Google.

    Dropbox does one thing and they have to be the best to survive. My money is with them.

    • I love DropBox, but if you had upgraded iPhoto on a Mac recently, the change in symlinks in the photo directory totally confused DropBox- it wanted to make 2 copies of everything and maxed out my account and some of my family’s laptops’ drives! It was an easy enough fix (remove the legacy symlinks), but it was definitely a hiccup. That said, I love Dropbox- no touch, pan-OS sync and backup is a very good thing, and DropBox generally works quite well.

  6. First rule of thumb. If VC’s start hyping is most likely not worth it[1].

    Some think the sum of its features make up a product, some think a product is more than the sum of its features. [Google, Apple]. Or the march to file-less system[2].

    I have been the ghost writer behind questions Drew was asked during an Interview, not impressed with his grasp what’s going on in the industry and why. In short I was missing, it’s not about a heap of files with access from anywhere dumped into categories, it’s about organizing data in context with access from anywhere [and hopefully anything].


    • Barbara Smith

      you can get more than 2GB. There are ways to get extra storage including adding friends, doing the tutorial and paying for it. I have paid for dropbox and it is worth it. The extra features of a paid acct are worth it.

      I should note for the article that the ways other services are using dropbox is making dropbox increasingly useful. For example, dropboxautomator by wappwolf is excellent, and is excellent. These services in addition to the iphone/android apps that use dropbox really make it a great service and the bedrock for future functionality.

    • I have 100GB of DropBox storage. All my family’s photos, forever (at least, 2002-). Given the amount of times it saves me vs. other methods of backup/sync, it’s easily worth $20/month

  7. Marin Perez

    Good take on it and I think Dropbox can be successful in this space because it’s not worrying about its other businesses. Of course, the other side of that is that it has everything riding on this.

    Also, there’s a typo in the fourth graph – ” HTC said said”

  8. What are the chances that Google, Apple and Microsoft come with an interoperable cloud storage solution? Dropbox might have competition from the OS guys, but the OS guys sure hate each other more than they hate Dropbox (at least for now).