Dropbox weathered Steve Jobs' anger and his desire to kill it but it now has a tougher challenge on cards: getting myriad businesses and corporations across the world, including India, to sign up for its service. The cloud storage startup has made headway among consumers, restless internet surfers and download addicts but is only now starting to woo corporations, big and small.
It has tied up with Salesforce.com and Dell to penetrate the business market and has seen strong growth in the space. Dropbox also plans to expand in India in the next two or three years.
"A lot of companies have a strong engineering presence in India; Google certainly does, and it would make sense to put things like user operation centres here.
We don't have a specific timeline for it, but I would be surprised if we didn't have something here," Sujay Jaswa, business development head at Dropbox, told ET. Jaswa added that the company had just begun its international expansion last year and was going to open its first Asia-Pacific office in the first quarter of 2014.
Started by two MIT graduates, Drew Houston and Arash Ferdowsi, Dropbox was named the fifth most valuable tech startup after Facebook, Twitter, Zynga and Groupon by US tech blog Business Insider. The San Francisco-based startup, which counts U2 musicians Bono and The Edge as investors, has about 200 million users globally and is reportedly seeking to raise $250 million, according to media reports. The latest round is expected to value the company at $8 billion, about $1.5 billion for every year of its existence.
Jaswa, who asked the founders for a job while carpooling to a concert in Silicon Valley, is the first non-MIT hire at the firm.
Dropbox offers storage on the cloud and then syncs that account to various devices. Storage up to 2 GB is free and more than that has to be paid for a common 'freemium' model among start-ups. While there are other cloud storage companies, Dropbox's early-mover advantage among consumers and the fact that it allows users to boost storage by inviting friends to the service gives it an edge.
"If you look at paying clients, it's quite huge. I would say we are quite comparable to many publicly-listed software-as-a-service companies," Jaswa said. Dropbox's growth, and heady valuation, comes at a time when it is up against deep-pocketed players like Google, Microsoft and Apple in the cloud storage space something industry experts attribute to the fundamental change the company is helping drive in personal computing — where files can be accessed wherever and whenever, regardless of the operating system.
Companies to use Dropbox include venture firm Accel Partners, location tagging start-up Foursquare, education site Khan Academy and travel site Kayak. "Prior to Dropbox, we put all event files onto flash drives — and usually two people carried them.
Now, all we need is Dropbox for Business," Dixon Chan, IT Director, Accel, said in a case study on the firm's use of Dropbox. The company has come a long way since Steve Jobs vowed to kill it in 2011. Apple had tried to acquire Dropbox and when Jobs couldn't buy out the company, he said it would come after its business, Dropbox CEO Drew Houston said in a Salesforce.com conference in November.
Six months after that meeting with Jobs, Apple launched iCloud — its cloud storage platform — and in his penultimate keynote Jobs said the product was geared at taking out Dropbox. "It was a tough day. I'll never forget that day. I'd just walked in and Drew called me over to his computer and we're watching it (the keynote) and it was intimidating because Steve Jobs was the most iconic business person of our generation.
So, we were both like, 'this is going to be tough'. But our success validates our technology." Jaswa said.
Now, far from death, Dropbox has mutual fund investors like Fidelity on board, according to a Reuters report citing data from Morningstar, giving the funds a headstart when the company goes public. Other funds with stakes in Dropbox include funds owned by Morgan Stanley and T Rowe Price. Venture fund Sequoia and hedge fund Valiant Capital also own stakes in the company.
"Their growth has been exponential even with competition and they have executed really well. They are the classic case for being able to attract new users by allowing people to invite friends. It's viral and it's simple," Mukund Mohan, CEO-in-residence of the Microsoft Accelerator and a Dropbox user, told ET.
Tech forecasting firm Gartner predicted last year that the personal cloud would replace the personal computer as the center of users' digital lives by 2014. "Major trends in client computing have shifted the market away from a focus on personal computers to a broader device perspective that includes smartphones, tablets and other consumer devices," said Steve Kleynhans, research vice-president at Gartner.
"Emerging cloud services will become the glue that connects the web of devices that users choose to access during the different aspects of their daily life."
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