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Dropbox targets enterprise customers with new admin controls

Dropbox targets enterprise customers with new admin controls

By Reuters | Updated: 13 February 2013 15:07 IST

The battle between two of Silicon Valley's most richly valued private Internet companies ratcheted up on Tuesday as Dropbox unveiled the first comprehensive upgrade to its cloud-storage product aimed at corporate users.

With the move, the $4 billion-valued Dropbox, which has been a popular sensation in the consumer market, is squarely taking on Box Inc., a similar file-sharing service that has positioned itself in recent years as the option for security-conscious corporate IT departments.

Dropbox's new software allows IT administrators to closely track which users have viewed a file and when it was viewed, and to instantaneously grant or withhold file permissions. The software also allows administrators to rope off certain files so they may be edited but not downloaded or shared in any way - a feature viewed as critical, for instance, in law, medicine or banking.

The new "dashboard" is the first major overhaul since the company introduced its Dropbox for Teams product for businesses 18 months ago, and comes as the company seeks to remake its image into a serious contender in an enterprise file-sharing market estimated by research firm IDC to be worth $20 billion by 2015.

"When we asked our customers what they needed from us to use Dropbox in the enterprise, this is what they said," said Sujay Jaswa, Dropbox's top business executive. "We'll introduce some features, see what our customers are asking for, then keep building."

Although they serve a largely invisible role in personal computing, Dropbox and Box valued at a hefty $1.2 billion itself - have been the subject of intense interest in the Valley as two dueling competitors racing toward potentially high-profile public market debuts.

The pair have pursued different market segments until now.

Founded in 2007 by Drew Houston, 29, and Arash Ferdowsi, 27, two Massachusetts Institute of Technology graduates, Dropbox rapidly accumulated 100 million users by touting its ease-of-use and polished interface that syncs files across multiple devices and operating systems. Box, by comparisons, just said this month it passed the 15 million user mark, but it has devoted considerable resources selling its product to C-level decision-makers, including those in European companies.

For Dropbox, this week's update "is the first step in the direction for us to open up a much bigger market," said Anand Submarani, the Dropbox for Teams product manager.

Dropbox's last two high-level hires have been sales executives from Apple Inc and Salesforce.com Inc., said Jaswa, adding that the Dropbox for Teams division is one of the company's highest priorities.

The expansion in Dropbox's enterprise business comes at a time of enormous pressure for the 250-person company to justify its $4 billion valuation after it raised $250 million in venture capital financing in 2011. The vast majority of Dropbox users do not pay for the consumer service, but it charges $800 a year for a five-person Teams account, and more for larger teams or more storage space.

The company's enterprise bona fides took a public relations hit last July when it suffered a security lapse.

Meanwhile, Box's young and outspoken CEO, Aaron Levie, 28, has not shied from touting his IPO ambitions and leveling thinly veiled barbs against Dropbox, saying publicly that Facebook Inc's sobering IPO experience last year proved that enterprise companies had more stable business models. Levie said in a January interview that Box was on track for a 2014 IPO.

But one of Dropbox's earliest investors, Bryan Schreier, a partner at top-tier venture capital firm Sequoia Capital, argued that Dropbox made the right call by establishing a mass-market foothold that can then be parlayed into business customers.

"Five years ago, we started in a place that was laser-focused on consumer," said Schreier, who spotted Dropbox's potential in 2007 and invested before it had launched publicly. "That has proven to be the right move, because by focusing on usability, we've been driving adoption across 2 million businesses too."

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