Beate Gaitzsch, 19 March 2017

Dropbox – a leading file-sharing platform battling for users

dropbox-is-a-leading-file-sharing-platform

In a world that is becoming more connected every day, companies are working ever more connected, with teams from all over the world. For them to be able to work efficiently and exchange their knowledge, files need to be shared frequently. This is facilitated by so called file-sharing services, which provide a storage space online for everybody to use according to their needs. One of these providers is Dropbox, which is currently supporting 500 million people and 59,000 businesses worldwide on their way to an interconnected workplace.

To understand Dropbox and its importance today, it is essential to have a look at the background of this innovation. In 2007 two students, Drew Houston and Arash Ferdowsi, founded Dropbox Inc. as a way to work simultaneously on files from different locations, without having to send them back and forth via email every time. For the stored files they used the cloud storage offered by Amazon, which enabled them to store files on Amazon’s servers, rather than having to build hardware themselves. However, there was an even earlier model of a file-sharing service that is often forgotten. Two years prior, Aaron Levie and Dylan Smith founded Box, one of the first services available online for free. By 2017, Box had reached 41 million users and 59,000 businesses.

Dropbox as an innovation and its place in the technology cycle

While it is clear that Box was the first mover in this field of cloud computing, many others have joined up until today. According to the technology cycle established by Anderson and Tushman, Box was the innovation that started the ‘era of ferment’ for file-sharing services. In this phase of the technology cycle different products evolve, which are acting as substitutes to the first innovation. Well-known cloud services here are e.g. Dropbox, but also iCloud, Google Drive and OneDrive. As of today there is still no ‘dominant design’ found which is established as the best on the market. There are many different services existing, which use a similar foundation technology to operate. Like the characteristic for the technology cycle, the first mover does not win the majority of the market share. This can also be seen by the example of Box and Dropbox and their aforementioned number of users.

Dropbox is however an important innovation and can be described in different dimensions. Firstly, it was a product innovation in contrast to a process innovation since a completely new service was created. Secondly, Dropbox was an incremental innovation, based on the general system that file-sharing services use. This leads to the third aspect of Dropbox as an innovation; the fact that it was competence-enhancing, due to it building ‘on know-how embodied in the technology that it replace[d]’. Moreover, it can be described as both an architectural and a component innovation. The product Dropbox has a unique design as well as additional services which vary from Box. Furthermore, it was a result of a demand-pull, as students had the idea to develop a new service for solving their problem of collaborating on files.

Can Dropbox defend its leading role?

As mentioned above, files were stored at first with the help of the Amazon cloud. However, since 2015 Dropbox has started to develop their own hardware and build a network only for them to become more independent and be able to assemble servers fitting the needs of the company. This also helps the businesses which are using Dropbox, as they themselves do not have to own dedicated hardware, which is complicated due to high development and production costs. The company is developing many new services to stay competitive. The latest addition was Dropbox Business, which shall help companies to store files and work together even more effectively, while having advanced security features and a live support service. Other newly introduced services include Dropbox Paper, a creative collaboration tool and Smart Sync, which lets users decide which files only to keep online to prevent crowding their desktop.

While these new products are offering a good variety for users, competitor Box is not far behind. Both companies are trying to win businesses for their service, which is quite hard, as the services are very similar. Only time will tell if one company can position itself as the market leader or if today’s variety of services will remain.

Beate Gaitzsch

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