Competition heats up between Dropbox & Box

Competition heats up between Dropbox, Box

April 14, 2014 | By 

Last week, Dropbox introduced a number of updates, some designed to appeal to users and others to IT, but to me it was another step in the continuing and growing competition between two start-ups: Dropbox and Box.

Let’s start by looking at the business side of Dropbox.

Dropbox announced updates to the administrative back end in its continuing attempt to make the company more attractive to IT pros who want some control over Dropbox implementations. Dropbox makes it easy to share files between devices, so it’s natural to assume that people are using it inside organizations with little administrative control–a situation that has come to be known as “The Dropbox problem.”

As Matt Weinberger pointed on out on CITEworld (a publication where I’m a contributor), Dropbox is clearly trying to take advantage of its consumer popularity, while at the same time providing a nice wrapper for IT to gain some control over “The Dropbox problem.” But Weinberger sees an issue with Dropbox’s approach:

“But the critical problem here is that Dropbox owns this entire ecosystem. While plenty of third-party apps integrate with Dropbox for cloud storage, these are mainly consumer apps (with Salesforce1 a notable exception), and it just doesn’t offer developers the more robust API of competitors like Box. It’s simply not a great platform for enterprises to build their own tools on top of the platform, which limits its ability to appeal to customers in specific verticals and larger enterprises alike,” he wrote in his CITEworld piece.

In spite of this criticism, Dropbox is not wrong to try this approach because clearly consumers have a growing power inside the organization in the age of BYOD and they are using Dropbox with or without IT’s knowledge. It makes sense to give IT some semblance of control.

Meanwhile, Box continues its march towards its IPO, but R Ray Wang, founder and analyst at Constellation Research, thinks Box could have the opposite problem. That’s because over the last several years Box has poured its resources into making an enterprise-friendly product and that includes a robust set of APIs to allow companies to build that set of enterprise applications that Weinberger talked about in his piece. They have built up their security and administrative side too.

What is the problem then you ask? This isn’t just a game about pleasing IT. You have to please users too because they are the growing forefront of software selection inside the organization. They have to like it too–and Wang believes the real battle will be fought in the prosumer market, where Wang says Dropbox could have the upper hand–at least for now.

“Dropbox has an advantage of going consumer first, so getting to prosumer will be easier than Box going to prosumer from enterprise.” And Wang thinks this middle prosumer ground between the enterprise back end and the consumer is where the ultimate battle could be fought over the next 24 to 36 months.

Content management industry veteran Laurence Hart, until recently of Alfresco,breaks down the competition in his Word of Pie blog this week. As he points out, Microsoft cannot be easily dismissed in this space, but clearly these two companies–born in the cloud and with a big head start–are the startups to beat at this point. But as Hart points out, Microsoft has some fairly substantial enterprise chops and if it can execute, it could be a big player too.

Wang agrees.

What we have then is a hotly contested race for the hearts and minds of online storage, collaboration and sync and share. When you get a big race, it’s a given that consumers, whether enterprise, prosumer or individual, win, because it forces the various players to innovate and costs generally come down too.

If Microsoft finds a way to break through, I will go on record as saying a Box-Dropbox combination could be a formidable foe and I could see these two companies combining at some point to battle Microsoft for control of the sync and share space. (It’s worth noting that this is nothing but pure speculation on my part.)

For now though, we can watch while these three companies battle it out for the future of content management–and it’s a battle that should be fun to watch, no matter who you’re rooting for. – Ron

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