Dropbox Hits a Huge Milestone
You can’t go through your day without someone mentioning the cloud or being alerted by a phone notification asking you to backup your information, music, or photos to the cloud.
Cloud storage is convenient. It gives you unlimited access to your files on multiple devices, while providing storage space that frees up your phone or laptop's memory.
I remember when I first discovered the cloud. I was in college, and my professor introduced me to the site Dropbox. He wanted my class to use it for turning in our papers throughout the semester.
He was tired of email attachments that were “undeliverable” and even more tired of having the responsibility of keeping track of multiple flash drives from students.
It then became a place where I could upload my college essays and access them whenever, wherever I was. I no longer worried about working on the wrong document because the most up-to-date file was uploaded to Dropbox.
It soon became somewhere I uploaded photos to share with my friends and a place where I knew my photos would be safe. I was no longer afraid of losing all my favorite digital memories if my laptop decided to crash.
And now, it's become a useful tool that allows my coworkers and me to seamlessly work together.
The cloud is amazing.
The Future of Cloud Storage
Cloud storage is huge component of our daily lives... in our homes, jobs, and in the palms of our hands.
When Dropbox was founded in 2007, it was one of the first cloud storage companies to emerge. By 2011, it had more than 50 million registered users, which then increased to 400 million in June 2015. Now it has 500 million users along with 200,000 business customers.
Dropbox caught on fast, and its simple, easy-to-use interface made it ideal for personal use and for businesses. Dropbox uses a freemium business model, which means users are offered a free account with a limited storage size and have the opportunity to upgrade to receive additional features and more storage.
This month, Dropbox surpassed $1 billion in annualized revenue.
And cloud storage hasn’t even hit its peak — it still has a lot of growth ahead in the next decade...
By 2021, the cloud storage market is estimated to grow to $74.94 billion compared to $23.76 billion in 2016. That’s a CAGR of 28% in as little as five years.
This milestone of a billion dollars brings up one reoccurring question for investors... when will Dropbox become a publicly traded company?
Dropbox co-founder and CEO Drew Houston says they're not in a rush to go public. They’re in a flexible position that allows them to hold off on going public until the right moment.
Meanwhile, they've managed to raise more than $600 million from venture capitalists and private investors, which does raise a few eyebrows with IPO advisors, giving them more reason to think a 2017 IPO is possible.
A Solid Business Strategy
Dropbox continues to focus on building and improving its business strategy, so it's just launched two new features: Dropbox Paper and Dropbox Smart Sync.
Dropbox Paper targets business users. It gives them the ability to create, review, and organize content within a single workspace. Not only that, but this feature will also bring out some much-needed competition between Dropbox and Google Drive, or at the very least it will give users more than just one option when it comes to a workspace platform.
Dropbox Smart Sync will solidify a user’s files across services and increase their cloud searchability.
Bryan Schreier, a venture investor for Sequoia Capital who led the firm into a Dropbox investment, said, “This is the fastest growing software-as-a-service (SaaS) company we have ever worked with.”
Creating new features will expand the business into more than just a cloud storage platform and help it live up to the $10 billion valuation that was earned during the last round of private financing.
Drew Houston had this to say during the launch of these added features:
We’re reinventing sync, bringing a modern collaboration experience to all your files, and launching Paper, a new way to work together that goes beyond the document. And we’re building this all on top of a strong business foundation—we’ve reached $1 billion in revenue run rate faster than any other SaaS company in history.
Evolving into more than just a place for users to store files is the mindset Dropbox needs to be in. If it wants to survive in an already competitive market, it will need to be influential with its products and features and focus on building a collaborative workspace that businesses can easily use and trust. If it was able to break into the cloud storage market 10 years ago, then it has enough strength to survive today.
Until next time,
Pro Trader Today