Dropbox: We'll conquer the enterprise by focusing on our 200 million users first

Credit: PC World Australia

We've argued before that for Dropbox to justify its latest venture capital infusion and $10 billion valuation, it's going to have to get more serious about the enterprise.

The reason is simple: Consumers have proven unwilling to pay enough to cover the costs of running a massive scale online service. Yes, they'll look at advertisements, which is how companies like Google and Facebook thrive. Yes, they'll use the Internet as a new consumption channel, like buying music on iTunes, TV shows on Netflix, or everything in the world on Amazon. But when it comes to paying for the actual service itself? Forget it.

Enterprises are different. A business will pay for technology that helps it increase revenue or cut expenses. That's why enterprise software and services companies like Microsoft, Oracle, SAP, and others have a combined market valuation over $1 trillion.

So how does Dropbox get into this august club? Last summer, the company hired Ross Piper from Salesforce as its executive VP of enterprise strategy help figure it out. But Piper says the company won't suddenly be pivoting to place CIOs or IT executives first. Rather, Dropbox will continue to design for users first, then developers. Then IT. In that order.

"Contrary to some other companies, we believe that order is natural," Piper told me. "You have to solve for users first. The fundamental value of the platform is making people more productive, so people should be the priority in building a great service. Then extending it to other apps with capabilities critical for developers," which was the company's goal with the release of new APIs at its DBX developers' conference last year.

"Once you've built that rich experience and ecosystem, then you can think about giving IT means to have management, visibility, and control to mitigate risk to companies," said Piper. "That's really critical as well. But if you don't have users and developers, giving them control over something not nearly as rich, you won't have the same adoption inside companies."

I countered that every enterprise company today is making the same pitch -- we hear it all the time. How does Dropbox convince IT buyers to choose it over a product like Box, which claims to be equally concerned about user experience, but also has been catering more closely to CIOs and IT administrators for half a dozen years now.

"I think a lot of traditional enterprise vendors pay lip service to end users," said Piper (although he didn't call out Box or any other company by name). "The bar of consumer experience for users is higher than in the enterprise. We have the ability to have that bar known through 200 million users, 1 billion files a day.... As we layer on more and more IT controls, we can do that knowing what the bar is for user experience, which we can't ruin." He continued, "It is possible to bring the two worlds together, but you have to have that large adoption experience first to set the bar, in order to know what not to mess up."

On this front, Piper sounds a lot like Evernote CEO Phil Libin, who says that most software designed for businesses first is "crappy."

Although Dropbox had no comment on the reports of its latest funding round or valuation, Piper did tell me that the company is staffing up its direct enterprise sales force whose primary goal is to talk to IT executives -- not so much to add a checklist of IT-specific features, but to make sure that Dropbox is prioritizing the user experience around what's important to IT. For instance, the company's move to let users separate personal and company data within the same Dropbox interface was a user experience change first, but also matched the goals of IT, who didn't want users to commingle work info in personal Dropbox accounts.

Piper also hinted that the acquisition of Mailbox -- a mobile email app -- showed Dropbox's ambitions to be about much more than file storage and collaboration. "We want to make Dropbox best place for people to get work done." Full stop.

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