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Dropbox Caught Between Warring Giants Amazon and Google
An anonymous reader writes: Google and Amazon are both aggressively pursuing the cloud storage market, constantly increasing available storage space and constantly dropping prices. On its face, this looks great for the consumer — competition is a wonderful thing. Unfortunately, many smaller companies like Box, Dropbox, and Hightail simply aren't able to run their services at a loss like the giants can. Dropbox's Aaron Levie said, "These guys will drive prices to zero. You do not want to wait for Google or Amazon to keep cutting prices on you. 'Free' is not a business model."
The result is that the smaller companies are pivoting to win market share, relying on specific submarkets or stronger feature sets rather than available space or price. "Box is trying to cater to special data storage needs, like digital versions of X-rays for health care companies and other tasks specific to different kinds of customers. Hightail is trying to do something similar for customers like law firms. And Dropbox? It is trying to make sure that its consumer-minded service stays easier to use than what the big guys provide." It's going to be tough for them to hold out, and even tougher for new storage startups to break in. But that might be the only thing keeping us from choosing between the Wal-Mart-A and Wal-Mart-B of online storage.
The result is that the smaller companies are pivoting to win market share, relying on specific submarkets or stronger feature sets rather than available space or price. "Box is trying to cater to special data storage needs, like digital versions of X-rays for health care companies and other tasks specific to different kinds of customers. Hightail is trying to do something similar for customers like law firms. And Dropbox? It is trying to make sure that its consumer-minded service stays easier to use than what the big guys provide." It's going to be tough for them to hold out, and even tougher for new storage startups to break in. But that might be the only thing keeping us from choosing between the Wal-Mart-A and Wal-Mart-B of online storage.
Amazon have never chased the consumer business, they don't want that. Their focus is fixed on supplying IT services which companies can then build their solutions on. Dropbox is powered by AWS, they are the wholesale provider.
Amazon reducing their prices should only be a good thing for them as that will reduce the operating costs of Dropbox.
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Unlike Google which uses ownership to determine size used, you can run out of space in DropBox by someone sharing you a large folder. DropBox also make is impossible from the web interface to see the sizes or usage of files to make room or clean up. I ended up paying Google for 100gb because their service is simply better.
It's one thing to blame Amazon and Google for a price war. But DropBox's pricing scheme was always overpriced. (And the same goes for Evernote -- even though theirs is a slightly different offering). What should cost a couple bucks a month is priced multiples higher.
Besides, DropBox has entertained MULTIPLE exit opportunities and rejected them all.
If they disappear now, they will have only themselves to blame for not choosing any one of the multiple exits that were on the table.
The landscape changed rapidly around the early leaders. And yet, those leaders did not change their models rapidly to match the changing landscape. Knowing when to quit, and how best to exit are essential parts of management. While we may applaud unbounded grit and unshakeable tenacity -- those qualities in a CEO are more frequently disastrous than beneficial.
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What happened to all the penguins---are they no longer on Slashdot anymore? How about these reasons to like Dropbox over MS, Google, and the others:
- Linux client
- Follows symlinks
- Automatic infinite version history (for a fee)
- LAN syncing for faster speed
- Bandwidth controls
- Automatic full resolution photo uploading from mobile
- Sync that just works
It's not all about the price ya know. Some of us like quality too. I currently have 24GB of free storage through Dropbox which I got through a special promotion. It has always worked flawlessly and never let me down.
This is incorrect. The only reason it seems this way is because it takes so long to gather evidence, and the ensuing court cases take so long to eventuate.
Anti-competive practice may be as simple as lowering your price below cost (using any type of funding) for the purpose of driving out competition. Once that competition is gone, you can then raise your prices back to normal (or higher), and have a larger slice of the pie.
The above act itself is subject to anti-trust laws, and not just the fact that prices may have been raised to a higher value after the fact.
Take a look at the Microsoft anti-trust suits. They were not purely about the consumer, as Microsoft was all about expanding market share to boost profit, rather than increasing prices. It was about leveraging one market segment to gain market share in another at the expense of the competition.
I am not artistic in any way. So I may be biased here.
The problem is expecting to get paid every time someone wants to hear the recording you made 3 months ago (or three years ago, or thirty years ago). I understand it is a means to produce more content, but rarely actually happens.
The waitress at the last restaraunt you ate at has to keep doing the same thing (with minor adjustments) over and over again to keep making a wage. I highly doubt she has delusions of serving one table and making a living for the rest of her "career".
I have a brother who enjoys making music. He subs in his friends bands from time to time because he enjoys playing. During the day he works a normal job, has no ambitions or delusions of "making it" and playing an instrument as a career.
I'll be blunt here: if your music really is as fantastic as you think, you'd already be sleeping on a bed made of money. Maybe you should go and reflect on that.
It's nice that all these huge companies are so interested in control of everyone's data.
Just encrypt your files before you put them in your shared folder. Or just set the folder to automatically encrypt. There are dozens of "how to" webpages that explain how to do this with DropBox and TrueCrypt, and it isn't hard to do it with other services.
No, it's not. This goes by many names, e.g. the freebie model, the razor and blade model, etc. It is actually infinitely sustainable. It's also very much not anti-competitive.
Google (and I'm wagering Microsoft and Amazon are similar) makes their money on advertising. They get that by attracting more users. They get and keep these users by building a complete ecosystem, and make their products work more efficiently with one another. Google's current cash cows (AFAIK) are search, email, and android. By making these products work more seamless with one another, they complement one another.
In the case of storage: If Google offers a ton of storage, that might be something that attracts them to their Office suite (which they also make money on, just not as much as the other three.)
Why would a user, for example, stick with Google Docs if it offered basically no storage (or the storage was expensive) when Office 365 offers 15GB (or whatever the amount is) for free? Amazon I imagine wants to attract people to its service so that they might buy AWS, EC2, or shop at Amazon. Either way, it works out in the end where you get stuff for cheap.
Also note that ALL of these companies are in the storage business for their own internal purposes. It likewise makes sense that they would lease out their own internal service to external customers at a cheap rate to help offset a cost that they ALREADY have to bear anyways.
And finally, I wish the hippies would make up their damn mind: They complain about how evil corporations are when something is too expensive, and then they make the same complaint when it is too inexpensive.