Cloud storage — and cloud computing in general — has been a foundational component of the SMB SaaS era. But you could also argue that it’s gotten somewhat commoditized as storage prices follow a pace similar to Moore’s Law; and offerings across the competitive landscape aren’t very differentiated.
Yet cloud storage carries all of the virtues of SMB SaaS in terms of recurring revenue and data lock-in. Try changing cloud storage providers and transferring your data. So though it’s mostly a commodity, it’s at the heart of many SMB Saas offerings as a core retention driver, not unlike website hosting and email.
Google’s GSuite is one example of this, as is Microsoft Office 365. Both contain cloud storage (Google Drive and OneDrive, respectively) as a cornerstone of their bundles, as a good way to get SMBs data-entwined. Many of the higher-value offerings of those packages (publishing & productivity) have smaller switching costs.
O.G. Cloud Storage
Then there’s the O.G. cloud storage provider that initially ignited the subsector: Dropbox. After its 2008 TechCrunch 50 debut (I was in the audience at the time), cloud storage and document collaboration have never been the same. And the company has done well since then, gone public and remains a SaaS darling.
But with a product that’s increasingly a commodity — albeit a retention-conducive one — it still has to find new growth. That applies to both attracting new customers as well as boosting average reveue per user (ARPU). That game of finding new growth gets harder and harder as public companies grow larger.
Dropbox is clearly in the throes of that very game, and this week signaled its next growth-driving play. It’s all about going deeper with existing customers (both SMBs and individuals) and having greater appeal to a wider base of new users. Both goals start and end with a more expansive product bundle.
Specifically, it launched several new services that have adjacency and synergy with the core cloud storage offering — a path it’s followed for years. The latest integrations include features that normally require third party products, such as password management, secure online vaults, and full computer backups.
Taking those one at a time, password management now lets users log into several online and app-based services across devices with a single password. This resembles some services like LastPass, but will carry the advantage of brand trust (which is obviously big for password management) and one-stop-shop appeal.
This also aligns with Dropbox’s core value driver from the beginning: being able to access things in the cloud from wherever you are or whatever device you’re on. Password management flows naturally from that principle and is bundled in with an existing suite, as opposed to the point solutions that occupy this space.
The new Online Vault meanwhile lets users store important documents in a high-security digital location. Think of this as the digital version of a physical lock-box for things like deeds and wills. Bringing it to digital space has advantages including sharing a pin with trusted individuals or legal counsel for emergency access.
As for the full computer backup, this operates like Apple’s Time Machine by periodically backing up the entire contents of your PC or Mac. If anything goes wrong and you lose data throughout the course of daily operations, you can retrieve files from previous backup points or restore completely to a previous point.
Blast from the Past
The above features will be available for Dropbox Plus users, while a separate set of tools will be available at the Dropbox Business tier. These include eSignature features from its recent HelloSign acquisition. It’s also launching an App Store within Dropbox to integrate plugins from popular tools like Slack and Zoom.
Bundling this slate of new features with existing product tiers supports the theory above that Dropbox is driven to both retain users, and have a more attractive bundle to grow its user base. We expect to see more of the same for Dropox and others in the increasingly feature-expansive cloud storage competitive field.
We’ll watch closely to see if Drobpox gains additional traction from this and its ongoing product evolution. Meanwhile, speaking of time machines, here’s that TechCrunch 50 Dropbox debut just for fun…