What are Dropbox’s competitive advantages (if any) vs. other comparable third-party services (e.g. box.net)?
Performance and simplicity is Dropbox’s competitive advantage vs. other comparable third-party services. This competitive advantage comes from the Dropbox’s conscious decision of targeting the end consumers while other major third-party services have Enterprise users as their primary target.
Three critical features required for enterprise customers are Security, compliance and management. In addition to these three, the enterprise storage has to integrate with existing enterprise software (like Salesforce). Simplicity and performance are generally traded off with the above requirements. This makes it incredible hard for third-party services like Box to wage an attack on Dropbox.
The impact of choosing which customer segment to serve is evident from the choices that Box and Dropbox have made. | Dropbox (consumer) | Box (enterprise) | Storage | AWS | Vertically integrated with its own Colo/Storage (Indemnification, security and compliance requirements) | Product Versions | Single consumer version Business solution with Team features and admin control | Enterprise add-ons, Business Apps platform and integration/partnership with enterprise software vendors | Document Version control | Limited support | Full support (Important for collaboration and audits) | Access control and Management | Limited support (Just recently released team feature) * Individual users can control access * Team license * Administrator view * Controls like unlinking of device and preventing team members to share document outside the team | Provides tools for administrators to control access. Some examples * Restrict storage of document on mobile device * Ensure Passcode is set on mobile device * Allows administrators to find and remove content * Fine grained access control that integrates with enterprise authentication system |
What are Dropbox’s competitive advantages (if any) vs. comparable services from leading mobile device platform sponsors (Apple, Google, Microsoft, Amazon)? How does Dropbox address the platform envelopment threat from these companies (i.e., how does Dropbox avoid becoming the next Netscape as mentioned at the end of the case)?
Horizontal Integration is the biggest competitive advantage for Dropbox against leading device platform sponsors. It has integrated with 18 different Operating Systems, four browsers and 3 mobile software systems. As long as the mobile device platform stays as a non-WTA market there will always be a need for platform neutral, ubiquitous cloud storage solution (“Dropbox”).
Platform Stack for Online File Storage and Collaboration Browser and Client Application | Client Devices | Client Device Management | Content Management and Collaboration | Data Replication, Backup and Restore | Data Store/File system | Cloud Infrastructure |
Partnerships with Client Device Manufacturers – Dropbox has partnered with Client Device Manufacturers like HTC to become the default cloud storage option on their Android Phones. Similar deals with six other phone manufacturers is inked and similar deals may come for PC and television makers5.
How does one define Dropbox’s market?
I think currently dropbox’s market is consumer online file storage and collaboration. The product is not geared towards Enterprise market (They have made some attempt in targeting SMB market segment recently )
Is there a Natural Monopoly?
There are numerous players in the consumer online File Storage and Collaboration market. This in itself indicates that its not a natural monopoly
Are there network effects? * Cross Side? Yes
There are positive cross side effects. Greater the number of users the greater will be the Developers willing to build on top of Dropbox API. Similarly, greater the number of users greater willingness on part of client device…