Businessmodel of Dropbox

Customer Segments

Dropbox offers cloud storage solutions and file-sharing solutions to a range of customers, including general consumers and commercial entities. The Company’s solutions are targeted principally three customer segments:

• Individuals, comprising general consumers, students, and professionals, who are able to backup personal files such as photos in the cloud;
• Small Businesses, comprising small businesses across multiple sectors, notably creative industries, that operate small teams that are required to work on collaborative projects; and
• Enterprises, comprising large-scale, multinational businesses that require more complex, custom solution that can be scaled enterprise-wide. Dropbox includes a number of high-profile companies and organisations among its 200,000 commercial customers, including Yahoo, Hyatt, Under Armour, News Corp, Hewlett Packard Enterprise, National Geographic, Spotify, NASDAQ, and Expedia.

Dropbox is an online solution, and as such the Company is able to serve a broad international customer base. The Company’s principal market, however, remains its domestic market in the US.

Value Propositions

Dropbox provides value to its customers in the following ways:

• Its reputation and industry standing, with the Company established as a reliable provider of cloud solutions and file-sharing services, serving a number of market-leading customers such as Yahoo, National Geographic, and Hewlett Packard Enterprise;
• The quality and reliability of its solutions, with the Company providing high-quality dedicated cloud storage and file-sharing solutions;
• Its security and privacy controls, with the Company utilising state-of-the-art security controls and file encryptions to ensure the files of its customers remain private;
• Its specialist technical personnel, with the Company employing teams of highly-trained technical personnel across its development, support, and integration departments; and
• The accessibility and flexibility of its solutions, with the Company providing solutions across a broad range of operating systems, both on mobile devices and desktop computers, and offering flexible, customisable solutions to its enterprise customers. ### Channels

Dropbox operates a website at www.dropbox.com, through which it provides information on its solutions and services. The Company’s website also serves as a sales channel, with individual and small business customers able to sign-up for free trials, register user accounts, and purchase service subscriptions directly. Dropbox also operates an in-house sales team, which can be contacted by phone, via email, or through an online chat service.

Once customers have subscribed to the Dropbox platform, they are able to access the service through a range of online channels. This includes the Company’s website, which is available via desktop and mobile browsers, as well as a range of mobile and desktop apps, including for Android, OS X and iOS, Windows and Windows Phone, Blackberry, and Linux. Additionally, Dropbox functionality is integrated into a number of third-party applications, including integrations from Microsoft, Salesforce, Dell, Adobe, and DocuSign.

Dropbox also utilises a network of referral and reseller partners to extend its owns sales and marketing reach.

Customer Relationships

Dropbox’s cloud storage and files-sharing solutions are available to customers on a self-service basis. Customers are able to register user accounts, access free trials, download software, and manage subscriptions through the Company’s website without interacting with members of the Company’s sales team. Once registered, customers can access the full functionality of the Company’s platform autonomously through its various mobile and desktop applications.

Dropbox’s enterprise solutions are sold through its in-house sales force, who are able to assist larger commercial customers directly, consulting with them in order to address their individual needs, concerns, and requirements. The Company continues to provide personal care to its enterprise customers through dedicated account management teams, which are available to assist customers at all times.

Dropbox provides ongoing technical support to its customers. It provides a range of online resources through its website, including extensive user tutorials, FAQs, and troubleshooting guides. The Company also hosts a community forum, through which users can interact with one another and share solutions to common issues. Alternatively, customers can contact support staff directly over the phone, or via an online contact form.

Customers are also able to interact directly with Dropbox through its social media accounts, including with Twitter, Facebook, Google+, and YouTube.

Key Activities

Dropbox is a software technology company. It principally provides cloud-storage and file-sharing solutions to individual customers, as well as to small businesses and large commercial enterprises. Its flagship Dropbox platform, allows users to edit documents, automatically add photos, and share photos and videos, and work with a team.

The Company business and enterprise solutions securely protect the work of its users, and enables team members to access files from any computer, phone, or tablet, either through the Company’s website or via one of its many desktop and mobile applications. The Company also offers flexible, customisable solutions that can be scaled across part or all of a multinational enterprise.

Key Partners

Dropbox collaborates with a range of companies in developing and implementing its solutions. These partners include:

• Channel Partners, comprising a range of technology companies, software companies, consulting firms, websites, and independent software vendors that function as resellers, helping to extend the sales and marketing reach of the Company’s in-house teams;
• Technology Partners, comprising a range of technology companies, software developers, and specialist integration companies that assist in developing solutions and integrating third-party functionality into the Dropbox platform; and
• Strategic and Alliance Partners, comprising a range of companies and organisations, with which the Company shares tools and resources and collaborates on joint projects. Dropbox includes a number of high-profile name among its partners, with its channel partners including Hewlett Packard Enterprise, Synnex Corp, Ingram Micro, and Insight; and its technology partners including Salesforce, Adobe. Microsoft, Airwatch, and Dell. Dropbox also recently added IBM to its partner network, functioning as one of its premier technology partners.

Key Resources

Dropbox’s key resources are its technologies and intellectual properties, its online and mobile platforms, its IT and communications infrastructure, its sales and distribution channel, its partnerships – particularly its premier technology partners, and its personnel.

Dropbox’s technologies are key to its ongoing operations. Searches of records published by the US Patent and Trademark Office identified a number of applications filed in the name of Dropbox, including applications entitled ‘Enriching contact data based on content sharing history in a content management system’, ‘Communicating large amounts of data over a network with improved efficiency’, and ‘Content item sharing and synchronization system with team shared folders’.

Dropbox also owns and leases a number of office properties across North America, Europe, Asia Pacific, and the Middle East, including in Amsterdam, Herzliya, Tokyo, Sydney, London, New York, and Seattle.

Cost Structure

Dropbox incurs costs in relation to the development of its software solutions and digital platforms, the maintenance of its communications and IT infrastructure, the operation of its sales and distribution channels, the implementation of marketing schemes, the management of its partnerships, and the retention of its personnel.

Much of the Company’ costs relate to the payment of salaries and benefits to its workforce, as well as occupancy and utility costs accrued across its international network of offices.

Revenue Streams

Dropbox generates revenue through the provision of cloud-storage and file-sharing services. The Company operates under a freemium business model, providing a basic version of its platform to users free of charge, with the option of subscribing to premium accounts I order to access greater functionality.

Dropbox offers three premium subscription plans: Professional, which is priced at $8.25 per month paid annually or $9.99 per month paid monthly; Business, priced at $12.50 per month paid annually or $15 per month paid monthly; and Enterprise, to which custom fees are applied.

While Dropbox has been touted for a public listing, the Company remain privately-owned, and as such does not publish its financials on its website. Reports, however, suggest that the Company is moving towards profitability, with the Company’s 2015 annual sales run rate around $400 million.