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Dropbox – a leading file-sharing platform battling for users

  -   19. March 2017
Source: IO-Images/

In a world that is becoming more connected every day, companies are working ever more connected, with teams from all over the world. For them to be able to work efficiently and exchange their knowledge, files need to be shared frequently. This is facilitated by so called file-sharing services, which provide a storage space online for everybody to use according to their needs. One of these providers is Dropbox, which is currently supporting 500 million people and 59,000 businesses worldwide on their way to an interconnected workplace.

To understand Dropbox and its importance today, it is essential to have a look at the background of this innovation. In 2007 two students, Drew Houston and Arash Ferdowsi, founded Dropbox Inc. as a way to work simultaneously on files from different locations, without having to send them back and forth via email every time. For the stored files they used the cloud storage offered by Amazon, which enabled them to store files on Amazon’s servers, rather than having to build hardware themselves. However, there was an even earlier model of a file-sharing service that is often forgotten. Two years prior, Aaron Levie and Dylan Smith founded Box, one of the first services available online for free. By 2017, Box had reached 41 million users and 59,000 businesses.

Dropbox as an innovation and its place in the technology cycle

While it is clear that Box was the first mover in this field of cloud computing, many others have joined up until today. According to the technology cycle established by Anderson and Tushman, Box was the innovation that started the ‘era of ferment’ for file-sharing services. In this phase of the technology cycle different products evolve, which are acting as substitutes to the first innovation. Well-known cloud services here are e.g. Dropbox, but also iCloud, Google Drive and OneDrive. As of today there is still no ‘dominant design’ found which is established as the best on the market. There are many different services existing, which use a similar foundation technology to operate. Like the characteristic for the technology cycle, the first mover does not win the majority of the market share. This can also be seen by the example of Box and Dropbox and their aforementioned number of users.

Dropbox is however an important innovation and can be described in different dimensions. Firstly, it was a product innovation in contrast to a process innovation since a completely new service was created. Secondly, Dropbox was an incremental innovation, based on the general system that file-sharing services use. This leads to the third aspect of Dropbox as an innovation; the fact that it was competence-enhancing, due to it building ‘on know-how embodied in the technology that it replace[d]’. Moreover, it can be described as both an architectural and a component innovation. The product Dropbox has a unique design as well as additional services which vary from Box. Furthermore, it was a result of a demand-pull, as students had the idea to develop a new service for solving their problem of collaborating on files.

Can Dropbox defend its leading role?

As mentioned above, files were stored at first with the help of the Amazon cloud. However, since 2015 Dropbox has started to develop their own hardware and build a network only for them to become more independent and be able to assemble servers fitting the needs of the company. This also helps the businesses which are using Dropbox, as they themselves do not have to own dedicated hardware, which is complicated due to high development and production costs. The company is developing many new services to stay competitive. The latest addition was Dropbox Business, which shall help companies to store files and work together even more effectively, while having advanced security features and a live support service. Other newly introduced services include Dropbox Paper, a creative collaboration tool and Smart Sync, which lets users decide which files only to keep online to prevent crowding their desktop.

While these new products are offering a good variety for users, competitor Box is not far behind. Both companies are trying to win businesses for their service, which is quite hard, as the services are very similar. Only time will tell if one company can position itself as the market leader or if today’s variety of services will remain.

Who wrote it?

Beate Gaitzsch

Beate Gaitzsch studies at the European Management School in Mainz.


Sophia Pan
22-03-2017 20:58

Honestly I have never heard of "Box" before! So it was very interesting to get to know more about it and about the other competitors of Dropbox. I think it was indeed a very important innovation that has facilitated working in different places a lot. Personally I have used Dropbox already many times as it is simply so convenient, easy to use and practical! I have also used OneDrive quite some times and actually started to prefer using OneDrive instead of Dropbox. It seems to me that they have more functions to offer but maybe I am not well informed about all the functions of Dropbox. I am also, as others have already commented, still a bit concerned about the data security and privacy issues. It would be interesting to know what kind of concept Dropbox offers to ensure data security. Especially when it comes to this dropbox product developed for businesses the data security becomes an even more important topic!

Julia Ursu
22-03-2017 16:00

Nice article! I did not know about the background story of drop box or that there is such a big development in the sharing online industry. I liked it that you explained the different dimensions of Dropbox. That gave me as well a good insight what I did not had. It is nice to see how students found a nice solution for a problem that almost every student knows. Dropbox makes the lifes for students easier. But what about data security what already other students mentioned?

Patricia Hofmann
22-03-2017 12:04

I never knew that there was such abbig development in the sharing industry. I've never used dropbox or a similar programm like the cloud before. I know it is a useful thing especially when it comes to working in teams or staying in touch when you're living far apart. It is interesting to read how much the sharing of files was simplfied throughout the years and how important it actually became. Of course one of the risks for dropbox is the high number of competitors, but dropbox can be used by everyone and doesn't require a certain cell phone type to use it.

Thorben Theis
22-03-2017 11:15

It was very interesting to read that two students once had a problem and came up with an idea to solve it. Dropbox, or similar services, make the lives of many people easier. Especially for businesses this innovation can be very beneficial. What do you thing how dropbox can add more services? Do you thing that one day business will only use dropbox without having any hardware to save files?

22-03-2017 00:36

Thank you for this insightful Article! I really liked how you described the different dimensions of Dropbox. I think Dropbox managed to create a simple, accessible and affordable innovation. Dropbox made it easy for every user to have access to his/her documents, wherever they are. Digital Transition made that possible. File Sharing Services created a whole new market, which in turn simplified processes as you are able to work on your documents wherever you are. As you correctly said is Dropbox a result of a demand pull. The demand after a simple but affordable approach was very high and they managed the problem very well. What in my opinion would be interesting to know is if there is any backup if something happens? I think if I loose a document which was on my Dropbox, it wouldn’t be a big loss to me. But if we are talking about important company data on a corporate Cloud – the loss would be immense. Data loss has a negative impact on intern decisions and on business operation.

Isabelle Hachenberg
21-03-2017 23:40

While reading your article I realized, that I have an account on Dropbox but I never really used it. A reason for that might be that I was never aware of the functions offered by this file-sharing platform and how much easier it can make working collaborations. What I found interesting is that Dropbox was not the first mover on this field. As stated before, it shows us that you do not need to be the first mover to be successful and a leader in your industry. As we talked about this topic in yesterday's class, your way of entering a market is much more significant. I like the idea of Dropbox Business, support especially businesses in storing their data with a maximum security approach. I'm curious about new ideas and who will win the race of becoming the permanent leader in the file-sharing industry.

Patrick Hanke
20-03-2017 21:05

As we talked about today, often the first-mover is not the leader in the market segment later on. Learning from the sharing platforms like Box, that have kick-started this segment, definitely helped Dropbox become the leader in the file sharing industry that they are today. Therefore, Dropbox can, as you have already stated, be considered as an incremental innovation. New applications and new features were added, improving the technology. Having used Dropbox myself in the past, I can truly say that it really makes collaboration of teams a lot easier.

Letizia Credico
20-03-2017 12:43

While reading your article about Dropbox, probably the most well-known file-sharing platform around the world, I started to think about how much the sharing of files has been simplified. When I first heard of Dropbox, I didn't really know what to do with it. Dropbox didn't really convince me since I wasn't well-informed about data protection and security. I couldn't absolutely count on this innovation, even if my friends and classmates wanted me to use it. However, I must honestly admit that I "had to" take it into consideration since it would simplify teamworks and the preparation of presentations at university. When I started my semester abroad in Argentina, I was super surprised by how many students utilized Dropbox. From that moment I knew that technology had caught me.

Marie Schubert
20-03-2017 11:14

To my mind Dropbox and related companies you mentioned did really ease the file-sharing. It especially simplified group-work at university and the sharing of files between team-members at work. I like, that you can edit files online on the storage space and the other person can immediately see your changes without having send the documents via email. As we are receiving and sending many e-mails per day, this service increased consumer convenience a lot, to my point of view. Creating an application for mobile devices makes Dropbox even more attractive. On the other hand the topic of data security related to Dropbox needs to be critically evaluated. Dropbox is claimed to save the files without protecting the data accurately, which is resulting in Dropbox employees having ´free access´ to the data. In addition, in August 2016 the company had to face criticism. According to articles, the company was hacked and over 68 million users have been affected, which could be seen as a big drawback for the company. To my mind, ensuring data safety is therefore one of the main obligations of Dropbox in order to attract new and to keep already existing customers.

Katharina Blanckart
20-03-2017 09:15

I find it very interesting to see how the file sharing technology developed over the years and that, like you stated, the brand best known and selling today, was not the first mover coming up with the concept first. You mention the different characteristics and patterns of this innovation which really gives the reader more information into Dropbox itself but also some background know-how how it came to this innovation and what are the main aspects about it that made it so revolutionary. I agree with you that demand-pull was absolutely a crucial component bringing Dropbox into live, as you said sending several emails to exchange files, documents or pictures is very time-consuming and simply bothersome after a while. What got me wondering on the other side was thinking more closely about the technological component of this innovation and to which degree file sharing platforms like Box or Dropbox are reliant on technology levels who enabled this. Another aspect which might be interesting for further research is in my opinion the question of security as there enough examples where security of private is very questionable, for example ICloud. How is Dropbox securing their information server or maybe the providers themselves sell the data and make use of it? What are potential unwanted side effects and what should users keep in mind when using these services? That would be very interesting to discuss further.



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