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by Michael Gariffo

Docid: 00021085

Publication Date: 2108

Report Type: PRODUCT


Arguably the most recognizable of the many cloud-based storage services
currently on the market, Dropbox is also one of the longest standing. The
company owes its popularity and fame to the fact that it was one of
the first in the world to offer a free tier to its customers and one of the
first to simplify the process of storing files in the cloud by just dropping them in a local folder. Dropbox made a process that was
once limited to tech savvy users into a tool for the general populace, bringing
cloud-based storage into the mainstream.

Report Contents:

Figure 1. The Dropbox User Interface on MacOS

Figure 1. The Dropbox User Interface on MacOS

Source: Dropbox


Faulkner Reports
The Cloud
Storage Marketplace


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Dropbox is a cloud-based storage service designed to allow users to sync
their files across multiple desktops, laptops, smartphones, and tablets. It does
this by creating a special folder on the user’s device of choice. That
folder’s contents are then populated across all devices signed in with that
user’s account information, creating a single, constantly updated, cloud-based
storage repository that the user can access from anywhere they choose. The service was not the first of its kind, but it was one of
the first to simplify the process of storing and syncing files down to something
as simple as dropping them in a local folder. It was also a pioneer of the
still-popular "freemium" model, offering a free tier with a small
amount of storage and several paid tiers with larger amounts and additional
benefits. These aspects combined to make Dropbox extremely
popular very quickly, with the company maintaining that momentum today.

Dropbox Headquarters
333 Brannan St
San Francisco, CA 94107
Phone: (888) 446-8396
Web: http://www.dropbox.com/
Type of Vendor: Software, Cloud-Based Storage
Founded: 2007
Service Areas: Global
Stock Symbol: DBX (Nasdaq)

History & Milestone Events

Dropbox was founded in June 2007 by MIT student Drew Houston.1
The company’s creator claimed that he got the idea to create the service
when he kept forgetting his flash drive while running between classes.2
Although there were other cloud-based file storage services on the
market prior to Dropbox’s launch, Houston claimed that he found them
slow, buggy, and much more difficult to use than his own idea of how a
cloud-based storage system should operate. Houston’s desire for a
simplistic cloud-based storage solution quickly drew the attention of
startup accelerator Y-Combinator, which provided Dropbox’s initial round
of funding.3 Since then, Dropbox has
continued to grow at an almost exponential rate. Noteworthy moments from the
company’s past have included:

  • 2008 – Dropbox makes its public debut at 2008’s
    TechCrunch Disrupt conference.
  • 2009 – Dropbox acquires and launches the
    Dropbox.com domain, having previously been forced to use "getdropbox.com"
    due to a naming dispute with Proxy, Inc.4 Later in the year,
    Dropbox passes one million users for the first time.
  • 2010 – Dropbox enters the mobile device market with
    the release of its first iPhone app.
  • 2011 – Dropbox passes 50 million users in just over
    two years in operation.5
  • 2012 – Dropbox makes its first major acquisition in
    the form of TapEngage, a company specializing in tablet-optimized
    advertising. This is quickly followed in the same year by AudioGalaxy, a
    service designed to help users stream music they have stored in the
    cloud; and Snapjoy, a startup specializing in the aggregation of digital
    photos from their own devices as well as third party services. In
    November, Dropbox hits 100 million users.6
  • 2013 – Dropbox acquires Mailbox, a popular email
    app, and Endorse, a mobile coupon startup. The company continues its
    growth trend, reaching 200 million users in November.7
  • 2014 – In April, Dropbox acquires photo sharing
    company Loom, quickly incorporating the acquired firm’s assets into its
    new Dropbox Carousel photo and video gallery feature. The feature would
    later be retired, but many of its characteristics would go on to be
    incorporated into Dropbox’s main client interface. Also in 2014, Dropbox
    signs an agreement with Microsoft that allows users to store files on
    the service from within the Microsoft Office suite.
  • 2015 – Dropbox hits 400 million users in June.8
    Also in 2015, the company launches Dropbox Paper, its own take on a
    cloud-based collaborative note taking and document editing solution.
  • 2016 – Dropbox hits 500 million users in March.9
  • 2017 – Dropbox introduces a new one terabyte storage tier
    dubbed Dropbox Plus, including additional features such as advanced
    sharing controls, remote wipe, and versioning history.
  • 2018 – Dropbox files an IPO to be listed on the
    NASDAQ stock exchange. The company’s hope was to raise $500 million
    through the transaction. It closed its first day of trading at $28.89
    per share, a 42 percent increase over its IPO price.10
  • 2019 – Dropbox changes its long-standing policy of offering
    an unlimited number of synced devices to free tier users and begins
    limiting them to only three devices. Paid users are unaffected by the
  • 2020 – Dropbox launches its own password manager
    and a personal "vault" for storing important documents like birth
  • 2021 – Dropbox announced the layoff of 315 workers
    in January, representing about 11 percent of its workforce. Later in the
    year, the company acquired DocSend, a secure document sharing and
    analytics service.

Current View

Although Dropbox has dabbled with other products (Dropbox Carousel, Dropbox
Paper, Hackpad, etc.), its primary offering remains its cloud-based storage
service. Dropbox storage is currently available for the
following operating systems: Windows, MacOS, Linux, iOS, and Android. The three desktop operating systems all share a similar install and usage
process: a single file folder is created on the user’s PC, providing a local
representation of that user’s entire Dropbox storage drive. The size of this
drive is 2GB to start for the free tier, but can be expanded somewhat by
completing various promotional tasks set out by Dropbox itself. These include
linking a mobile device, tweeting about Dropbox, social media mentions,
referrals, and more. Although these tasks can multiply the space available to a
user by several times, most professional Dropbox subscribers will want more than
the 16GB or so of maximum space this can provide. For them, Dropbox offers
several paid tiers of storage service, which will be covered in more detail

As the desktop usage experience is essentially universal between Windows,
MacOS, and Linux, so too is the mobile usage experience largely identical
between iOS and Android. Like its desktop counterpart, the
mobile version of Dropbox creates a file folder on the user’s device where stored files are kept and synced across the other instances of their Dropbox
account. However, due to the tendency for mobile devices to have smaller local
storage capacities, not all files are immediately downloaded by default.
Instead, the software will provide previews of the available files, only
downloading them to local storage when the user demands it. This provides full
access to the user’s entire library of cloud storage without crippling their
local storage by expecting it to handle the full terabyte+ of data some
customers have stored with Dropbox. Aside from this consideration, the
experience largely mirrors the desktop one, with full control of file creation,
deletion, versioning and more.

Storage Tiers

Dropbox’s current offerings are divided into two categories: those designed
for individuals and those for business users. For individuals, the
company offers a single free plan and multiple paid offerings, while its Dropbox
Business service offers a total of three paid tiers. Below is a full list of the
company’s storage tiers for both types of client,
complete with all features and storage caps by each tier.

Dropbox for Individuals

  • Dropbox Basic – This free tier is available to anyone
    signing up for Dropbox.

    • Storage Space – 2GB to start, expandable to
      approximately 16GB
      via referrals and other promotional offers.
    • Additional Features –
      • Camera Upload – Automatic uploads of pictures taken from a
        linked smartphone or tablet.
      • Document Scanning – Automatic upload of documents scanned via a
        connected desktop, or documents captured via a connected smartphone.
      • Shared Folders and Links – The ability to share single files or
        entire folders by generating a link to that file’s cloud-based copy
        on Dropbox’s servers.
    • Cost – Free
  • Dropbox Plus – The company’s least expensive paid tier,
    designed for users that require more storage space but do not need advanced
    version control features.

    • Storage Space – 2TB (terabyte)
    • Additional Features –
      • All Dropbox Basic features
      • Mobile Offline Folders – The ability to sync entire folders to
        mobile devices for use when an active Internet connection is not
      • Dropbox Smart Sync – Allows users to download only the files they
        need to desktop PCs in much the same way as the mobile app handles
      • Full Text Search – Allows users to search the text contained
        within all stored files.
    • Cost – $9.99 per month or $16.99 per month for a
      family version with up to 6 users sharing the same 2TB of storage.
  • Dropbox Professional – This is Dropbox’s top tier plan
    for individuals, designed for self-employed professionals or those wishing
    to have the most features and maximum control of their cloud storage.

    • Storage Space – 3TB (terabyte)
    • Additional Features –
      • All Dropbox Basic and Plus Features
      • Dropbox Showcase – Allows users to customize their branding and
        visual previews, as well as track user behaviors.
      • Shared Link Controls – Allows multiple users to share files with
        password protected download permissions and expiration dates.
      • Viewer History – Allows users to see who views which files and when.
    • Cost – $16.58 per month.

Dropbox Business

  • For Teams
    • Standard – The lowest tier in this group, it is the only Dropbox
      Business offering with limited storage and is designed for the average
      employee that requires their stored files to be fully portable but does not
      require the advanced control features of the following tiers.

      • Storage Space – 5TB (terabyte)
      • Additional Features –
        • Version History and File Recovery – The ability to track the
          version history of files as they are updated, as well as the ability
          to recover deleted files for up to 120 days after their destruction.
        • Advanced Sharing and Permissions – The ability to control which
          systems accessing a given Dropbox can edit or delete files, as well
          as the option to disable downloading of certain files.
        • Password Protected Shared Links – This allows the user to
          provide links to stored files that require a user-defined password
          to access.
        • Remote Device Wipe – A security measure that allows users to
          remotely wipe their files from a given device if it is lost or
        • Granular Permission – The option to manage user rights for
          individual files and folders.
        • Account Transfer Tool – A tool that makes its possible to
          easily transfer files and folders between users without the need for
          transmission over the open Web.
        • HIPAA Compliance – An assurance that Dropbox’s storage service
          complies with HIPAA and HITECH regulations safeguarding user data
          in the category of Protected Health Information.
        • Microsoft Office 365 Integration – Allows users to save and open
          documents from within the Office 365 interface.
      • Support Options –
        • Priority email support
        • Live chat support
      • Cost – $12.50 per user per month (minimum of 3
    • Advanced – The mid-level tier of Dropbox Business
      offers nearly all of the company’s features, with the exclusion of EMM
      (Enterprise Mobility Management) characteristics needed by companies that
      manage a fleet of mobile devices.

      • Storage Space – Unlimited
      • Additional Features –
        • All features supported by Standard.
        • Device Approvals – The ability for system administrators to
          control the number and nature of connected devices that can access
          any given Dropbox.
        • Showcase – A method of sharing files with customized branding,
          visual previews, and captions. This feature also allows users to
          track who accessed their shared files.
        • Viewer History – The ability to see who has accessed a file
          shared over the Web.
        • Additional Administrative Tools – A slate of administrative
          control tools, including tiered administration roles, the ability to
          sign in as multiple users, auditing of usage log files, and the
          integration of single sign-on tools.
      • Support Options –
        • Priority email support
        • Live chat support
        • Phone support (during business hours only)
      • Cost – $20 per user per month (minimum of 3 users).
    • Enterprise – As the name would suggest, this tier is
      for enterprise-class customers wanting the maximum storage space and utmost
      control over their stored files.

      • Storage Space – Unlimited
      • Additional Features –
        • All features supported by Advanced and Standard above.
        • Enterprise Mobility Management – The option to integrate Dropbox
          with third-party EMM solutions, making it possible to transfer user
          control characteristics without the need to manually enter them for
          each EMM-enabled user.
        • Domain Insight and Account Capture – A tool that allows
          administrators to view all usage across a domain in a single pane.
        • Network Control – A security measure allowing admins to restrict
          all Dropbox usage on their network to their assigned Dropbox team
      • Support Options –
        • Priority email support
        • Live chat support
        • Phone support (24/7)
        • Available advanced training for end users and admins.
      • Cost – Contact for pricing.
  • For Individuals
    • Professional – A business-focused offering for
      freelancers or professionals that desire an independent storage

      • Storage Space – 3TB (terabyte)
      • Additional Features –
        • Identical to Standard above, with the
          exception of an account transfer tool and HIPAA compliance
      • Support Options –
        • Priority email support
        • Live chat support
    • Professional + eSign – The same exact plan as
      Professional with added access to unlimited, legally binding eSigning
      requests, 5 custom eSignature templates, and increased eSignature
      security and privacy standards.


Dropbox’s primary strength is derived from its long history of usage
and expansion. The company has been around for more than one decade at
this point, showing that is has grown well beyond its days as a
"startup" and has become an integral part of the modern tech landscape.
It also pioneered the concept of handling cloud storage via a sync-able,
locally accessible folder. Previous efforts had generally relied on
Web-based front-ends that required the user to manually upload each file
they wished to move into cloud storage, followed by manually downloading
those files when they wished to use them on another system. In place of
this, Dropbox creates a single folder that a user can universally expect
to be available on any device where they have signed into
their Dropbox account. Thanks to the company’s presence on all major
desktop and mobile operating systems, this means it is possible to
have a single Dropbox folder available to a single or team of users
working across any number of desktops, laptops, thin clients,
smartphones, and tablets.

Such ubiquity would only carry Dropbox so far if the service was not
easily integrated with the variety of third-party software used to produce and edit the
files stored on its servers. Thankfully for Dropbox and its users, the company
has done well to align itself with some of the most commonly used software
makers and largest tech companies in the world. This includes a strong
relationship with Microsoft which has integrated Dropbox storage into
Office 365. On the mobile side, Dropbox
comes pre-loaded on a variety of Samsung smartphones and
tablets, thanks to an agreement with the device maker. The
company has even cemented a presence in the social media marketplace by signing a
deal with Facebook that allows users of Facebook Groups to share files with
other members of their group via Dropbox’s service.

While its existing relationships are impressive, Dropbox also fosters the
continued integration of its storage services into third party applications and
solutions via the creation of its own API (Application Programming Interface).
The existence of this API makes it easy for third-party developers to integrate
Dropbox-based storage into both desktop and mobile applications. This can prove
to be a particular boon for mobile developers who are often creating apps for
devices that have little or no access to a local file storage system.


The most glaring weakness in Dropbox’s current
offerings is the size of its free storage tiers. 2GB of space is relatively
paltry by today’s standards. Competing offerings from Google, Microsoft, and Box
offer anywhere from 15GB of space to 50GB of space for free. Meanwhile, Dropbox
users get just a fraction of that, unless they are willing to evangelize for the
company in order to earn the maximum of 16GB of space. Even then, this would
likely be too little storage for anything more than a casual, individual user.
It does seem as if the company could easily remedy this by expanding its free
storage tier. But, so far, it has shown no desire to do so.

While its storage size drawbacks may be the most public of its weaknesses,
the company’s various security missteps are its most worrisome,
especially for business subscribers. This is not to say that Dropbox has had
a large number of security blunders. In fact, for a company of its nature and
size, its breaches and incidents have been relatively few and far between.
However, a handful of them have been extremely concerning. These include a 2011
incident that allowed numerous user accounts to be accessed without passwords
for several hours; multiple instances of all registered users
receiving spam emails in 2012 and 2013; a 2016 leak of 68 million account
passwords; and a 2017 blunder that saw years-old files that should have been
deleted from the company’s servers reappearing in user’s Dropbox folders.11-15
As previously stated, any company the size of Dropbox tends to have incidents of this type. What is important is how the
company handles these incidents, how it mitigates inconvenience and risk to
users, and how transparent it is about such occurrences. Thankfully for Dropbox’s user base, its behavior in the wake of
each episode has been
generally seen as positive.

While at least some of these issues are, arguably,
unavoidable, what can be controlled is the company’s own policies relating to
user data. Unfortunately, Dropbox has made a few errors in this arena as
well. The most well known – and most easily avoided – occurred in 2011 when it
made a change to its privacy policy that seemed to suggest it had the
right to share or even sell the data that any user had stored.16
Thankfully, this apparent misunderstanding was quickly cleared up when the
company clarified that portion of the language in the policy,
making it clear that its access to user data was "solely to enable
[it] to technically administer, display, and operate [its] Services." While this
may be the most glaring error caused by Dropbox itself, it is not the only
instance where the company’s handling of users’ sensitive data was brought into
question. Other problems that have arisen over the years included the revelation
that the National Security Agency considered Dropbox for inclusion in its now
infamous PRISM domestic spying program, and criticism from Edward Snowden, the
man largely responsible for exposing PRISM, over Dropbox’s file encryption
technology and policies.17,18 Fortunately for Dropbox, no proof of
its participation in PRISM or of any truly worrisome flaws in its encryption
have been made public.


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Dropbox’s applications range across the customer base from individual users
to business users and enterprise-class users. The company supports everything from
a mom wishing to store precious photos of her family to a doctor’s office
storing patient files to a Fortune 500 enterprise needing a collaborative
storage platform for teams of hundreds. The flexibility in its storage tiers
(2GB to unlimited) support any type of user, while the availability of control and security features guarantees that any user will be
pleased with the result as long as they select the correct tier for their needs.

In a similar vein, third party developers wishing to add support for
cloud-based storage to their applications can do so by employing the Dropbox
API. This gives them both an "off-the-shelf" option for bringing cloud storage
into their product and a way to allow users to employ a cloud storage
solution that many of them are already using. This streamlines both the
development process, as well as the usage process, making Dropbox an excellent
choice for many third-party devs lacking the necessary resources to create their
own cloud-based storage interface and service.


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Dropbox’s support tiers span both its individual plans as well as its Dropbox
Business plans. All tiers include "Self Support" (access to the company’s
various FAQs, forums, and online help portals) as well as email support. All
paid tiers of Dropbox’s service provide additional support options,
including priority email support, live chat, phone support, and even training
for end users and admins. The specific types of support available to customers
varies based on the tier of their subscription. A more detailed explanation of
which support methods are included in each plan can be seen above in the
Storage Tiers section.


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Dropbox’s closest competitors include Google’s Google Drive service and
Microsoft’s OneDrive. Although both of these offerings provide pure cloud-based
storage offerings, they are also designed from the ground up to work as cloud
storage solutions for an accompanying suite of Web-based software products. In
Google’s case this would be its G Suite of online productivity tools as well as
its Gmail service, while Microsoft’s case would include its Outlook
email service and Office 365 ecosystem of products. Smaller competitors such as
Box and SpiderOak provide service profiles more similar to Dropbox’s but
without anywhere near the user penetration that Dropbox can boast. A more
complete profile of competing services can be found within Faulkner Information
Services’ Cloud Storage Marketplace report linked in the Related Reports section

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1 Ying, John. "Meet the Team!" Dropbox
blog. Retrieved June 12, 2018.

2 Ibid.

3 "Dropbox – Funding." Crunchbase.
Retrieved June 12, 2018.

4 Kincaid, Jason. "Dropbox Acquires the Domain Everyone Thought It Had: Dropbox.com."
TechCrunch. October 13,

5 Barret, Victoria. "Dropbox: The Inside Story of Tech’s Hottest Startup."

. October 18, 2011.

6 Houston, Drew. "Thanks a (Hundred) Million."
Dropbox blog. November 12, 2012.

7 Constine, Josh. "Dropbox Hits 200M Users, Unveils New ‘For Business’ Client
Combining Work and Personal Files."
. November 13, 2013.

8 Houston, Drew; Ferdowsi, Arash. "400 Million Strong." Dropbox blog. June 24, 2015.

9 Houston, Drew; Ferdowsi, Arash. "Celebrating Half a Billion Users." Dropbox blog. March 7, 2016.

10 "Shares of Dropbox Surge in First Day of Trading." NBC News. Retrieved June 14, 2018.

11 Kincaid, Jason. "Dropbox Security Bug Made Passwords Optional for Four
Hours." TechCrunch. June 20, 2011.

12 Brodkin, Jon. "Dropbox Hires ‘Outside Experts’ to Investigate
Possible E-Mail Breach." Ars Technica. July 18,

13 Robertson, Adi. "Dropbox Users Claim Email Addresses Leaked to Spammers,
Company Blames 2012 Security Breach." The
. February 28, 2013.

14 Mendelsohn, Tom. "Dropbox Hackers Stole E-Mail Addresses, Hashed Passwords
from 68M Accounts." Ars Technica.
August 31, 2016.

15 Tung, Liam. "Dropbox Bug Kept Users’ Deleted Files on Its Servers for Six
Years". ZDNet. January 25, 2017.

16 White, Christopher. "Dropbox Can Legally Sell All of Your Files [update]."

. July 2, 2011.

17 Greenwald, Glenn; MacAskill, Ewen. "NSA Prism Program Taps into User Data
of Apple, Google and Others". The
. June 7, 2013.

18 Yadron, Danny; MacMillan, Douglas. "Snowden Says Drop Dropbox, Use
SpiderOak". The Wall Street Journal.
July 17, 2014.

About the Author

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Michael Gariffo is an editor for Faulkner Information
Services. He tracks and writes about enterprise software and the IT services
sector, as well as telecommunications and data networking.

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