Cloud Stocks: Dropbox Acquires, But Competition Remains Stiff

Prior to the acquisition, DocSend had raised $15.3 million in four rounds of funding from investors DCM Ventures, August Capital, Augusta Investments LLC, Adeyemi Ajao, Western Technology Investment, Cowboy Ventures, Uncork Capital, Jonathan Golden, and Lerer Hippeau.

Dropbox’s PaaS Strategy

Dropbox currently offers SDKs for several popular programming languages along with several pre-built components that let developers build applications on its platform. It also allows them to leverage APIs to build custom solutions. Dropbox claims that over 500,000 developers are working on its platform. It witnesses over 50 billion API calls each month and believes that nearly three-quarters of the business teams link to third party APIs on its platform. Dropbox has several integrations available that allow developers to add Dropbox features such as file storage, sharing, previews, and search to their apps. It has integrations with leading enterprise services including Zoom, Microsoft, Google, Slack, and Adobe to name a few.

Dropbox’s biggest concern remains its ability to pry user base away from its competition. A report published last year saw Dropbox’s share of the global cloud storage market fall from 4.4% in 2017 to 3.6% in 2019. Dropbox is facing tough competition from the likes of Google, Microsoft, and Apple who offer free or inexpensive solutions to their customers as part of their integrated offerings. Google, for instance, allows 15GB of free storage space to all its users. Similarly, Apple iCloud and Microsoft OneDrive allow users to store 5GB data for free. According to a report by New Constructs, Google’s GSuite had 2 billion active users followed by Apple’s 1.5 billion globally. Compare that with Dropbox’s modest paying user base of 15 million. Given below is an interesting table showing the wide gap in the competition, courtesy Forbes.

DBX Users Vs Competition

Its stock is trading at $27.06 with a market capitalization of $11.6 billion. It had climbed to a 52-week high of $28.25 earlier this week. It had fallen to a 52-week low of $14.80 in March last year.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations and risk appetite. This article expresses my own opinions based on my own ...

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