Dropbox’ Greatest Threat Is NOT Apple.

I read a post on PandoDaily written by Farhad Manjoo.  In it, he outlined his fear for dropbox in surviving as a sustainable business.

In summary, he stated two things:

  1. Backing up files is getting outdated, and backing up the state of a computer is where ‘backupus’ are heading. Although he agreed that, technically, dropbox might be able to execute on that (backing the state of the computer), he suggested, dropbox would not have permission or blessing of Apple to do that on their computers. And since Apple now has a huge portion of the personal computing, they in essence will be their obstacle to victory.

  2. Storage is becoming a commodity. Therefore, in the near future, people will not be willing to pay a premium for storage as they are doing presently for dropbox

I think Farhad may have misjudged the future on which his premise is based. He has imagined a future where most computing will be done on the OS’ we grew up with (Windows, Mac, Linux) and the ones we are growing with (iOS, Android, BB).

In my post highlighting the forked up state of the Android ecosystem, I ended by saying that Chrome OS was Google’s backup because, the open web is OS of the future.  Mozilla is already positioning themselves for that inevitability.

Based on that postulation, I’ll say the web is Dropbox’ main competitor. Most of my computing  and I bet Farhad’s is done on the Web. Communication, i.e email, social (FB and co) and IMs (except Skype) all have their web equivalents which keep the state of our systems. Media consumption is obviously ending up in the cloud. It will be no magic to pause a song on your desktop and continue on your mobile phone. More complex applications will certainly move on in that direction too.

So (how) will Dropbox survive?

One of Dropbox’ biggest risks is its very low switching cost. All I need to do to to switch is this: Ctrl C then Ctrl V and BAM!!, I have left Dropbox behind.

Drew is a smart chap and I am sure he know this and will be positioning Dropbox as the backup for “your Internet”. So while Flickr, SoundCloud, Google Docs provide the service and their states, Dropbox acts as a backup. So when the Feds swoop down on any of these services, mega damage will not be done and  you will not be left wailing. That is assuming Dropbox will not be swooped upon.

Like Farhad rightly said, the cost of storage is plummeting therefore, Dropbox will no longer have the freedom to charge premium for their service. But that should not be a problem since the low cost of storage will mean their costs will come down too.

Dropbox can also start charging a little for things you can do with your data like the ability to search through “your Internet”.

Yes, Greplin is a feature


PS: I am eternally grateful to dropbox and you should download it using this very link 😉