The one problem with Dropbox’s $8 billion valuation: The service is too easy to leave

Once people are accustomed to storing their life in someone’s data center, moving it to another one is trivial.
Once people are accustomed to storing their life in someone’s data center, moving it to another one is trivial.
Image: AP Photo/Google
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Recently I ran out of space on the consumer-focused cloud storage service Dropbox, which as of this morning is reportedly valued at $8 billion. Dropbox has been (cleverly) backing up all my photos every time I connect my phone to my laptop, encouraging me to fill up my allotted gigabytes and get me to the point that I need to pay for more.

But Dropbox has a problem: Some very big competitors want its business. And they are willing to offer absolutely anyone even more free cloud storage space than Dropbox to lure them away. For example, while Dropbox only offers 2 gigabytes of free storage, which isn’t enough to store a single downloaded movie, much less the photo library of a life-logging phone photographer, Google offers users 15 gigabytes of free storage, or 100 gigabytes to those who buy a Chromebook.

Getting my library out of Dropbox and into Google Drive was as easy as installing Google Drive and dragging my photos folder from my Dropbox folder into Google Drive’s folder. In the background, Google slurped up all my data, and after I deleted the same files from Dropbox, I was back to my old way of working: using Dropbox as a remote, real-time backup for my critical work files. It’s safe to say I might never reach Dropbox’s storage cap as long as the only thing I’m storing there are my drafts and research.

But let’s say I run out of room for photos on Google Drive. There’s always Microsoft’s Sky Drive (7 more free gigabytes) and lesser-known cloud storage services like SugarSync (5 free gigabytes) and Bitcasa, which doesn’t have a free plan but will charge you $99 for unlimited cloud storage. All are services that work well and require just a few minutes of effort to port my data to.

This doesn’t mean Dropbox is doomed, or that the company isn’t worth $8 billion. The company could still live up to that valuation by getting its army of subscribers—200 million at last count—to sneak Dropbox into the workplace, which they’re doing already. At that point, the need to control and secure data could lock countless corporate IT managers into using Dropbox as their default cloud storage solution. And, as Microsoft’s ongoing strength in enterprise IT (despite weakness in consumer electronics) demonstrates, that’s a durable and lucrative business.