Dropbox has half a billion users, but it needs more paying businesses

The company's new user numbers raise more questions than they answer

Dropbox has long been an incredibly popular choice for cloud file storage and sync, and the company announced Monday it hit an important milestone: It has 500 million registered users. 

That number leaves out a lot of information. It's unclear whether Dropbox has 500 million unique people registered to use its service, or if it has 500 million registered accounts, with some people using multiple accounts. The company also didn't say how many of those accounts are active. 

Dropbox also said that it has 150,000 businesses paying for its product -- which is the same figure it unveiled at a conference in November. In Monday's announcement, the firm said it adds 25,000 paying business customers each quarter, meaning it now should have upwards of 175,000 paying customers. 

That last figure is particularly important because Dropbox's business relies on convincing companies to use its services for their internal file storage and collaboration needs.

Dropbox said it is already used inside 8 million businesses -- in many cases, without being approved by IT -- but the actual percentage of businesses paying for the privilege of using the service is much smaller. 

Dropbox's pitch to IT managers is simple: CIOs can be heroes to their users by allowing them to use the same tools they're already comfortable with on their home computers. At the same time, paying for Dropbox Business or Enterprise will give companies the ability to manage what their employees are doing.

The company has made headway picking up customers, especially among small teams. It also has some big names using its product, including News Corp., Intuit and Expedia. But it's facing a ton of pressure from competitors, including Microsoft, Google and Box.

Dropbox has added a lot of enterprise-focused talent to its team, including Microsoft veteran Thomas Hansen, meaning that customers are likely to see additional improvements aimed at making the startup's product more interesting to enterprises. It remains to be seen whether that will translate to customer gains, however.

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Blair Hanley Frank

IDG News Service
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