Dropbox Question 3 － Distribution deals

[quote="benjituf"]

pierrelin wrote:

albertcotraviwat wrote:I wouldn't be surprised to see Dropbox preloaded in future renditions of smartphones much in the vein of how Apple preloaded Twitter in its phones.

In late October, HTC announced on facebook that their future mobiles will be offering a 5gb storage on Dropbox for the android users. It woul be a win-win situation for Dropbox and HTC. It could first seduced more new customers and push the latter and existing dropbox customers towards buying an HTC phone.

Here we check some storage plan for iCloud & Dropbox

iCloud Dropbox
5GB/Free (iOS 5) 2GB/Free (with invitation bonus up to 8GB for Free)
10GB/$20 50GB/$99
20GB/$40 100GB/$199
50GB/$100

Obviously, there's not huge difference about the C/P value. Dropbox has lower initial free space but would exceed iCloud after a few successful invitations.
Moreover, iCloud is just free for devices with iOS 5 & OS X Lion only.

Dropbox should absolutely seek new distribution deals with 3rd party companies to have Dropbox preinstalled on smartphones and operating systems. It cannot count solely on word of mouth to maintain its momentum. One of the great advantages of Dropbox is its compatibility across different operating systems, so it would not require its great efforts to push Dropbox on Apple iOS and Android. The latter is showing phenomenal growth, but its owner Google may feel that it could push its own cloud storage service which has not yet been launched. Aside from handset OS's, Dropbox can strike alliances with web-browsers and have it preinstalled on Firefox (which has similar deals with skype) and Chrome (again a google program).

Consumers absolutely loathe bloatware on their newly purchased devices and will choose to opt out when they have the chance. However if they have heard good things about Dropbox from their friends and family, having the program preinstalled on their devices will be a major convenience. The company can also look to tap into the social interwebs and gain greater exposure after a celebrity endorses the product, in much the same way that they use Twitter and Facebook. This can capture a lot of the student market which can use the program to collaborate on group projects in a more effective manner. My spreading the seed in the younger generation, users will carry their experiences along with them when they enter the workforce and it becomes an absolute necessity in worklife.

[quote="pierrelin"]

albertcotraviwat wrote:I wouldn't be surprised to see Dropbox preloaded in future renditions of smartphones much in the vein of how Apple preloaded Twitter in its phones.

In late October, HTC announced on facebook that their future mobiles will be offering a 5gb storage on Dropbox for the android users. It woul be a win-win situation for Dropbox and HTC. It could first seduced more new customers and push the latter and existing dropbox customers towards buying an HTC phone.

albertcotraviwat wrote:By having Dropbox already conveniently installed on your purchased smartphone, users don’t have to make that complicated decision of deciding which platform to download and install for cloud-based, online storage services. Users now can enjoy the functionality and simplicity of Dropbox at the touch of a button, encouraging referrals and positive word of mouth marketing based on its reliability and ease of use.

Financially this partnership would make sense for both parties involved. From Dropboxe’s perspective, this increased user base could potentially lead to higher revenues as loyal customers upgrade to the higher storage premium accounts. As a mobile phone manufacturer, increased product differentiation and value-added software could tip the scale in their favor in a highly competitive and mature market. All and all, I would highly recommend Dropbox to partner up with a leading smartphone manufacturer like Apple, HTC or Samsung.

How weird that my posts just magically disappeared... anyway, I agree with Albert in that Dropbox ought to work with smartphone companies to come preinstalled in many of the new phones. To address Ally's concern regarding compensation for partners, I'm not so sure potential partners will require any more compensation from Dropbox as they already offer a rather large userbase. The pervasiveness of Dropbox because of its alluring freemium strategy has allowed its userbase to grow, and with this pervasiveness we're seeing more and more mobile applications out there including Dropbox as a built in file explorer amongst other options. I wouldn't be surprised to see Dropbox preloaded in future renditions of smartphones much in the vein of how Apple preloaded Twitter in its phones. I also remember "Apple wanted to acquire Dropbox" a while back, but it didn't fall through. This could be indicative of their desire to assimilate Dropbox's core functionality into their product offering.

For the clarification, it is indeed meant for partnering with other companies. This might imply websites, software or hardware producers. The words of mouth tactics targeted mainly root planting in the market. Furthermore, The question intended to discuss the possibilities Dropbox might have for their future development as company.

Very interesting ideas and suggestions from the participants. I personally like the idea of incorporating with smart-phones. We can see this tactic was already used in HTC, where one smartphone has an independent button for Facebook. With one click and you are in your profile.

Moreover, Dropbox might benefit from partnership with some operation system producers. In which way this could be beneficial for both parties?

DennisProesch wrote:I also think dropbox should establish relationships with other online services. An example could be a cooperation with big email providers and allowing the storage of files received in the dropbox directly and also making the sending of files placed in the dropbox more convenient and easier.

I agree with Dennis. I use Dropbox as well and it has many benefits, however I still think the storing and sending of files could be done easier and also more convenient. I think a relationship with an e-mail provider could support this.

Mathilde Menard wrote:
I am also thinking about Skype. Skype already allows to send files and also allows to call many people at the same time, however it does not have a special place to put files in common and it already happened that during a group work on skype we modified something in the dropbox. I think both services could be very compatible.

I like this idea, dropbox should try to make the most of its cloud computing offer by making it even more collaborative. What you are talking about already exists through Google+. Indeed, when doing a hangout, which is basically the same as a Gtalk with video or even skype call, it enables to share your screen and also to work simultaneously on a google document. It's awesome since it really is cloud computing, that's not only storage but also a new working platform where people can hang out and interact with each other, basically like in the real world at work!

Then, I think one of the main reasons why dropbox should try to create new distribution deals is because of its core offering: it is a support platform, you use dropbox because you are using something else. That is why dropbox success depends on its key partners. The word to a friend was a great way to penetrate the market and build a strong customer base, and as they are growing, they should now try to deal with the other big trend on the Internet: social. As I said, it's already built-in on google+, Microsoft just bought skype and Facebook will definitely benefit from this acquisition (since Microsoft has participation in Facebook), why not considering an acquisition of dropbox by Microsoft or even Facebook itself to compete against Google and generate technological synergies through the two companies.

A clarification: "Distribution deals" means customers' word-of-mouth referrals or partnerships with other websites?

I agree that Dropbox should attempt to create new distribution deals with other parties, but it can still use the word-of-mouth method. For eg., as Mathilde mentioned, Dropbox could use facebook as its partner, try to add some functions such as “choose some files from this folder and share them with friends on your facebook”, which can be shown in the left part of the folder, and then share some revenue with FB.
Besides, it could use a third party method, but keep one thing in mind, don’t bother the users.

I think it's a good time for Dropbox to pick up where they left off with the distribution deals. With their established brand, the partners would probably treat them seriously now and stop asking unreasonable customization.

I totally agree with Albert that having Dropbox pre-installed can overcome the mentality that non-tech savvy users just don't want to go over the trouble to understand the value of Dropbox to them. However, I think it's worth thinking about how to structure the deal that is mutually beneficial for Dropbox and partners. If Dropbox has to compensate the partners to have it pre-installed, then the customer acquisition costs would just rise again. I was thinking about giving users that come from the partners special offers, such as an increase in space(ex.4GB) than normal free signed-up users(2GB), (of course the users who already used Dropbox can get extra free spaces) Or, a free 60-day trial of their Dropbox for team, and premium discount after the trial end. These kind of offers might help differentiate the partner's product even more on the market, and eventually benefit Dropbox to have a better partnership deal.

Yes. I think Dropbox can create distribution deals with other parties in many different ways.
First, I think Dropbox can coorperate with social networking site and web application. Since people can generate content (like photos)on the social networking site.
Now I give an example: I am interesting in the photos posted by my friends and I want to download them for the future use. I need to click every photos and download them one by one. Instead of doing this, I have an suggestion, I can just notify my friends by putting them in my dropbox via the social working site.
The example I just described is a interesting way to use dropbox and many people tend to save the online content to dropbox. Many people may tend to pay for Dropbox!

As mentioned in the case, Dropbox faces a big barrier in terms of adoption rate because of its “perceived” value. While many users are aware of its functionality and end-to-end benefits, non-tech savvy consumers who are required to download and install the client software may be hesitant and reluctant to find the need to do so having the mentality that “you’re happy when you have it, but if you don’t, life goes on”.

With many of us being “creatures of habit”, some users prefer to stick with the archaic method of carrying around USB sticks or lugging around external hard drives. For many of these users, Dropbox’s synching value might not seem attractive as they might prefer the security of being in charge of their own important files (instead of it being stored somewhere on a server). To convince these users to make the switch, Dropbox could invest more in guerrilla marketing and thus increase their acquisition costs, or partner up with a mobile phone manufacturer and pre-install the software onto the mobile device, adopting the “Trojan Horse” tactic.

By having Dropbox already conveniently installed on your purchased smartphone, users don’t have to make that complicated decision of deciding which platform to download and install for cloud-based, online storage services. Users now can enjoy the functionality and simplicity of Dropbox at the touch of a button, encouraging referrals and positive word of mouth marketing based on its reliability and ease of use.

Financially this partnership would make sense for both parties involved. From Dropboxe’s perspective, this increased user base could potentially lead to higher revenues as loyal customers upgrade to the higher storage premium accounts. As a mobile phone manufacturer, increased product differentiation and value-added software could tip the scale in their favor in a highly competitive and mature market. All and all, I would highly recommend Dropbox to partner up with a leading smartphone manufacturer like Apple, HTC or Samsung.

I also think dropbox should establish relationships with other online services. An example could be a cooperation with big email providers and allowing the storage of files received in the dropbox directly and also making the sending of files placed in the dropbox more convenient and easier.

Yes, Dropbox should create distribution deals with other parties. Indeed, it already has strong competitors, for instance Google with Google docs and Picasa, which are much more likely to be used since it is in the Google package. Without partnerships, I guess Dropbox could die.

It could be integrated into a social network such as facebook, but the problem is it would also have the competition of the classic facebook tools, allowing to publish pictures. However there may be something to do with the sharing of other types of files, which is not very developed yet on facebook.

I am also thinking about Skype. Skype already allows to send files and also allows to call many people at the same time, however it does not have a special place to put files in common and it already happened that during a group work on skype we modified something in the dropbox. I think both services could be very compatible.

Anyway, partnerships are positive for both tools. For Dropbox they can increase the number of customers (and probably the number of paying customers if they are constantly sollicited by the partners to use Dropbox), and for the partner they increase the scope of its services. We should also consider that for every partner Dropbox does not have, this potential partner is likely to make a deal with a competitor or to develop its own competiting tool.

Greeting folks,

Dropbox has increased the number of it's users using Friend-to-friend suggestion method. In order to increase the company's revenues and further more (paying) users, should Dropbox attempt to create new distribution deals with other parties? If yes, who would be good partners and what should the outlines of the deals be?

Cheers,