Dropbox got a huge financial lift last week with reports it had received approximately $250 million in new funds. re/code speculated it could actually end up being as much as $400 million. Whatever it was, it was a big number.
The Wall Street Journal appears to be the first publication to have broken this story (requires log in). re/code reported there could be additional money coming from other sources, possibly a couple of mutual funds, which could drive the overall amount even further.
These reports said the funding was on top of the $250 million the company received in 2011 and the company valuation was set at a hefty $10 billion, up from $8 billion in 2011. It certainly proved the power of cloud companies to attract big money, and could set the stage for an IPO at some point.
Last year Dropbox made several nods to business when it rebranded Dropbox for Teams as dropbox for business. It also beefed up the security controls, but they remain for now rudimentary at best. Later in the year, it enhanced the Dropbox APIs making it possible to program Dropbox functionality outside of the Dropbox service.
Larry Hawes, principle at Dow Brook Consulting, told me at the time that he considered that a significant move shifting Dropbox from a commodity sync and share application to a full-fledged business platform, but Hawes warned at the time that Dropbox still had a long way to go to win over a skeptical IT department, that still perceived it--for the most part--as a nuisance.
"Dropbox has such a bad reputation with IT that it will take a massive effort to change the existing perception that it is not an enterprise-ready service, even if it is. Especially in terms of security and privacy," he told me at the time.
But in spite of Dropbox's entree into the business side of the equation and these nods to business, it remains for now, for the most part, very much a consumer tool with a limited functionality. It does sync and share very well, but that's really all it does. I'm a Dropbox user and I see the power of it all the time, from the ability to get my files on any device, any time, to the way it becomes a drive in your file manager, whether in Windows or Mac.
It's a highly useful tool, and while it might not have a great business reputation, it has millions of users, many of whom are using Dropbox at work with or without permission from IT. That means there is a huge potential business customer base that could be flipped to business users if Dropbox can find a way to enhance its security and administrative controls beyond the basics it started with last year.
One thing Dropbox has done is convince its financial backers that it has tremendous potential to earn big money down the road. To do that though, it has to move beyond the consumer commodity features and try to figure out a way to get the more lucrative business customers. It seems clear Wall Street is betting it can.
For more information:
- see the TechCrunch article
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