Dropbox Challenges Google and Microsoft with Spaces

by Jim Lundy

The race to the next generation digital workplace is on and last week Dropbox staked its claim. With the announcement of Dropbox Spaces, Dropbox is no longer just a cloud content management offering. In fact, it’s now offering a digital work hub—our term for workspaces. This blog discusses Dropbox’s announcement and the impact on the market.

The Dropbox Pivot

In market terms, what Dropbox did last week is called a pivot—a shift to a new differentiated category. Dropbox Founder and CEO Drew Houston did a great job of telling this new story at DropboxWIP, its first significant customer event.

Storing and sharing content is always important but integrated work hubs are the future. Dropbox Spaces represents a newer, simpler way to work. Spaces allows people to manage their work that is done across multiple applications, including Google Docs, Sheets, and Slides.

Image Analytics Makes Spaces Smarter

Unlike others in the content management field who are white labeling their AI offering, Dropbox built up its own AI team that it calls DBXi. The team at Dropbox has been quietly blogging about some of their work over the last year. At DropboxWIP, they unleashed their new image analytics offering that will save people tons of time searching for— and finding the right image for—a presentation or other work effort. We would note that most of the other content management providers have yet to offer an integrated image analytics offering that is part of their digital work hub.

 

.@dropbox introduces Image Analytics- a game changer in the Digital Workplace. #dropboxWIP pic.twitter.com/p0iPHSj03V

— Jim Lundy (@JimLundy) September 25, 2019

Dropbox and HelloSign: An alternative to DocuSign

At DropboxWIP, Dropbox also highlighted its recent $230 Million HelloSign acquisition. HelloSign COO Whitney Bouck was onstage telling the story and giving some great examples of HelloSign in action. Our take: with the tremendous growth of the DTM and workflow and content automation categories, HelloSign should be a growth engine for Dropbox. With Dropbox’s large install base, it makes it a no brainer to offer HelloSign—and this becomes a challenge for others, such as DocuSign, which has seen significant revenue growth due the need to eliminate paper transactions.

Challenging Google and Microsoft

The Dropbox pivot to Spaces will challenge the incumbent productivity suite providers, which includes Google and Microsoft. The challenge for Google and Microsoft is that they have many applications bundled into a suite. Spaces is content-focused and will face off against Google Drive and Microsoft OneDrive, but we think that the battle ground will also be in team collaboration, where Microsoft Teams and Google Hangouts Chat have a lead.

Bottom Line

Aragon estimates it will still take about five years before team collaboration offerings overtake email, but the battle has already begun. There will be many different approaches to digital work hubs, but it is clear that Dropbox just staked its claim and it has put Google, Microsoft, and others on notice.