Dropbox Is Struggling and Competitors Are Catching Up

Dropbox made itself a household name by giving away cloud storage. The eight-year-old company, valued at $10 billion, had 300 million registered users a year ago; now it’s got 400 million. Its two-year-old effort to make money from business users has been less impressive. While Dropbox led the $904 million global market for business file-sharing last year with about a 24 percent share, No. 2 Box and No. 3 Microsoft each took about 21 percent and doubled their slice of the pie, growing almost twice as fast, according to researcher IDC.

Dropbox’s paid business version lets users distinguish between personal and business documents and gives IT staff more control over the latter. But the company has been slow to add the level of security now common in office cloud software; Chief Executive Officer Drew Houston acknowledges that Dropbox has yet to figure out some basic elements of its sales strategy, including whether to focus on direct sales or partnerships. “We’re trying a lot of different things,” he says.