Dropbox has something Microsoft wants — namely 300 million loyal users. That’s why the world’s leading productivity software company just struck a strategic partnership with the world’s leading file sync and share provider to make working with Dropbox and Office a seamless experience from both platforms.
That “seamless experience” already exists between Office and Microsoft One Drive, which has many of Dropbox’s capabilities. But it seems that Microsoft may be a little afraid that if working with Office and Dropbox together is too much of a hassle, users might choose some other productivity app, like Google Docs, for example, to create and edit content.
All for the Benefit of Users
Of course, neither company positions the relationship that way. Instead Dropbox CEO Drew Houston points out that Dropbox is home to over 35 billion Office documents, spreadsheets and presentations, and that integrating the two is how both companies best serve their users.
As a result of the partnership, Dropbox users can now both edit Office documents right from their Dropbox mobile apps, and access Dropbox from within their Office apps.
No other file sync and share service, save Microsoft’s own OneDrive, offers the same capability.
It is a clear, but probably not as a strategic, win for Dropbox; its customers’ lives (or at least those that use Office) just became a little easier.
For Microsoft it’s clearly both a bit of a sacrifice and a strategic win.
What’s the sacrifice? The Office users who might have switched from Dropbox to OneDrive for ease of use, no longer have a reason to do so.
The strategic win? Getting Dropbox users to stick with Office versus straying to an alternate productivity app. Like Google Docs.
How important is the latter? TechCrunch’s Alex Wilhelm suspects that some money may have changed hands in the deal, and, more specifically that Microsoft is paying Dropbox a chunk of change.
What Does This Mean?
So you may ask yourself, "What does this mean for the 100+ vendors in the Enterprise Sync and Share market?"
Tom Scearce, senior marketing manager at Novell’s Attachmate thinks it’s good news overall, pointing out that Gartner rates the EFSS market at $500 million right now. “It’s still early in the consumer-to-business crossover phase of this market, so the Microsoft-Dropbox partnership will help increase the profile of EFSS with business IT decision makers, the vast majority of whom have not defined and executed a real EFSS strategy,” he explained.
“But for some players in the market who have positioned themselves as “a secure Dropbox alternative” but operate primarily or completely in the public cloud, this news is not so good,” he added. “These Dropbox-but-not-Dropbox vendors will likely need to begin to specialize their offerings and pursue smaller segments of the overall market, and manage their investors’ expectations (which must now becoming more modest) as they go forward.”
While many of those we reached out to were taken by surprise and didn’t want to comment, those who did pointed out that their customers can access Office content on their iPads too, but given what Microsoft told us, it’s doubtful that the process is as seamless.
A spokesperson from Box spoke to the point, “We have a number of mobile integrations that allow Box users to open and edit Office content from iPads and iPhones, but no direct integration with Office on iOS yet.”
Similarly, Citrix provides a connector between Office 365 and its ShareFile app.
What Lies Ahead
Dropbox may not have the sole advantage for long.
That being said, there’s Microsoft CEO Satya Nadella’s pledge, to be everywhere his customers are, to consider. We’ve already seen him walk his talk with mobile phones. Many EFSS vendors think it’s only a matter of time before he does this with their solutions.
Bill Carovano, senior director of product marketing at Citrix, says, “We are very pleased that Microsoft is further opening up the Office365 platform for partners to embrace and extend. We look forward to working with Microsoft on deeper integration between Citrix ShareFile and Office365, which adds yet another tie to our 25 year partnership.”
Box, via a spokesperson echoed a similar sentiment, "Under Satya Nadella's leadership, Microsoft has shown a commitment to openness that will make it easier for an ecosystem of partners to drive innovation in the enterprise. We have a strong relationship with Microsoft and have worked with them across several initiatives, including our recently announced Box for Office 365 integrations, compatibility with Azure Active Directory, and our Box for Windows 8 app. We'll continue to find ways to collaborate with Microsoft and bring new experiences to our joint customers around the world.”
Other vendors scream danger where Dropbox in the Enterprise is concerned.
“This could be an enterprise IT professional’s worst nightmare,” said Jeetu Patel, general manager, Syncplicity Business Unit at EMC. “IT has fought the unauthorized use of consumer cloud services, and specifically Dropbox, for years. They are deploying Office365 on a massive scale, but we suspect, based on this announcement and what we hear in the field, that they are not seeing acceptable end-user engagement of OneDrive. At the same time, industry experts continue to suggest that Dropbox for Business is not ready for the enterprise, and this integration does not address any of the underlying issues.”
While Patel noted that he hasn’t seen the details of the integration, he warned that this could cause corporate IT to further lose control over “billions of office files” unintentionally. “I would expect that IT would need to think very carefully about deploying the integrated solution until they can confirm that the combination meets their security and compliance requirements,“ he added.
Daren Glenister, Intralinks’ Field CTO, called the Microsoft/Dropbox partnership "an integration only, which means that the fundamental security flaws in Dropbox are still there."
He cautioned that enterprises need to balance the need for greater employee productivity with the need to keep valuable company data safe, noting that “this is why we offer native support for Microsoft Office Online within Intralinks VIA, so users never leave the security of our platform but still enjoy easy access to their files. Files don’t need to be exported, making the experience seamless and safe.”
Paula Skokowski, chief marketing officer at Accellion agreed with Glenister’s sentiment, noting:
The partnership is a clever move for both companies. The combination of Microsoft and Dropbox solutions sounds appealing in terms of greater flexibility for editing, storing and sharing documents. However, enterprise organizations are heavy Microsoft users and security concerns about Dropbox has made it the poster child for rogue IT. With no security angle to this partnership, it’s not clear that this announcement moves the needle for Dropbox’s ambitions in the enterprise market.”
Scearce doesn’t think the partnership changes much for his company at all. “Novell and Attachmate have private cloud solutions like Filr, FileXpress, and the File Management Suite that are addressing these needs today for security-conscious organizations,” he said. And the Microsoft Dropbox EFSS partnership doesn’t offer the same functionalities.
But Damon Tompkins, Metavis’ chief marketing officer, sees it from a broader perspective, as his company doesn’t compete in the space, “The announcement only further demonstrates that all the kinetic energy around content is directed squarely towards the cloud,” he says. “Microsoft wisely continues to embrace the knowledge management ecosystem rather than attempt to contain it.”