Dropbox is starting to shatter perceptions that it can't make money.
At the Bloomberg Technology Conference in San Francisco this week, Dropbox co-founder and CEO Drew Houston told the crowd the file sync and share provider is bringing in more cash than it's spending.
Dropbox Nears Profitability
"Dropbox is cash flow positive. That's really important, especially in an environment like this, because it means you control your destiny," Houston said. "Instead of being funded by investors, you're funded by your customers."
Profitability seems to be on the horizon ... and so are signs of new maturity. Last month the company announced it was cutting back on employee perks, including its free shuttle in San Francisco and gym washing service. It is, however, keeping the five-foot $100,000 chrome panda statue displayed in the company lobby.
No one grows up overnight.
Is Dropbox's influx of cash coming mostly from consumers or the 150,000 companies that pay for Dropbox for Business? Hard to say. The company has yet to respond to our request for comment.
Either way, it's good news for enterprise file sync and share (EFSS) providers as well as enterprise content collaboration vendors, ECM vendors and whatever other labels similar companies are using these days. A rising tide lifts all boats, right?
But Then There's Box
Box, the Dropbox competitor the public seems to like more than Wall Street does, is still spending more than it is bringing in.
Cash flow from operations in the first quarter improved to negative $500,000, excluding a one-time litigation settlement. This represents an improvement of roughly $7 million year-over-year, Box CEO Aaron Levie explained during an earnings call earlier this month. Box claimed 62,000 total paying customers.
Chrome pandas aside, these are sobering times for Box as well.
The publicly traded company aims to be cash flow positive by the end of the fiscal year, Jan. 31, 2017.
For Levie and team, this presents more than a belt-tightening challenge. After all, Box executives have been unapologetic about their high spend on marketing and research and development, explaining that it's a must in order to win enterprises early on or lose them forever to better known and better capitalized vendors like Microsoft and Google.
Cloud Giants Want Biz Files, Too
It's not a bad argument. Companies like Microsoft and Google don't need to depend on file sharing or content management services alone for revenues. And Microsoft all but owns the document creation space via its Office, Office 365 and SharePoint product lines.
Not only that, Microsoft Vice President Jeff Teper, who took over management of the Office/SharePoint product line last summer, is also now aggressively going after the EFSS space with OneDrive for Business.
"We've played a bit of catch up with the niche file-sharing solutions. Now we're going to leapfrog them," he told Bloomberg News.
Teper might have been talking about the features and benefits of OneDrive. But market share was clearly on his mind, too: He offered companies currently using Box or Google Drive for Work free support during their transition to OneDrive for Business
Your Content, Google's Atmosphere
Google is going after the enterprise, too. So much so, in fact that Diane Greene, who heads up Google’s Cloud business and sits on the company's board, trekked all the way to Tokyo for Google's Atmosphere event this week. She was there to support the announcement of two new products aimed for at the Enterprise: Google Springboard and Google Sites. Both of these, ideally, leverage content stored in Google Drive for Work, its EFSS solution.
Egnyte Gets Excited
For the more than 75 startups, and their backers in the EFSS space these are good times. Egnyte CEO Vineet all but acknowledged it in a tweet:
Could be the turn for a lot of the private companies in our space... Exciting times! https://t.co/aG4FUxVPFk— Vineet Jain (@CloudNotEnough) June 14, 2016