Freemium Pricing at Dropbox
Dropbox provided remote-storage over the internet, also known as cloud storage, of any type of computer file. The name of the company came from the idea that their cloud storage service would allow users to drop files into a folder that could be accessed anywhere using the internet. This enabled file sharing, synchronization and backup. In six years, Dropbox had grown into a business with 200 million users saving more than a billion files per day, outpacing internet giants such as Amazon, Google, and Microsoft. Using a freemium pricing strategy whereby a basic service was free- of-charge and premium services were paid, Dropbox’s user base was still growing quickly. But only an estimated 1.6 to 4.0% of its users provided any revenue to the company. Going forward, could Dropbox, an internet company with only a few hundred employees and one product offered to businesses and consumers, compete in the cloud storage space? If so, how? And should Dropbox continue with its freemium pricing or not?
1. Describe Dropbox’s “Freemium Pricing strategy” to get users and revenue. What was this strategy? What did the company hope to accomplish with this strategy?
2. What were the positive results of this strategy?
3. What were the negative results or failures of this strategy, if any?
4. What was the strategy that Dropbox used for corporate/business customers? Describe this strategy and its results.
5. What other strategies can you think of that Dropbox could have chosen, instead of Freemium Pricing?
Further, the Dropbox also partnership with the Salesforce, that provided the IT departments of many enterprises, to set different rules through their management tools (Re/code). The organization also joined hand with Microsoft to make the office apps available on the phones and tablets so as to make the sharing process easier (News.microsoft.com).5. Apart from “Freemium Pricing Model”, the DropBox can also utilize:
Eisemann, Thomas R. 'Dropbox, It Just Works'. iknowbase.com. N.p., 2012. Web. 3 Feb. 2015.
Gannes, Liz. 'Case Studies In Freemium: Pandora, Dropbox, Evernote, Automattic And Mailchimp'. Gigaom.com. N.p., 2010. Web. 3 Feb. 2015.
Gobry, Pascal-Emmanuel. 'EXPLAINER: What Is The Freemium Business Model?'. Business Insider. N.p., 2011. Web. 3 Feb. 2015.
News.microsoft.com,. 'Microsoft And Dropbox Announce Strategic Partnership To Give People More Freedom In How They Work | News Center'. N.p., 2014. Web. 3 Feb. 2015.
Re/code,. 'Dropbox Zeros In On An Enterprise Strategy'. N.p., 2014. Web. 3 Feb. 2015.
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