DropBox Board gets Cozy with Condi Rice, Digital Matrix Loses Sleep

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Dropbox has been through several rounds of funding with its most recent valuation being $10 billion. The company has won debt funding worth $500 million in a campaign led by JP Morgan. Hiring, further acquisitions and selling to businesses are the major goals towards which this kitty will be channeled. In fact, Dropbox has been steadily expanding its services beyond online storage. Influencing how users consume data on service has become a major differentiator as shown by the series of acquisition including Carousel photo-sharing app, Mailbox for email and the integration of Dropbox into Yahoo! services.

Going up against highly capitalized alternatives such as iCloud, Google Drive and Microsoft OneDrive, Dropbox’s strength has been the promise of consistent service across multiple platforms. Where Google’s, Apple’s and Microsoft solutions encourage customers to stay on the same vendors platform, Dropbox has made data available to its customers despite the platform. It is expected that the cloud provider will release a desktop version by the end of 2014.

But of the 275 million customers making up the Dropbox user-base, just about 70,000 are paying corporate accounts. This has been one of Dropbox’s biggest challenges. A 2012 report by Citrix shows that Dropbox is one of the most blacklisted apps in corporate environments. The cloud storage service offers a Dropbox for Teams solution with 1 TB for up to 5 users. Having created its B2B solutions as far back as 2011, Dropbox still struggles to convince enterprise customers to hand over their sensitive data.

Its B2B solution now features several editions including audit logs, integration with MS Office, options for team projects and communication features. The offering has been rebranded to Dropbox for Business as the company goes for the BYOD market. Box already offers this features including fine-grained controls and enterprise features at lower prices than Dropbox.
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Recent changes to the Dropbox board suggest that the company has major expansion plans. One of this is the appointment of Sujay Jaswa, a long time Dropbox employee, as CFO pointing to the likelihood of an IPO in the near future. The new line-up also include former US Secretary of State, Dr. Condoleezza Rice. Dr. Rice’s consultancy firm RiceHadleyGates has been offering advise to Dropbox since last year. The consulting firm specializes in international strategy planning, specifically emerging markets. Its involvement with Dropbox might have been the reason for the unblocking of this cloud service in the Middle Kingdom. Furthermore, RiceHadleyGates has a favorable view of BRIC (Brazil, India, China) countries as well as the growth opportunities of Sub-Saharan Africa. As Dropbox expands, you may expect to see them create a stronger presence in this markets.

Dr. Rice’s appointment to Dropbox have been met with reservations due to her politics. Back in 2003, Dr. Rice approved the surveillance and wiretapping of the UN Security Council in the lead up to US’s aggressive action towards Iraq. Since news of pervasive state surveillance hit the internet, data privacy has been a major concern. And with Dropbox handling such vast amounts of customer data, the recent moral panic towards Rice’s appointment are somewhat justified. CEO Drew Houston has however come out to reassure customers by vowing to remain on the path of transparency and the fight against surveillance. According to Houston, Rice offers just the type of insights required to reach new users and defend those users rights.

A proposed boycott of Dropbox’s service – #dropdropbox – has sprung up on the internet complete with a list of alternative online storage providers. Outraged users have cited several instances where Dr. Rice was responsible for policies that led to unethical practices, and these are in no way few. In addressing the short-comings of data privacy, BusinessWeek quotes Rice saying: “As a country, we are having a great national conversation and debate about exactly how to manage privacy concerns. I look forward to helping Dropbox navigate it.”

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