Can Consumer Cloud Storage Apps Survive A Market Downturn?

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With enterprise cloud storage providers dominating the market, services like Dropbox and Box will need to add services and features to compete.

The world of consumer cloud storage has not grown at the rate of enterprise cloud, and due to this we have seen pressure from investors and directors to enter new markets and find ways to improve profitability and revenue growth. 

Outside of the Big three in enterprise cloud – Amazon, Microsoft, and Google – the ability to raise capital to acquire adjacent software services may not exist in the current market environment. Gone are the days of low-interest loans and heavy capital investment, now Dropbox, Box, and others are forced to focus on profitability and returns. 

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In this environment, we may see further consolidation of the consumer cloud storage industry. Amazon, Microsoft, Google and Apple (with iCloud) can most likely continue to provide storage to individuals for an eternity, the Big three from their enterprise income and Apple because of the value of iCloud in keeping users locked into the iOS ecosystem, but for solo-consumer storage solutions like Dropbox and Box, the next few years will be a challenge. 

Dropbox and Box have both struggled on the public market in the past few years. What should have been a home run for both during the coronavirus pandemic was not, with middling revenue growth and a lack of profitability to boot. 

Dropbox and Box are also two of the more highly-used and well-financed storage solutions as well. There are smaller services that offer even better deals for customers, such as pCloud and IceDrive which both offer “lifetime” terabyte storage for a couple of hundred dollars. In a market where costs are increasing rapidly and customers are looking to cut costs, the doors for them might be closing. 

One of the key issues for Dropbox and Box is that the services they have acquired, which have included document signage, file sending, and email services, have not translated to meaningful market share in the respective sectors. For most users, these apps are used for one thing and one thing only: file storage. 

Compare that to enterprise cloud solutions, and it starts to become clear why one market is worth $25 billion and the other is worth more than $150 billion. AWS, Azure, and Google Cloud offer much more to businesses on top of storage and compute, which enables them to generate more income.

Google and Microsoft are attempting to build their consumer storage solutions in a similar fashion. Google Drive connects to Google Photos, Google G-Suite, and Gmail. Microsoft offers similar file saving services across its app portfolio. 

Apple might be the king of this, by binding iCloud to every possible storage opportunity on the iPhone. It ensures that overtime users will come to rely on the storage solution and be more willing to part ways with a couple of dollars each month to keep everything safe in the cloud. 

The added value is the key for these consumer storage solutions surviving long-term. There has been an uptick in VPN services, such as ExpressVPN and NordVPN, offering cloud storage as a complimentary service alongside its VPN subscription. 

Dropbox, Box and other cloud storage services are not at death’s door yet, but it will be difficult for them to remain relevant as operators like Google and Apple add more value through their control of Android and iOS, respectively. Amazon has also stumbled in consumer cloud with Drive closing in 2023, but we suspect it will have something up its sleeve in the next few years to compete.

David Curry

About David Curry

David is a technology writer with several years experience covering all aspects of IoT, from technology to networks to security.

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