Dropbox and iCloud: David vs Goliath?

Today I saw this article in Wired on Dropbox and found it very interesting based on the classic David vs Goliath comparison, where the small, innovative solution is pitted against the larger, more established solutions and vendors (Apple and their new iCloud offering). In this respect, the Dropbox vs. Apple story is similar to the Palo Alto Networks story of bringing new innovation to a very established market (firewall), against pretty tall odds, competing against large, established vendors.

Comparing the frequency of use and the percentage of file sharing (browser-/cloud-based) bandwidth consumed, we see that Dropbox crushes iCloud globally as well as across different geographic regions. To be fair, the iCloud App-ID was added in late October 2011, so the comparison, while valid, does not take into account newness of the application vs. the more established Dropbox offering. A more fair comparison will be to look at the usage and the bandwidth in October of 2012.

The other interesting datapoint to look at is the manner in which Dropbox has differentiated itself in what an be considered a very crowded market. Since 2008, the number of browser-based filesharing applications has more than tripled, growing from 22 to 71 now identified in Applipedia. The growth is attributed to two factors; the first being the new applications being released to the market and the second is new App-IDs being added to the database. Regardless of the reasons for the growth, this is a crowded market segment.

Between April 2011 and November 2011, 65 different browser-based (or cloud-based) filesharing applications were found. On average, 13 variants were found across 1,506 (92%) organizations. For some perspective on the number of application variants found, an average of 13 variants per organization is considered to be high; only two other application categories. photo-video (29 variants) and social networking (16 variants) had more application variants.

Based on the upcoming Application Usage and Risk Report, Dropbox is the most commonly used application in its category and it is the 2^nd most heavily used, based on the percentage of bandwidth it consumes. Cleary Dropbox is doing something right in terms of differentiating itself from others. From what I can see, it is easy to use, it is reliable, and is relatively secure. Again, some similarities between Dropbox and Palo Alto Networks exist – both companies solve a particular challenge and do so in a differentiated manner, in crowded and competitive markets.

See you in 2012.