This past week Dropbox made its second acquisition of 2022 when it bought forms vendor FormSwift. A few weeks earlier, it bought Boxcryptor, as its name suggests, a security/encryption vendor. In 2021 it purchased DocSend, and in 2019, HelloSign, thus bringing its acquisitions to date tally to twenty-nine. That’s a lot of acquisitions, but they have all been tactical and, at first glance, well-timed and priced, and each, in turn, has layered value onto the core Dropbox platform offering.
In fact, since the early days of EFSS (enterprise file sync and share), Dropbox now has an extensive and impressive cloud-based document management system that makes it a solid and popular fit for small and medium-sized organizations. For tiny businesses and freelancers, it’s often the first choice. This latest deal, FormSwift, is one of the best deals it has closed to date. FormSwift offers a vast array of prebuilt, templated business forms, from W2 tax documents to non-disclosure agreements to leases. The forms, in the future, linked to the HelloSign digital signature functionality and DocuSend access controls bring a lot of potential value to its customers.
Dropbox has around 700 million users and nearly 18 million paid subscribers. The value of these practical services to Dropbox is clear; if folded in and bundled effectively, it should accelerate its paid subscription growth. I say if, as these more recent deals make sense on paper and in terms of functionality, it’s ultimately how Dropbox executes that matters. It could, for example, bundle more and more free functionality into its existing tier structure, or it could charge these new services as extras. We prefer it to bundle the same way Box has been doing these past couple of years. But that is not our decision to make. On the topic of Box, one of the most commonly asked questions we get asked is what is the difference between Box and Dropbox or, to put it another way, which is the better option. Our response over the years has remained consistent; neither is better than the other; rather, they are different. Box focuses more on enterprise sales and needs; Dropbox focuses more on the mid and small markets. And just as importantly, both are doing well. Long gone are their startup years; both Box and Dropbox are now well-established and highly respected companies in the broad Information & Automation Management sector. And two firms we continue to watch with interest as they continue to evolve.
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