Dropbox Inc

Dropbox Inc was founded in 2007 by two MIT students - Drew Houston and Arash Ferdowsi. By March 23, 2018, Dropbox has 500 million users. 11 million of them use paid service functions.

History

2024:20% staff cut due to lack of money

On October 30, 2024, the Dropbox cloud service announced a restructuring, during which the number of personnel will decrease by 20%. This measure is aimed at strengthening the market position and accelerating growth in the main product categories.

Dropbox CEO Drew Houston announced the changes. According to him, the company is in a transitional stage. The FSS (File Sync and Share) business has grown stronger, but the resulting macroeconomic situation provokes a weakening of demand. In addition, Dropbox's organizational structure has become "too complex," and redundant levels of management impair operational efficiency. Therefore, the need for transformation is ripe.

𝓲

Freepik

The changes we are making today, while difficult, come at a turning point where the market is accelerating in exactly the areas we have bet on. I'm proud of the progress we've made over the last couple of years, but in some areas we still haven't hit the numbers we want. Therefore, we form a simpler and more efficient team structure as a whole. As CEO, I take full responsibility for this decision and I am truly sorry for those affected by the changes, "says Houston.

Dropbox had approximately 2,700 global employees as of the end of 2023. 528 people will fall under the reduction. Workers who are laid off will receive comprehensive support and cash compensation, including bonuses and salaries for 16 weeks with one additional week of payment for each completed year of work at the company. Reduced employees will be able to keep corporate devices (smartphones, tablets, laptops and peripheral equipment) for personal use.^[1]

2023

A fine of 2 million rubles for refusing to remove prohibited content

On July 11, 2023, the 422nd section of the Tagansky District Magistrate's Court fined Dropbox for refusing to delete information prohibited from Russia (part 2 of article 13.41 of the Administrative Code of the Russian Federation). We are talking about the failure to delete FBK files (recognized as a terrorist organization on the territory of the Russian Federation) with a folder containing, as considered in court, inaccurate information about the progress of a special military operation and the death of civilians.

Appoint Dropbox International Unlimited Company punishment in the form of an administrative fine in the amount of 2 million rubles, - announced the decision of the magistrate of the judicial district No. 422 of the Tagansky district of Moscow Timur Vakhrameev.

Data storage service Dropbox will pay millions of rubles for refusing to delete prohibited content

As Vedomosti writes with reference to court materials, Roskomnadzor has repeatedly notified the American company about the detected offense. Dropbox representatives did not appear in court, the newspaper indicates.

Dropbox's administrative offense protocol entered Moscow World Judicial District No. 422 at the end of June 2023. The company faced a maximum fine of 4 million rubles. According to the protocol, the information was aimed at destabilizing the political situation in Russia, and also contained inaccurate information about the conduct of the SVO in Ukraine, adds TASS.

According to Interfax on July 11, 2023, over the past years, the largest Internet services - Google, Telegram, Facebook (an information resource of the Meta organization banned in the Russian Federation), Twitter, TikTok, the Wikimedia Foundation, etc. - have been repeatedly prosecuted in Russia for non-removal of prohibited content.^[2]

Reduction of 16% of employees

On April 27, 2023, Dropbox, which owns the cloud platform of the same name, announced the reduction of approximately 500 employees, which is about 16% of the total headcount.

Dropbox is cutting 16% of the state due to the advent of the AI era
Photo: builtinseattle.com

Dropbox CEO Drew Houston announced the reorganization. According to him, the difficult economic situation put pressure on the company's customers, and therefore on Dropbox's activities. And therefore, some areas of business that used to give a positive return "ceased to be stable."

In addition, as Houston noted, the era of artificial intelligence has come. On the one hand, this opens up great prospects, but, on the other, requires prompt decision-making to maintain competitiveness. The Dropbox chief says that in some areas, investments that were promising before the economic downturn began to have more limited potential. Therefore, it took a change in the structure of employees to free up resources for future growth.

"In an ideal world, we would just move people from one team to another. And we did it wherever we could. However, our next stage of growth requires a different skill set, particularly in artificial intelligence and early-stage product development. Over the past couple of years, we have attracted talented specialists in these areas, and we will need even more, "said Houston.

Dismissed employees will receive compensation in the form of salary for 16 weeks plus for one additional week for each full year of work. They will receive assistance in employment in a new place. In addition, reduced workers will be able to leave for personal use corporate gadgets - laptops, tablets, smartphones and other devices.^[3]

2021

Purchase of DocSend secure document exchange platform

In early March 2021, Dropbox announced the acquisition of the DocSend secure document exchange platform. The deal is valued at $165 million. Read more here.

Reduction of 11% of the state

In mid-January 2021, Dropbox said it was cutting its global workforce by about 11%. The cuts will affect 315 people who were notified of this by the end of the working day on January 13, 2021.

The decisions we make are painful, but necessary, Dropbox CEO Drew Houston said in a memo to employees.

Dropbox CEO Drew Houston

Dropbox pledged to keep jobs safe through the end of 2020, but Houston said it was already "becoming clear - we need change to create a healthy and prosperous business in the future."

The company said the job cuts will help the company focus on priority areas in 2021, which include developing Dropbox's core operations, investing in new products and improving the quality of work.

Earlier, Dropbox switched to a new remote work policy, which will be in effect even after the end of the COVID-19 pandemic. For employees who need to meet or work together in person, the company said it will open dedicated Dropbox Studios workspaces in San Francisco, Seattle, Austin, Texas and Dublin when it is safe to do so. The rest of the time, employees can work from home. The company employs 2,851 people, Fortune reported.

Our latest decisions to create a new leadership structure and remote work policy have set us on the right track, and we now need to make sure that our team's work and the direction of our investments are aligned as well. For example, our Virtual First policy means that we need fewer resources to support the office environment, so we are reducing those spaces and reallocating the resources we have freed up to realize new ambitions, "Houston said.[4]

2020: Dropbox allows employees to stay remote forever

In mid-October 2020, Dropbox announced that it would allow all employees to constantly work from home. The company plans to convert existing offices into co-working spaces that will be used for meetings and meetings.

The company announced it would allow all employees to work remotely, as an internal survey found that nearly 90% of Dropbox employees are more productive at home.

From today, Dropbox becomes a company whose employees can work in a virtual space, the company said in a statement. - Remote work will become the main mode for all employees and will be used by default to solve individual tasks.

Dropbox has allowed its employees to stay remote forever, the company's offices have been converted into meeting and meeting places

Dropbox initially let employees go home in March to prevent the spread of COVID-19. However, the temporary solution eventually became permanent. The company will turn existing properties into flexible working space co-working spaces called Dropbox Studios, where employees can work at will. These spaces are designed primarily for teamwork and building employee relationships. Dropbox already has offices in San Francisco, Seattle, Dublin and Austin, but said it could create a new type of co-working studio in other regions as well.

The company also allowed employees to travel outside the cities where its offices are located. And so that employees living in different time zones can work together as a team, the company will allow everyone to determine their own working hours. As such, Dropbox has joined other big companies, Twitter and Atlassian, which have allowed all employees to constantly work from home. In turn, Microsoft and Facebook said they would allow some employees to stay remote forever.^[5]

2018

4x loss growth despite audience increase

In 2018, Dropbox's revenue amounted to $1.39 billion, an increase of 26% compared to the previous year. At the same time, net losses increased more than four times - to $484.9 million from $111.7 million in 2017.

By the end of 2018, Dropbox's audience reached 12.7 million subscribers who use the paid functions of the cloud storage service. A year earlier, the number of users was 11 million people.

Dropbox financials

The company's average revenue per paid user (ARPU) in 2018 was $117.64, up from $111.91 a year ago. ARPU's revenue rose due to the fact that private users and corporate customers switched to new tariff plans, providing more free space in the service at increased prices.

Our healthy revenue growth and free cash flow generation reflect our strong business model. Our product and integration updates, such as Dropbox Extensions, put Dropbox at the center of our users' workflows and helped us end the year with more than 400,000 corporate customers, said Dropbox co-founder and CEO Drew Houston[6]

As of the end of December 2018, the total number of users registered with Dropbox exceeds 500 million, 80% of them use the service to work, and the total amount of stored content in Dropbox was more than 1 Ebyte (1 000 000 000 GB). A vast ecosystem of 500 thousand registered developers has been created around Dropbox.

On the day of the financial statements, Dropbox shares fell 11% as the company announced a weak forecast for operating margin, which upset investors, despite growing revenue and audience.

Going public

On March 23, 2018, Dropbox went public. This IPO in the technology industry was the largest in a year and turned out to be more than successful for a company developing a storage service of the same name.

Dropbox securities are listed on the Nasdaq floor under the ticker symbol DBX. The company began selling shares at a price of $21 (a few days earlier it was said about the range of $18-20), valuing its market capitalization at $9.18 billion. This is slightly less than the $10 billion estimate given by private investors in 2014.

Dropbox shares jump 50% after offering

By the opening of the exchange, Dropbox shares began to cost $29 and in a few hours they rose in price by 50%, reaching $31.6. At the end of the main trading on the first day, the company's securities were worth $28.48, which is 35% more than at the opening of the Nasdaq. During electronic trading, the price increased by another 1.12% to $28.8.

The IPO amounted to $756 million, Dropbox sold shares for more than $560 million, securities for another $193 million were placed on the stock exchange by its co-founders, early investors and former top managers.

The company's market capitalization by the opening of the exchange amounted to $12.67 billion, and according to the results of the trading session jumped to $20.84 billion.

At the IPO price, a personal stake in the company of its CEO Drew Houston is valued at $2 billion, and co-founder Arash Ferdowsi is valued at $800 million.

Dropbox's initial public offering was the largest in the IT industry since March 2017, when Snap, which owns the popular Snapchat messenger, held its IPO. Then it was estimated at $23.8 billion.

According to Harvard Business School professor Josh Lerner, Dropbox became a public company at the right time, albeit in the face of strong competition in a rapidly growing market.^[7]

2017

Revenue - $1.1 billion

In 2017, Dropbox's revenue amounted to $1.1 billion against $844.8 million a year earlier. Annual losses halved from $210 million to $112 million.

Building Your Own IT Infrastructure

In mid-September 2017, TechCrunch published an article on why Dropbox abandoned the Amazon Web Services (AWS) cloud and built its own IT infrastructure.

By September 2017, Dropbox has 500 million users and 200 thousand corporate clients. When migrating from Amazon servers, the company had to transfer about 500 PB of data to its data centers.

Dropbox logo

Dropbox built and launched three data centers in the United States, and also organized a network backbone - the infrastructure that connected American data centers with sites located in other countries of the world. About a dozen people had to solve a difficult problem: it was necessary to save instant file downloads during the transition to new IT systems.

It's good that we managed to create a highway like the one you can see on Google or Facebook, but we built it with the help of a relatively small team, "Dan Williams, head of technology development at Dropbox, told TechCrunch.

Building his own network was a business decision that affected the company's entire operations, he said, as it allowed Dropbox to improve the quality of IT operations as well as improve control and management.

We know that there are powerful third-party solutions with high quality and performance, but we felt that we could be at the level or better, because we know this system well, "said Williams.

Dropbox's own infrastructure has strengthened its reputation among corporate customers, he said, as the latter have become more trusted with the company storing data on its servers.

Dan Williams also noted that Dropbox has a clear understanding of network operations, which the company will use to build revenue, even if these changes increase the service's costs.^[8]

Notes