Dropbox is the absolutely easiest cloud storage service out there, that's certain, and I'm sure many people will find this a fair package with a fair price. But I suspect most teams of up to 5 people will find this price way above the opportunity cost of setting up and getting used to a different cloud storage service.
It bears repeating: I'm not saying it's a bad package, and it would be foolish of me to assume that the market will perceive this price the way I did. But I do think they should have started offering something simpler and cheaper, and worked their way up to plans like the one they just launched.
Don't think of it as $795/year. Think of it as $13.25 per user per month.
And it comes with 200GB per user and the unlimited version history feature turned on, so this is actually cheaper than five 100GB personal pro accounts ($19.99 per user per month) and it comes with twice the storage and the Teams features! A bargain!
The only remaining question is why Dropbox presents the data as they do. Perhaps they did some A/B testing? My hypothesis would be that individuals and companies simply think of prices in different units. I predict that the discussion here on HN will bear this out: Someone will complain about $795/year but be happy to pay $13.25 per month. ;)
So, I just saw several nice talks about A/B testing, one of which was by our very own patio11.
And the way A/B testing works is that you have to take the data. Hypotheses are just hypotheses. They can be wrong! They can be really wrong! The data will surprise you sooner or later.
Here's a hypothesis: If you put up this chart instead of the one that is there:
2GB: $9.95 per month
100GB: $19.95 per month
200GB plus Teams: $13.25 per month per user, min 5 users
Here is what might happen:
A. On the margin, people with very small companies will tend to buy more Teams subscriptions.
B. However, that effect may be partially canceled out by the large companies that are subliminally turned off by a page that mentions only monthly pricing, not other kinds of pricing. Monthly pricing is great for individuals with credit cards, but company purchasing departments can work... differently. It might in fact be much easier to buy a year at a time than a month at a time just because of the administrative overhead and the culture of purchasing departments, and you'll absolutely have to use purchase orders and invoicing and get approvals, and if the vendor isn't set up for such a thing the whole process will be a huge ball of red tape, and gosh look at the time let's go out for lunch and talk about Dropbox tomorrow, or maybe next month...
C. Meanwhile, some of your potential 100GB customers will be furious that they are being charged so much money! They will stomp their feet and emit furious tweets and threaten to hold their breaths until they turn blue unless they get the $13.25 price.
D. And other potential 100GB customers will look at this and say "hey, bulk discount!". And they'll figure out how to band together with four trusted friends, and pull together a year's worth of cash at once, and buy a Teams account instead, and whoops now Dropbox is making less money on one Teams account than five 100GB accounts.
...and thus I wouldn't be too surprised if the results of A/B testing say: Leave the pricing page as it is.
...or, maybe Dropbox didn't actually test this page, and the more-straightforward hypothesis is actually the one that is right, and they could make even more money by switching to all-monthly pricing. ;)
> D. And other potential 100GB customers will look at this and say "hey, bulk discount!". And they'll figure out how to band together with four trusted friends, and pull together a year's worth of cash at once, and buy a Teams account instead, and whoops now Dropbox is making less money on one Teams account than five 100GB accounts.
Wow, this is actually a great idea. I should do this with my friends.
Having a seemingly higher price might actually also make big businesses take a look at it more seriously. At something like $13 a month it's easy to overlook and aim for something that appears seemingly more big business ready.
I was thinking the same thing. I work for a services organization in a huge IT environment, and we do everything by the month.
But in this case, Dropbox is competing with people who are going to buy a Windows server to host files. And $795 is cheaper than a server+windows+vpn+...
I think their reasoning is they want people to commit to a full year rather than one month. I agree it's not a good way, really.
They should start with $15/month and suggest $795 yearly for discount.
That's actually a very good point. If they presented their plan the way you just laid out, I wouldn't be so ill impressed with it. I still think this plan isn't for me, and I still think they should've been more flexible with the package and pricing, but it makes a bit more sense now that you put it this way!
One limitation of non-team accounts is that you can't easily run multiple accounts on one machine. (It's possible with some hackery involving multiple OS user accounts.) I would hope that Dropbox for Teams makes it easy to run the team account in parallel with a personal Dropbox account.
This is inaccurate, isn't it? The whole point of working in teams is to share files. Any file that is being shared with everyone is being counted against everyone's space. At least that's my understanding of how Dropbox works based on sharing a few folders with friends on free accounts.
Yes we initially did that, bought a 50gb account and shared that folder with everyone, but it counts against their free 2Gb shares - so everyone needs their own 50Gb plan
I'm part of a small team using Dropbox right now and yeah, this was a killer. We're living inside the 2G free limit at the moment, waiting vaguely on expense approval. It's not even the amount, it's that it lives right between the "just do it" level (e.g. $30/mo on someone's credit card for EC2 hosting) and "management-visible priority" ($4k for development boards).
It's simultaneously too much for me to do on a whim and not enough for my superiors to care. Drop it to $35 and bill it monthly and we'd buy it in an instant.
Google Docs offers ca. 1 GB for free, and sells storage upgrades of 20 GB at 5 USD/year. That means prices match at about 3 TB.
So on the one hand, you have DropBox with unlimited storage and a limited, upgradeable number of users. On the other hand, you have Google, with limited, upgradable storage, and unlimited users.
If only Google's storage was a bit more usable. (Also, I have a hunch an AWS-based solution may be cheaper depending on some other variables.)
Like I said, the problem is not so much the package and price as it's the fact that it's the only package they're offering right now. I see very few use cases in practice for unlimited storage and limited users.
EDIT: s/unlimited storage/200 GB per user/ where applicable
200GB x 5 users (what Dropbox gives you) would cost $1950 per year on Jungledisk ($4 + 190gb*$0.15 per user). In practice, Jungledisk could be much cheaper since you only pay for what you use on Jungledisk. But you would have to do the math for your teams expected usage.
I wonder if making it monthly instead of yearly would reduce some of that sticker shot. Also, it would probably be easier for small teams to signup because they wouldn't have to scrape together as much cash up front.
Dropbox is the absolutely easiest cloud storage service out there, that's certain, and I'm sure many people will find this a fair package with a fair price. But I suspect most teams of up to 5 people will find this price way above the opportunity cost of setting up and getting used to a different cloud storage service.
It bears repeating: I'm not saying it's a bad package, and it would be foolish of me to assume that the market will perceive this price the way I did. But I do think they should have started offering something simpler and cheaper, and worked their way up to plans like the one they just launched.