Where Should You Store Your Money: Dropbox or Box?

Neither have yet to IPO, but peeking inside both shows us a cloudy future.

Jun 24, 2014 at 9:45AM

Box, the simply named cloud storage provider, filed its registration statement to go public back in March. Dropbox, a competitor, is always in the rumor mill to begin its IPO process. But if you've been waiting to invest in either, you might have failed to see the storm clouds develop on the horizon for either cloud storage company.

Cloud storage was a growth business, but technology moves quickly: prices are collapsing and competitors are solidifying their services. Unless a company can offer high-margin services on top of traditional storage, you should stay away from an investment in the business. Here's why.


Microsoft bundling Office 365 with its OneDrive cloud storage. Source: OneDrive Blog

When Dropbox launched in 2007, cloud storage was young and it had few competitors. At that time, a 500 gigabyte hard drive cost about $100. Today, Microsoft (NASDAQ:MSFT), Amazon, Google (NASDAQ:GOOG), and Apple (NASDAQ:AAPL) all offer cloud storage services. Today, you can get a 3 terabyte hard drive for $100. With increased competition and a decrease in storage costs, cloud storage providers -- except Dropbox -- have slashed what they charge users repeatedly:

  • Microsoft doubled the free storage offered with OneDrive from 7 GB to 15 GB, cut prices for paid plans by 70%, and if a user subscribes to an Office 365 plan (starting at $7 a month), they receive 1 terabyte of free storage
  • Apple announced, along with its traditional free 5 GB, that it will offer 20 GB for $1 per month, and 200 GB for $4 per month.
  • Google cut prices in March, and offers 15 GB free, 100 GB for $2 per month, and 1 terabyte for $10 per month.

Comparing services is difficult as firms offer a variety of packages, but it's evident the smaller Dropbox and Box think they can offer services to justify a premium.

  • Dropbox offers 2 GB for free, 100 GB for $10 per month, 200 GB for $20 per month, or 500 GB for $50 per month with discounts if paid annually.
  • Box offers 10 GB for free, and 100 GB for $5 per month.

Just what features come with the more expensive Dropbox and Box?

Dropbox released Carousel, an app to view and share photos and videos, in April. However, Apple's photo solution backs up photos, allows viewing across devices and friends, and is built into the operating system of iPhones and iPads. Google has a similar solution with roots in its Picasa software. And the first item advertised on Microsoft OneDrive's website is photo and video backup. Box, more focused on enterprise, offers a variety of photo services through third-party apps built on top of its service.

Dropbox is also touting a coming Microsoft Office collaboration service called Project Harmony. Of course, Microsoft's OneDrive already provides similar real-time collaboration, Google Drive has had this for those who use Google Docs, Apple increased collaboration tools with its latest iWork suite, and Box offers Box Notes for quick and simple collaboration, along with more third-party apps for other features.

Feature rich is the standard
Perhaps because of this weaker value proposition for its users, Dropbox has stuck with private markets where they raised $350 million earlier this year and opened $500 billion in a credit facility.

Box, which had its financials scrutinized earlier, has yet to IPO after being eligible to list shares in April.

Neither seem like a place to store your investment dollars when the time comes, or your files based on the premium price and middling features.

A new Apple device that will need to sync to the cloud
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Dan Newman owns shares of Apple. The Motley Fool recommends Amazon.com, Apple, and Google (C shares). The Motley Fool owns shares of Amazon.com, Apple, Google (C shares), and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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