Dropbox CloudOn Purchase Another Move In Evolving Enterprise Strategy

When Dropbox announced earlier today it had bought CloudOn, a tool for editing Microsoft Office documents on your iPad, it represented another step in Dropbox’s attempt to become more friendly to the enterprise.
Dropbox announced a partnership with Microsoft last November to embed Dropbox into Microsoft Office, and chances are this purchase is an extension of that, while fitting in with a slew of other enterprise-focused moves from the last year.
As TechCrunch writer Alex Wilhelm wrote of the partnership at the time:

“The deal has four main parts: Quickly editing Office docs from the Dropbox mobile app; accessing Dropbox docs from Office apps; sharing Dropbox links of Office apps; and the creation of first-party Dropbox apps for Microsoft’s mobile offerings.”

It’s clear that the CloudOn move gives them Office editing functionality and the engineering talent to take this idea a step further and to increase Dropbox’s integration with Office.
Dropbox’s plan appears to be to hitch its business wagon to Microsoft, particularly Office, which is certainly interesting considering Microsoft has its own similar offering in OneDrive and Office365. Dropbox may be counting on its own popularity with users and believes it can can live in harmony with the Microsoft products in spite of the similarities.
It also dovetails nicely with the announcement of Project Harmony last April to deliver a collaboration layer inside of documents you’ve stored in Dropbox. The company delivered on the first part of that vision with the Dropbox Badge announcement in November. Badge provides a way to collaborate on Microsoft Office documents by clicking the Dropbox badge to see who else is working on a document.

In December, Dropbox also announced a set of APIs to heighten security and compliance inside of Dropbox along with some partnerships with major security and compliance companies. The move was meant to address the chief concerns big companies have about using Dropbox around security and connectivity. Choosing a best of breed approach allows customers to use familiar tools for security and takes the burden off of Dropbox to create them.
All of these moves put together represent a strategy to put on a friendlier business face. While Dropbox claims 100,000 business users to-date, it still faces a challenge when it comes to separating people’s perceptions of its consumer and business lines. And that could continue to be an issue for it, moving forward as it tries to shed its “Dropbox problem” image.
This is especially true inside IT, which may see Dropbox as the poster child for employees using their own software tools outside of IT’s purview.
Dropbox also came to the enterprise side late, and in spite of this series of moves to play catch up quickly, it still faces the battle that every cloud storage company faces today. It must be dead simple for users, but friendly to IT and it’s not an easy balance to find, especially for Dropbox which has until recently been primarily a consumer tool.
All of this is happening against the backdrop of the Box IPO this week and perhaps it’s not a coincidence that the company announced this purchase now, hoping to shine a light on its own business products.
No terms were disclosed for the deal, but CloudOn, an Israeli startup launched in 2009, has raised $26.1M. The company will continue to operate in Israel, giving Dropbox its first presence there.
While the question remains whether IT will ever fully embrace Dropbox, for now CloudOn gives it another set of tools to keep building out its enterprise business. Dropbox will keep making moves like this one to build its enterprise chops while challenging its competitors, as the enterprise sync and share chess match continues.