How Dropbox plans to conquer business

April 10, 2013: 12:00 PM ET

The startup's newest features are aimed at making nice with IT.

121221105648-future-ipos-dropbox-gallery-horizontalFORTUNE -- Dropbox means business. That's why the San Francisco-based file-sharing service is rebranding its "Dropbox for Teams" offering—geared at corporate users, not just consumers—to the more enterprise friendly-sounding "Dropbox for Business." In an effort to make nice with IT, the company is also introducing single sign-on capabilities, which let employees log into Dropbox with the same credentials they use for other internal business apps (and gives administrators more control over the authentication process).

The company says 95% of the Fortune 500—and over 2 million businesses total—are already using Dropbox. It also says some 600 million work files are saved by employees each week. But few IT departments officially sanction the use of Dropbox, and some have outright bans on the file-sharing site because they fear it will weaken their ability to control and secure company data. What's more, Dropbox hasn't yet proven its got the right "DNA" to go after the enterprise market, a new entry for the company. In the meantime, there are many other competitors in the space. Los Altos-based Box has already made a name for itself in the enterprise space. Larger players like Google (GOOG) and Salesforce (CRM) have launched similar offerings and upstarts like Egynte and Accellion are also gunning for corporate customers.

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Up until very recently, Dropbox had its eye on everyday consumers, not corporations. The company's amassed over 100 million users, and claims it has paying customers in over 200 countries. The original Dropbox for Teams product, which lets small groups of employees share documents, launched in late 2011. But Sujay Jaswa, VP of sales and business development at Dropbox, says the company just didn't have the manpower to make a more concerted move into the enterprise market in the past. "We think we can do a good job now," says Jaswa.

Late last year, Dropbox hired Anand Subramani, a former product manager at Zynga (ZNGA), to lead product development on the newly rebranded Dropbox for Business. In February the company unveiled a new "admin console" that allows IT administrators to track and set sharing controls, keeping certain folders and links within the company. According to Subramani, the console and single sign-on capabilities are just the beginning. New functionalities will be added every few months in an effort to turn Dropbox into a more enterprise-grade service. But success will at least partly depend on getting the right talent into the company--with over $250 million in funding (and a swanky new office space in San Francisco) hiring new employees shouldn't take long. Convincing IT managers that Dropbox is ready for business, however, could take a while.

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About This Author
Michal Lev-Ram
Michal Lev-Ram
Writer, Fortune

Based in Silicon Valley, Michal Lev-Ram covers enterprise and mobile technologies for FORTUNE. Prior to joining FORTUNE, she wrote for CNNMoney, Fast Company, Popular Science and other business and technology publications. She was also a staff writer at Business 2.0 and holds a B.A. in journalism from San Francisco State University.

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