How to tell the difference between Box and Dropbox

February 24, 2014: 1:06 PM ET

The two cloud storage startups can be easily confused.

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FORTUNE -- Quick -- name a cloud-based, file-sharing provider that's expected to go public later this year and has the word "box" in its name. (Hint: there's more than one right answer.)

Whether you guessed Box or Dropbox, you're correct. That's because, on the surface, the two appear to be very similar companies, especially now that both startups are nearing their respective IPOs and catering more and more to enterprise customers. Both have raised hundreds of millions of dollars from top venture capital firms, touted impressive growth -- both in employee count and customer base -- and managed to nab some high-profile executives in recent months. Both are run by young, sneaker-wearing entrepreneurs who weren't yet alive when former president Ronald Reagan took office. And, bottom line, both companies have similar offerings: web-based storage, syncing and sharing for photos, documents, and other files.

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But Box and Dropbox do have some noteworthy differences. Yes, there are variations in their pricing plans. (For a comparison, check out their fees and storage capacities here and here.) The real difference, though, can be plainly seen by viewing each company's homepage. Scroll through Box's website and you'll see multiple tabs -- Box for personal, business, and enterprise IT needs, plus information on pricing and a sales contact number. You'll also see words like "security leadership" and "scalable." And the logos of some of Box's most recognizable corporate customers, including Procter & Gamble (PG) and Pandora (P). Browse through Dropbox.com, however, and you won't find any of the above information. There's just a small sketch of a laptop and mobile device, a big blue button that lets you sign up for an account, and the company's simplistic tagline: "Your stuff, anywhere."

The companies' respective websites clarify the differences between the two: Box is focused on enterprise customers (who care about encryption, integration with other enterprise applications, and which other businesses are using the service) while Dropbox's bread and butter are consumers (who just want to get up and running with the service as quickly and smoothly as possible). Despite the fact that Box didn't start out as an enterprise player, co-founder and CEO Aaron Levie quickly realized that would be his sweet spot. The company offers a free account for consumers, but Levie's efforts have gone toward integrating Box's offering with existing enterprise apps like Salesforce (CRM) and Google (GOOG) Apps. The company says it now has about 20 million individual users spread across over 200,000 businesses, including users within nearly all of the companies in the Fortune 500.

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Dropbox, meanwhile, has long catered to the everyday consumer -- co-founders Drew Houston and Arash Ferdowsi started the company back in 2007 because they were tired of e-mailing files to themselves to be able to work from multiple computers. Today, over 200 million people use Dropbox to store and share content, but only a small percentage of them pay to do so. That's why the startup is eyeing the enterprise market, where paying money for a service is a much more acceptable way of doing business. In recent months, Dropbox has rolled out a handful of features for corporate users and infused some enterprise DNA in the company. But, as a cursory glance at the startup's website will tell you, it's still very much a consumer play.

The companies' valuations are yet another difference between the two file-sharing services. But with Box reportedly worth about $2 billion and Dropbox valued at upwards of $10 billion, both are being heralded as two of the largest expected tech IPOs this year. Which company's strategy and market focus -- not to mention which one will get the ticker symbol "BOX" -- remains to be seen.

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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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