Should You Really Be Using Dropbox as a Data Room in 2022? (2024)

With a market capitalization in excess of$8.5 billionand15.4 million users worldwide, Dropbox can justifiably claim to be the world’s most popular cloud storage platform.

Over the past decade, its logo with that little white box against a blue background has become as well known as any of the big tech firms’ branding.

And with its free version being the first time that close to a billion people used cloud storage, it can justifiably claim to be a pioneer in the industry.

But does being a pioneer in cloud storage justify using Dropbox in 2022? Or is choosing avirtual data rooma better choice?

DealRoom looks at the evidence.

Dropbox Overview

Dropbox almost didn’t happen. Its founder, Drew Houston, was working on a host of other ideas before he stumbled on the concept for the world’s most popular cloud storage.

It was only when Houston - a talented computer programmer - forgot his memory stick (now largely consigned to history because of online cloud storage), that he began to codify what would later become Dropbox.

Within two weeks, he had secured funding from Y Combinator and the rest is history.

What does Dropbox do?

The truth is, Dropbox doesn’t do a whole lot, but what it does, it does very well.

Each user downloads a Dropbox folder on their computer, and the contents of the folder are continuously synchronized with other users in that user’s network, and the Dropbox servers, ensuring that the files are up to date in all locations and devices.

And although it has added a few more functions in the past decade, such as Mailbox, an email app, Dropbox Carousel, and a multimedia gallery app, its core offering is still cloud storage.

What doesn't Dropbox do?

The truth is, Dropbox doesn’t do that much but it is excellent at what it does.

This is why it has more than half a billion users. If you’re looking for a quick fix for files under 2GB in size, Dropbox is fantastic.

Furthermore, the fact that there are over half a billion users means that most people know about its functionality, avoiding the need to explain the concept over and over. Dropbox has nailed commerciality.

And yet, this commercial, one-fits-all nature is also Dropbox’s biggest drawback. In being everything to everybody, Dropbox amounts to less than the sum of its parts. It is a commercial solution, not a professional one.

The fact it has a Family package should tell you everything you need to know. Dropbox is used as much for distributing family seating plans at Thanksgiving dinner as it is for complex business affairs.

The table below looks at some of these pros and cons in more detail, using FirmRoom for comparison.

FirmRoom Data Room Overview

FirmRoomis a leading virtual data room.

In practical terms, this means that hundreds of companies conducting transactions, both on the buy-side and ell-side, turn to FirmRoom to enable them to securely store and exchange information, conduct due diligence, and manage projects from start to finish.

Dropbox vs Data Rooms

Comparisons between dropbox and FirmRoom data room follow in the table below.

Dropbox: the Pros and Cons

In short, Dropbox is a highly capable tool, which continues to evolve.

The transition from mass-market appeal to the go-to tool for professionals' trust is a difficult one, however.

The main pros and cons are as follows:

Pros

• Offline usage:Many cloud storage facilities have total dependence on an internet connection. The fact that Dropbox provides each user with a folder means that they can work offline when needed.
• Access deleted files:The ability to access deleted files for up to 180 days is a benefit that not many cloud storage tools offer. It’s not an immediate benefit, but you’ll be thankful for it when the circ*mstances call for it.
• Ubiquity:On balance, this is more of a pro than a con. There’s one certainty with Dropbox and that’s the other members of a team or counterparty will have used it at some stage, thereby flattening the learning curve.

Cons

• Organizational options:For the most part, you’re on your own. You may find yourself wrestling with hierarchies, folder structures, and access rights.
• Lack of context:As mentioned above, Dropbox is a one-fits-all solution. Although it has made a belated (and admirable) move into project management, for the most part, it still has the feel of a tool designed for amateurs. Sort of like trying to give professional dance classes with a Nintendo Wii.
• Sharing capabilities:The sharing capabilities of Dropbox lag well behind other tools in this space, and although this should be one of the easier issues to iron out, this function is still notably clunky even after all these years on the market.

Conclusion

So, to return to the initial question: should you really be using Dropbox in 2022?

The truth is, it depends.

For professions where the requirement is for several teams, composed of several members, to share and request dozens of documents (areas of the legal, financial, and medical professions) Dropbox is adequate at best and a data room would be a much better fit.

For roles less demanding in these tasks, say, a teacher sharing files with a class - there are few better options on the market than Dropbox.