Honestly, I still think the idea of dropbox is ludicrous. There are many ways to share files, and sending them to a third party to host for you is the worst one of them all. Aside from the few people that really need to multiply their bandwith by many orders of magnitude, a simple file sharing server on their own PC or a server they own would do the job just fine. Besides, dropbox was just yet another iteration of online file hosting (I'm pretty sure rapidshare and megaupload predated dropbox by years), so if file sharing was going to blow up, it would have already, right?
And therein lies the true genius of dropbox. The technology itself had already been done to death; the key was to convince a critical mass of people that this was the solution to their problems. Or even better, convince them of a problem they didn't realize they had. Yet again we see that many times success comes down to the better marketer than truly game-changing technology.
(to be completely fair, their syncing mechanism was the best up until then, plus their add-free freemium model was likely the missing key to success in this space)
"a simple file sharing server on their own PC or a server they own..."
I think that's the part you're missing. What fraction of the general population can set up a file-sharing server? What fraction of the population even owns a server? What fraction of the population even knows what a server is?
DropBox faced this objection over and over again from the investors they pitched, and Drew's answer was variations on "But how many of them have made it easy enough for your grandma to use?" That was the killer innovation - making filesharing so easy to use that you didn't need to set up anything, just install DropBox and drag your files to a folder. And that's been the killer innovation for many startups - Apple, Google, Amazon, Intuit, etc. all let you do things that many other companies have let you do before, but they made it so easy that even the average Joe can do it.
That's the thing though, how many "grandmas and grandpas" really need a file sharing service for blobs of data? There already exists "better" solutions to share common file types: flickr/picasa for images, youtube for video, email for word documents, etc. The vast majority of people simply don't need an arbitrary file hosting service. Somehow they've managed to convince people they do.
On the other hand, if you give something away for free that seems to have value, people will flock to it regardless of need. I'm curious if dropbox is actually profitable. I know of many people who use dropbox that I wouldn't have thought would even have heard of it. But not a single one of them pays for it. Perhaps what we're attributing to success is simply a company being sustained by the VC bubble. Even in the face of the "success" of dropbox I don't see the service in its current incarnation being self-sustainable.
Grandmas and grandpas is a bit extreme. Just about anyone I know uses Dropbox nowadays because it's just simpler than the alternative. I even use it to share files w/ my wife when we're in the same house. I have a SMB share that I use for some things but when I have to send my wife some pictures I just put them in our shared Dropbox. It's easier and she can access it later on her phone too even. Convenience is a very important factor.
My grandfather interviews holocaust survivors and helps make small books of their stories. I set up a dropbox account for him to share transcripts of the interviews, and now he uses it along with the other volunteers. A half dozen retirees, with minimal computer skills, barely able to read English, all happily using dropbox. That really impressed me.
You say a bunch of stuff about how it's the same old same old, and ma and pa can set up a file sharing server and figure out syncing between all the computers they use.
The comments on TFA and yours all miss the point. You touch on it in parentheses at the end. It's easy. Normal people don't have an always on server they can administer and have reliably available. It is literally sign up, install tiny program, put files in a folder. Done. This isn't a problem people didn't have, it was a very real and common problem, hence the success.
Your "to be completely fair" was, for me, the reason Dropbox was a valuable tool.
I know that I can set up FTP to a remove host and store files. I'm sure I could write Automation scripts that looked for updated files, opened connections and uploaded files when I saved them. Then more to regularly open a connection, poll for updates, and initiate downloads. On all my computers, at least. I'm sure that'd work.
With dropbox, I don't have to invest the time to do that, or to keep it maintained. I don't have to think about it. And I have seamless access to these files on any machine I go to, as well as my mobile phones. It's simple, and as I haven't exceeded my 20GB of free space, it costs me nothing.
Yes someone else has my files. But if I bought a virtual server from a hosting company someone else would still have them, and if I used a single machine at my home, it's susceptible to the whims of my Internet provider, a modem/router failure, and the added complexity of getting and maintaining a static IP address to allow the connections (as well as spending more time to harden and protect that machine as it's exposed to the Internet).
Quite a few friends and family have put Dropbox on their personal machines at my suggestion. Because of a whole range of factors (trustworthiness, cost, business model, reliability, usability, design, ease of installation, features) I felt comfortable recommending it, and they felt comfortable installing it. The same could not have been said for Rapidshare, Megaupload, a custom FTP server, etc.
I have a NAS in my house and I still put a ton of important files on Dropbox. Before I had Dropbox I would suffer from pretty significant anxiety every time I went on a trip. What if someone breaks into my house? What if there's a fire? I would literally hide my NAS in my closet when I went away for more than a week. I don't treat Dropbox as a single source of backups but I do treat it as redundant storage to my NAS. It's simple and it just works without having to mess with a lot of settings.
Disclaimer: I work for Dropbox and I trust the people I work with with my files.
"a simple file sharing server on their own PC or a server they own would do the job just fine"
For your own sake, I hope you get more real-world experience before making investment decisions or building technology to sell. To you, somehow the existence of a massively profitable, multi-billion dollar company must be evidence of people's irrationality and not an unmet need.
Are they "massively profitable" though? I haven't really heard anything regarding their financials. They're well funded, but that doesn't really mean anything these days.
There's certainly a need, don't get me wrong. It's just that for most people (paid) dropbox is the wrong solution. And at some point the right solution will present itself and suddenly dropbox will see its market disappear.
As a private company the financials are private of course, but take this as you will:
"Dropbox’s ascent has been just as stunning. The 50-million-user figure is up threefold from a year ago, and it has solved the “freemium” riddle, with revenue on track to hit $240 million in 2011 despite the fact that 96% of those users pay nothing. With only 70 staffers, mostly engineers, Dropbox grosses nearly three times more per employee than even the darling of business models, Google. Houston claims it’s already profitable but won’t reveal margins."
But has the percentage of premium users stayed constant as they grew? I wonder what percentage of users must be premium for dropbox to be/stay profitable. Or perhaps what percentage of traffic must be "premium traffic". Either way, there are a lot of unknowns, but I don't think this market is sustainable. Like Jobs said, dropbox is a feature, not a product. They are able to exploit a market inefficiency for the time being. I don't see that lasting for much longer.
Dropbox's long term future rests on them evolving into something that isn't easy to duplicate or pre-bundle. And even then, unless dropbox pivots massively, the market just won't be as big. File sharing simply is not a multi-billion dollar market.
(I can't help but wonder who I'm talking to seeing as you whipped out a throwaway for a dropbox discussion thread)
I assure you, Dropbox is laughing all the way to the bank!
Anyway, do you realize who uses Dropbox? Many are people in IT related fields and it is simpler and quicker to share files than asking their sysadmin's to setup an FTP or allow file-sharing or use VPN etc. It just works and you don't have to get into all this nonsense of helping your friends configuring FTP clients.
And therein lies the true genius of dropbox. The technology itself had already been done to death; the key was to convince a critical mass of people that this was the solution to their problems. Or even better, convince them of a problem they didn't realize they had. Yet again we see that many times success comes down to the better marketer than truly game-changing technology.
(to be completely fair, their syncing mechanism was the best up until then, plus their add-free freemium model was likely the missing key to success in this space)