When Thomas Hansen first started in the technology sector 25 years ago selling computer hardware in Denmark, he was strongly encouraged to use a software system that was flawed and hated throughout the office.
“It was a horrible system and we all hated it, but it was a condition of employment so we used it to its bare minimum,” Dropbox, Inc. global vice president of revenue Hansen tells ITBusiness.ca. “I believe its human nature that, if you’re forced to use something and it has the slightest thing wrong with it, you’ll do your best to undermine and avoid it.”
Fast forward almost three decades to present day and Hansen now helps lead a company that has employed the exact opposite approach to successfully growing its brand into one of the largest file hosting and cloud storage systems worldwide.
“When the ‘bring your own device’ notion took off about five years ago, people started taking their own solutions that they had at home and using it at work and anywhere in between,” he explains. “Suddenly, we had a situation where majority of a company’s employees were all using the free version of Dropbox, and [their IT departments] realized that with so many of their workers using the product happily, that it would be in their best interest to provide it to them with the right business security, management and support.”
The former Microsoft executive says that this organic, internal expansion of Dropbox is the result of a recent industry-wide shift from IT department-led innovation to user-led innovation. With so many employees across literally hundreds of enterprises using Dropbox at work, it was like a foot in the door to a larger, paying customer nase, Hansen says.
“We don’t need to go to any company and convince them of the merits of our product,” he laughs. “All we need to do is tell them that 60 per cent, for example, of their employees are already bringing Dropbox to work every day, so why not invest in the business version that comes with better security and integration into other applications like Adobe, G-Suite, Office 365, Slack and Facebook Workplace?”
It can’t do it alone
Recently, however, Dropbox has turned to the channel, a network of commercial partners and resellers that many software and hardware companies rely on to distribute their products, particularly when it comes to expanding its customer base at small and small and medium-sized businesses (SMBs).
In fact, Hansen says that the company “fundamentally believes” the only way to address the millions of potential users represented by SMB owners and employees is through a network of distributors and resellers.
“We have half a billion registered users, so there’s massive opportunity for our channel partners and vendors to sell Dropbox both to their existing customers as well as leverage it as a new customer acquisition engine,” he says.
So far, it appears to be working: The company, which will be celebrating its 10-year anniversary in June 2017, now boasts more than half a billion registered users globally. It is also used in more than eight million business around the world and counts more than 200,000 organizations as paying customers, including 52 per cent of Fortune 500 companies, Hansen says.
Additionally, according to a January 2017 announcement, the company has officially reached and surpassed $1 billion USD in revenue.
A focus on SMBs
There are roughly 200 million SMB companies worldwide, Hansen notes, and he can’t call every single one on his own. This is where partners such as high-tech distributor Ingram Micro, which joined Dropbox’s global distribution network in November 2015, come in.
Ingram alone has more than doubled the number of resellers in Dropbox’s network, which now numbers close to 5,000, Hansen says, and while the company could not provide specifics, he says that reseller network has helped the company’s annual recurring revenue by a percentage in the triple digits.
“Dropbox can’t hire a million sellers on its own, but what we can do is line up our product in the channel through Ingram Micro,” he explains. “In our case, they’re finding thousands of resellers for us, and if each reseller employs 10, 20, or more representatives, who in turn can go out and talk to hundreds of SMBs, it’s a classic scalable model. I compare it to the old analogy where if a village is hungry, you don’t catch the fish for them on your own, you teach them all how to fish so they can provide for themselves.”
Another challenge Dropbox faces is the fact that many SMBs don’t actually have IT departments, relying instead on general employees, family members, or friends who may know little about tech to help them find the right solutions, Hansen says.
“The majority of SMBs that fall into this category rely on trusted resellers in their immediate vicinity, so we’ve made a push to accommodate these local resellers, and make sure that they see the benefits and value of working with Dropbox,” he emphasizes to ITBusiness.ca.
Hansen adds that Dropbox is also working on reaching the roughly 100 million SMB companies worldwide that are currently not computerized yet. When those companies are ready to embark on their digital transformation journey, he says, they will likely go straight to the cloud, where Dropbox will be waiting to help them get started.
Looking ahead, Dropbox hopes to become the biggest cloud storage and file hosting providers, and is well on its way to doing so, Hansen says. For example, the company recently announced a partnership with Facebook Workplace in April 2017, and is already integrated with the likes of Microsoft Office 365, Google G Suite, team chat platform Slack, and more.
“Our biggest competitors are Google Drive and One Drive from Microsoft, and neither of them are leaders,” he says with a smile. “That’s a fact, it’s not me being obnoxious – we’re leaps and bounds ahead of any competition in the world of cloud.”