Today Microsoft and Dropbox declared a partnership that will see Dropbox better support Microsoft's Office suite, and the latter better integrate into the product stack of the storage firm. The news comes after Box, another enterprise-facing storage firm, integrated with Office 365, Microsoft's Office as a service solution, and OneDrive enhance its product mix with unlimited storage.
The deal has four main parts: Quickly editing Office docs from the Dropbox mobile app; accessing Dropbox docs from Office apps; sharing Dropbox links of Office apps; and the establishment of first party Dropbox. Both companies, reached on the phone, were fascinated by how large Dropbox is 80,000 paying businesses and hundreds of millions of users. Not that Microsoft wouldn't prefer that OneDrive were bigger. It just isn't.
As such, Microsoft can't leave out Dropbox: It's defato cloud storage play, and Microsoft wants to sell into the cloud space if office 365 is going to be the cloud play for productivity, what choice did it have?
Let's talk about king making. Box had to integrate on its own. This deal is much more. Both companies refused to comment on whether either party was paying either party, so presume that Microsoft is paying Dropbox. Windows Phone apps don't spring from the mist. Microsoft is knighting Dropbox. If you use office, and are in a large association, and want to snag a popular cloud storage option, you now have one.
If office 365 revenues are going to replace traditional office sales receipts, there is little option. Microsoft can buy Dropbox a very fine idea concept, poisoned by the specter of a Quantive's past or it can partner with a firm that it is trying to kill, which is likely cheaper. Here we are.
Keep in mind that drunk venture capitalists in Silicon Valley will tell you that Dropbox is rewarding maybe. But at least for now it has a powerful, new, short term Microsoft doesn't like to lose.
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