In this presentation I discuss the particular implementation of the freemium subscription-based model in case of Dropbox.

1. Vladimir Orekhov

2. SOME INTERESTING FACTS*
A billion files saved every 24 hours
100 million users
In 2011 when its revenues were $250 million, it
was valued by private investors at over $4 billion
* – Information from Nov. 13, 2012

3. SOME INTERESTING FACTS*
Dropbox uses Amazon web services
Biggest challenge is to scale in terms of
organization and to move from one coreproduct to many
* – Information from Nov. 13, 2012

4. WITH THE ANNUAL REVENUE OF AROUND $500
MILLION, WHAT IS THE PERCENTAGE OF PAYING
USERS DROPBOX HAS?
4%

5. PRICING

6. FREE PLAN
2 GB space for free.
From Dropbox pricing terms:
If a free account is inactive for 90 days, then
Dropbox may delete any or all of your files
without providing any additional notice
500 MB per referral (invite friend), but not more
than 18 GB – Dropbox outsources promotion.

7. WHY DROPBOX DOESN’T PUT A LIMIT TO
THE NUMBER OF DEVICES FOR FREE
PLAN?
1. WHEN THEY STARTED AND DEVELOPED
THEIR PRICING STRATEGY, THERE WERE
NO IPHONES, IPADS ETC.
2. IT VIOLATES THEIR STRATEGY

8. PRO PLAN
The only difference from Free plan is increased capacity (not
mentioning that no one has a right to delete your documents).
Fixed plans:
• 100 GB
• 200 GB
• 500 GB
3 options, perhaps, not to frustrate users with too many of options
(can you say, what capacity do you need – 200 GB or 240 GB?).

9. BUSINESS PLAN
Starts from 1 TB for 5 users.
Main differences from Pro plan:
• Centralized administration
• SSO (Single Sign-on)
• Centralized billing
Is used by Foursquare, Kayak, Rockstar energy drinks.
Interesting fact is that user can’t buy 1 TB within Pro
plan. If there was such an opportunity, the value of
centralized administration, SSO etc. would have been
clear.

10. USER STORY
Free, 2GB
Needs more space
Invites friends
Free, 18GB
Gets used to it
Pro, 100GB
Needs even more
space
Needs even more space
Encourages his managers
To use Dropbox within the company
Business
Pro, 200GB
Needs even more space
Manager needs an easy tool for
collaboration within the
company
Pro, 500GB
Interesting fact is that user can’t buy 1 TB within Pro
plan. If there was such an opportunity, the value of
centralized administration, SSO etc. would have been
clear.

11. STATISTICS
125$
120$*
Average payment annually from paying customer (2012)
500$*
Upon request**
* – prices for monthly billing. Billing annually saves about 17%.
** – prices for business plan are not mentioned. Obviously, they are higher.