This whole post seems like contrived bullshit...clearly he doesn't understand the concept of SaaS and recurring revenue. Investors are betting that box can generate a large amountof recurring revenue and THEN reap profits based on those recurring revenues in the future (as marketing and sales costs drop). Free customers also basically cost almost nothing - no support, sales or marketing costs. Sure, some "storage" cost, but really - almost nothing.<p>Also - Box does not sell "storage" they sell collaboration, auditing, and security assurances (ie: HIPPAA compliance is NOT something Dropbox ever offers).<p>>>If Box has to spend almost everything it makes from current customers to win new ones, what is the use of giving its product away for free, aside from boosting the size of their user base to impress investors?<p>Uh, so people who are not paying users who are outside the organization can “see” and collaborate on those files? This also indicates his clear misunderstanding of the benefit of creating corporate users who will not churn - thereby recouping their CAC within 12 months.<p>>>And, more importantly, Dropbox and Box still have to support all those non-paying customers. There is simply no palatable way for them to eliminate free users, and the costs associated with them will continue to rise as the need for storage increases. As more free customers are added into the system, those costs continue to grow, creating a death spiral.<p>then three sentences later….<p>>>Dropbox reduced the price of a gigabyte of storage by 90 percent. That is a clear indicator that, over time, the price of cloud storage will continue to reduce to zero.<p>So how does something dropping to the cost of “zero” equal “..As more free customers are added into the system, those costs continue to grow, creating a death spiral."<p>My favorite part is the ending: "Andres Rodriguez is CEO of Nasuni, a Natick, Massachusetts-based cloud storage-as-a-service company.”<p>Yeah, good luck with that.
There's a rumour (so take with a grain of salt) that both box.net and Dropbox are haemorrhaging users from companies using Google Drive - many companies first experience of 'the cloud' is their office suite, so it that comes with free storage that's better integrated into their productivity tools then they'll never get onboard with other storage providers.
I find it curious that Box does not support Linux. That has immediately eliminated it from the small companies I have worked at over the last few years. Google Drive (except for Docs) is the same problem. This has been to Dropbox's benefit.