Dropbox will be placed as second storage bucket alongside Microsoft's own OneDrive

Storage giant Dropbox announced today a new partnership with Microsoft Corp. (MSFT).  The deal tightly integrates the pair's products, even as these elder statesemen of the cloud storage market continue to compete for users.

As one of the first fully storage-centric cloud services, Dropbox has grown by leaps and bounds over the past half decade.  A 2012 usage study by Gigaom claimed that Dropbox was second to only Apple, Inc.'s (AAPL) iCloud service in usage, ahead of Google Inc.'s (GOOG) Google Drive and Microsoft's OneDrive (then known as SkyDrive).  By November of last year it had hit 200 million users.

Microsoft has long expressed admiration for the success of the Dropbox startup, which launched one year after Microsoft's SkyDrive, in 2008.  In a Jan. 2013 interview with Bloomberg, then-Microsoft CEO Steve Ballmer commented on Dropbox's growing success, "I'm not beating on Dropbox. They're a fine little startup and that's great."

And Dropbox is pretty enthusiastic about its friendly rival, as well.  It brags, "Dropbox is home to over 35 billion Office documents, spreadsheets, and presentations."

Under the new deal, Dropbox and Microsoft are channeling that mutual admiration and respect, offering tight integration into each others' mobile apps.  On the Microsoft side of the fence Office's mobile apps for iOS, Windows Phone, and Android will gain direct access to the Dropbox storage bucket, allowing it as a cloud storage option alongside Microsoft's own OneDrive.
Office Mobile
Dropbox is being integrated into Microsoft Office Mobile apps.

And Office mobile apps will get a sharing widget which allows you to email as a link or attachment your Dropbox-saved documents.
Dropbox sharing
Sharing is caring.

On the Dropbox side of the fence, the Dropbox Mobile App will integrate Microsoft Office Mobile bits, allowing you to directly open, view, and edit Microsoft Word, Powerpoint, and Excel documents on the go, without even having downloaded Microsoft's free Office 365 Mobile apps.
Dropbox Mobile app
And Dropbox Mobile gets Office integration.

The new features will be rolled out as upgrades to both Dropbox's and Office's Android and iOS apps in "the next few weeks".

The partnership will expand over the next year.  Dropbox elaborates:

Next year we’ll be extending these features to the web by adding integrations between the Dropbox website and Office Online. We’ll also be releasing a Dropbox app for Windows Phone and Windows tablet users in the coming months.

The deal should be mutually beneficial.  Microsoft's new CEO Satya Nadella has offered a bold vision of a cloud-driven future.  And Microsoft's strength has always been strong third party/developer support on its platforms.  In a distant third place to Apple's iOS and Google's Android in the tablet and smartphone mobile markets, Microsoft's cloud push has focused largely on providing apps and services to its rivals' platforms.  So it only makes sense to extend the olive branch and offer a tight integration to a like minded cloud service firm in a similar position.

Dropbox has long been closely associated with Windows users.  With Apple promoting its tightly integrated iCloud in iOS/OS X and with Google promoting Google Drive as the preferred cloud storage solution in Chrome OS/Android, Dropbox is relegated to second class status on its rivals platforms.  Likewise Microsoft's mobile Office solutions are facing competition from Apple's iWork and Google's Docs on the mobile front.  By uniting their mobile efforts, two of the strong third party vendors may be able to challenge their rivals' more tightly integrated solutions.

cloud storage -- Office
[Image Source: PaperBlog]

This deal of course by no means signals the end of fierce competition between Microsoft and Dropbox.  Last month Microsoft became the first cloud storage firm to offer unlimited storage to individual consumers, announcing that soon all Office 365 subscribers will get a bottomless bucket for their files.  Dropbox and Google both offer "unlimited" storage options, but those options are limited to enterprise accounts with at least 5 users.  Apple alone offers no unlimited storage option at present, only offering metered data options to enterprise users.

Source: Dropbox Blog

“So far we have not seen a single Android device that does not infringe on our patents." -- Microsoft General Counsel Brad Smith

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