Dropbox buys Clementine to continue to court the enterprise

Steven Loeb · July 22, 2015 · Short URL: https://vator.tv/n/3eea

Clementine, which let employees message and call each other on a dedicated app, will shut down

When I think of Box versus Dropbox, I often think of the former as being geared toward the enterprise, and the latter being geared more toward personal use. But that isn't really true, at least not anymore, with Dropbox now starting to beefing up its enterprise services.

Its latest foray into that side of the business comes in the acquisition of Clementine, a service geared toward allowing employees to message and call each other. The news was revealed in a blogpost from Clementine on Wednesday.

Clementine provided employees with a dedicated app for work-related voice & text. Social phone usage was kept separate and untouched, meaning that co-workers no longer had to share their personal phone numbers to get work done. 

Features included optional voice recording and transcription, expense tracking, and the ability to create both public and private groups. The company's content and metadata was encrypted and archived for retention, compliance and ediscovery. 

While no financial terms of the deal were disclosed, it was announced that Dropbox would be integrating Clementine's technology, and shutting the service down in the process.

"Our mission and passion for workplace collaboration remains the same. Our stage will grow dramatically as Dropbox builds on our technology to engage with its over 400 million users and 100,000businesses," the company said. "The Clementine service however, will be shutting down."

The free portions of the app will remain active for current users until August 31, and the company saysthat it will continue to "provide plenty of help to regular and premium subscribers as the service transitions."

How Clementine's technology will be integrated into Dropbox, and how many members of Clementineteam are coming to work there, and in what capacity, are not currently clear. VatorNews has reached outto Clementine for more information about the deal and we will update this story if we learn more. 

Clementine's investors and advisers included Homebrew, Redpoint, WTI, John Robb, Ariel Seidman, RoySehgal, Chad Thornton, and Steven Bulfer.

Recently, Dropbox has been adding more features to the enterprise side of the business. Last month itintroduced tiered administrator accounts, allowing businesses to have multiple administrators at three different access levels, each with different clearances for what they are allowed to do within Dropbox.

It also added support for Microsoft's Active Directory, which allows organizations to authenticate and authorize users on a corporate network. This all followed the debut of the Dropbox for Business API in December, which which lets companies integrate Dropbox for Business into their core IT processes.

Going after the enterprise is an interesting proposition for Dropbox, considering how many more users it has than Box, which only has 32 million users and 44,000 paying companies. Those numbers are easily dwarfed by Dropbox's 400 million users and 100,000 businesses.

Box is also struggling financially due to high expense of gaining new enterprise customers; despite revenue for the first quarter of fiscal 2016 being $65.6 million, an increase of 45% from the first quarter of fiscal 2015, it also saw an operating loss of $46.6 million.

Sales and marketing alone cost the company $56.5 million in the first three months of 2015. 

Given this performance, the company has had a hard time convincing Wall Street of its long term viability. The company's stock debuted at $23.23 per share; it is now trading at $16.60 a share.

Perhaps Dropbox, given its overall size and userbase, feels like it is in a strong enough position to whether those costs. If it can succeed in the enterprise, and do as strongly as it has done in the consumer space, the company will be in a strong position when it eventually decides to go public.

This is Dropbox's fourth acquisition of 2015 so far. The company earlier bought cloud storage provider CloudOn, it acquired Pixelapse, a place to share designs and work, and it purchased news recording service Umano in May.

(Image source: clementine.io)


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