Exclusive: Dropbox seeks partners to convert free users to paying customers

Dropbox wants to convert more of the millions of users of its free file-sync-and-share service into paying customers — and it’s banking that select IT consultants and managed service providers (MSPs) will help it do so.

Kevin Egan, VP of sales for Dropbox.

Kevin Egan, VP of sales for Dropbox.

The San Francisco company says it has more than 100 million users overall. More to the point, it claims a presence in more than 2 million businesses, including 95 percent of the Fortune 500. But like other vendors that led with a free version of its service to win mindshare, it won’t disclose how many pay for the Dropbox for Business version. Dropbox execs say its name recognition among consumers — many of whom brought it to work — is a draw for these resellers that can provide services around Dropbox for Business.

Pent-up demand?

“We’ve seen a lot of inbound requests from MSPs and IT consultants who want to bring Dropbox to customers and at this point we feel Dropbox for Business is ready,” Kevin Egan, VP of sales for Dropbox said in an interview.

Dropbox for Business, once known as Dropbox for Teams, adds IT-friendly features including Active Directory integration, single sign-on and an admin console for managing corporate users — and pricing starts at $795 per year for 5 users.

Neither Egan or Adam Nelson, the Dropbox executive in charge of the partner push, would share details about the number of partners Dropbox seeks or what sort of incentives they can expect. Nelson said the goal is to select MSP, IT consultant and VAR partners to work collaboratively with the company’s own sales team. “We view partners as an extension of our sales force, evangelists who go out and fulfill demand externally and create a great customer experience,” he said.

Of course, that’s the pitch most tech vendors make, but the reality is that inside sales teams and third-party partners often end up competing for sales and for the incentives they bring. The rationale here seems to be that there is so much demand for Dropbox and related services, that there will be enough work for everyone.

A couple of partners familiar with Dropbox’s plans — both of whom requested anonymity because they’re not authorized to speak about them — said the company has a shot.

One MSP said he gets “a ton” of requests for Dropbox and he sees huge opportunity moving small and medium businesses over to the service instead of updating aging file servers. In return he will get recurring revenue from a service that requires little or no end-user training and will be easy to support.

An IT consultant said Dropbox inside sales can provide a list of employees in any given account that are already on the free Dropbox version. He can then use that data to convince IT it’s time to go to the paid version that will give admins more control. [Update: According to a spokesman, Dropbox will not provide partners a list of names but would offer information about the number of employees using Dropbox on a given domain.] 

‘Dropbox of the Enterprise’ wannabes on the rise

Dropbox has huge name recognition and a devoted consumer base, no question.

But this is a hotly contested space. Microsoft (s msft) hopes to parlay its Office-and-Windows-and-SkyDrive play here while  Google (s goog) does the same with Google Apps and Google Drive. At the same time, Box has staked its claim as an IT-sanctioned cloud storage and file sharing service and then there’s an array of other players including Accellion, LogMeIn (s logm) and OwnCloud  vying for share.

All of those companies would love to become the “Dropbox for the enterprise.” As Dropbox rolls out more IT-friendly features and a business-focused partner program, it’s clear that it plans to assume that title for itself.

Note: This story was updated at 11:57 a.m. PDT with Dropbox’s clarification of what customer information it will provide partners.