$250 Million Investment in Dropbox Shows Cloud Computing Security Isn’t a Concern
October 19, 2011
Cloud computing is on the tip of everyone’s tongue recently, and no startup exemplifies the possibilities of the public cloud more than Dropbox. A recent round of funding shows that while there were some issues with Dropbox security earlier this year, they didn’t slow down the company at all. The Dropbox security issues, which have been completely resolved and corrected, raised questions about data security in the public cloud, but the strong growth of cloud-storage companies show that while businesses and consumers may be concerned about security, it isn’t keeping them out of the cloud…
Dropbox Funding
According to this CNET article, a recent round of Series B financing brought Dropbox a little over $250 million from some major venture firms like Sequoia, Accel, Goldman Sachs, and Index Ventures. The investment pegs the company as being worth around $4 billion, which certainly isn’t bad for a company that was born just four years ago.
With the new money, the company plans to build up operations, increase staffing, look for partners, and make a few acquisitions. While still the undisputed leader in public cloud storage, Dropbox is facing threats from a number of high-profile competitors like Apple, Google, and Microsoft, all of which have built-in user bases; so, the influx of money will help the company stay on top of its growing rivals.
The Rise of Cloud Storage
Dropbox’s rise to technology powerhouse is a testament to how the cloud will soon change everything about the Internet. The original idea for Dropbox, according to this Forbes feature, came to founder Drew Houston when he forgot his memory stick on a long trip. He then began working on a product that would allow him to access all his documents from wherever he was.
The company certainly didn’t invent the cloud, but it has come to symbolize one of the core tenants of cloud computing–access. While cloud computing can reduce workstation processing needs and allow data centers to run more efficiently, its big selling point is still the ability to retain constant remote access to important documents and information.
Dropbox Security: Life in the Public Cloud
Of course, data that is more accessible is naturally less secure, so companies thinking about using cloud storage have to weigh the risks, and companies like Dropbox have to ensure that the data entrusted to them is as secure as possible.
Despite how things are looking for Dropbox now, they were looking a little shaky just a few months ago. In June 2011, Dropbox security came into question when a programming error allowed access to any account using any password. The incident could have been much more damaging for the company, but Houston was quick to address the issue, apologize profusely, and move to make sure the problem didn’t happen again. Houston’s response to the Dropbox security issue showed that if a company is sincere in its attempts to safeguard data, its customers are willing to overlook minor issues.
Granted, Dropbox isn’t truly ready to handle corporate customers, but the company has a team in place that is working toward that end. For anyone who is looking for a cloud storage solution in the near future, there are a a number of companies, like Zetta and Nirvanix, that currently offer enterprise-grade solutions. For you, the recent rise of Dropbox may be the perfect launching point for discussions on how cloud storage can change your business environment, and at what point you will be ready to enter the cloud.