Even if the breakdown turned out to be vague, the stability of its quarterly technical expenses should still be easy to figure out with the assumption that the datacenter costs are the company's largest and by separating out all other expenses. The company is expected to break down the details of its expense numbers in the S-1 filing. This is in stark contrast to Box, who has much less use for AWS and tries wherever possible to run its own datacenters. In remaining loyal to AWS, Dropbox has reduced the risks of weaker margins associated with the higher maintenance and sales costs that could arise from the build-out of a private or hybrid datacenter model. "That's a huge advantage when you've got global ambitions but you don't want to bet the farm on everything going right," Pelz-Sharpe commented. Similarly, it can reduce costs instantaneously if there's a retraction in the number of subscribers or in storage needs. With AWS, Dropbox is given the ability to adhere to an extremely flexible model that allows it to buy as the number of subscribers grow, rather than having to pay for extra capacity in advance. While some might argue that in the long-run it would be cheaper for Dropbox to build out its own datacenters, such heavy, long-term investments could end up being extremely costly to maintain if the subscriber growth doesn't match up.
It's also about having more predictable costs. "I'd think that they've got one of the sweetest deals going, frankly."īut sticking with AWS isn't just about having to spend less for more. "Dropbox is clearly one of the biggest AWS users and they've been with them right from the beginning - they work very, very closely with them," says Alan Pelz-Sharpe, research director for social business at 451 Research.
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