Earlier this year Box (www.box.com) floated their company on the stock exchange, raising $175m. This was a big deal as cloud services are a relatively new concept and consumer appetite to invest in such services was in question. As you can see below, it turns out that the share price tanked soon after theÂ floatation, so, are cloud services destined to flop on the exchange?
Well, one of the biggest cloud providers out there, Dropbox, are now making all the right noises, they seemingly want to float the company soon. The same thing could happen to their share price, but, I’m not sure it will.
You see, research suggests that Dropbox has 300m users while Box only has 20m users, so the marketable user base of Dropbox is massively larger. That user base has inherent value, whether they’re a free user or paid for users, which could make Dropbox a more attractive investment opportunity.
Dropbox could look to spend some of their raised capital on enticing offers, with the aim of converting their current free-registered users to paid ones. That should/could/would cost substantially less than attracting new customers AND their existing users are already familiar with the service.
Disclaimer: Please be aware that while we make every effort to make sure these figures are correct, they are used purely for the purposes of illustration. No investment decisions should be made based on these. The views expressed in this article are opinion, not fact.
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