What the End of Mailbox, Carousel Means for Dropbox’s Storage Business

Dropbox decides to shutter its Carousel and Mailbox services as it turns its focus on the cloud services that are most important to enterprise users.

Dropbox announced on Dec. 7 was that it is killing off its Carousel service. The offering, which launched last year, allows users to store their photos in a dedicated application. Unfortunately, Dropbox says that it didn’t take off the way it had hoped and users just kept storing their photos on its standard service.

Dropbox will transition the photo and albums saved in Carousel to Dropbox when it officially shutters the service. According to Dropbox, even after the shutdown, users will be able to view and share photos via a Photos tab in Dropbox. In addition, some of the photo management features in Carousel will be integrated into Dropbox to make its main app a bit more useful.

In addition to killing off Carousel, Dropbox made the somewhat controversial (but expected) decision to eliminate its email platform Mailbox. In a blog post on Dec. 7, Dropbox said that while Mailbox “ignited a shift in mobile email,” the platform did little to actually address the “fundamental” issues with email. The most fundamental of those issues was the fact that it wasn’t all that popular, if its low ranking on Apple’s App Store is to be believed.

For its part, Dropbox says that one of the issues with Mailbox is that it was designed to make handling email easier. Unfortunately, it failed in that effort. The company says it will now focus on “workflows” to see how it can use its standard storage platform to make email management more efficient.

The Mailbox closure may be indicative of much bigger issues at Dropbox. The company acquired Mailbox for approximately $100 million, even though the startup was only about a month old. While its interface and the way it streamlined email usage made Mailbox appealing, the decision to close it a little more than two years later suggests Dropbox put too much faith in the potential of a new startup. Worse, it calls into question Dropbox management’s decision-making prowess.

While Dropbox seems committed to integrating apps into its storage solution, the company is still investing in a collaboration platform called Paper. The company even made note of its Paper app in the blog post announcing the closure of Carousel and Mailbox, saying that it’ll take some of the features from Mailbox and put those into Paper to enhance its collaboration features. Look for collaboration to be an important component in Dropbox’s plans.

Dropbox has said on numerous occasions over the last several months that it will focus part of its efforts on serving enterprises. The company, like most firms in the storage business, realizes that the corporate world is moving quickly to cloud-based data storage. Better yet, the enterprise is willing to pay handsomely for safe and reliable cloud data storage service. Now, Dropbox is focusing on taking on companies like Box and Microsoft in the storage market. Consumers are still a part of its strategy, but as the company notes in its blog post on Dec. 7, it wants to “extend” its services to “other parts of our users’ lives.” That means their work time. Image 7: Please use this image:

Silicon Valley seems to have an issue with Dropbox. In September, Dropbox was roundly criticized by many tech investors and analysts, who said that the company might not be worth the $10 billion market valuation. Investors said that Dropbox is competing in a difficult market and has shown no signs of serious revenue growth, despite having more than 400 million users. Perhaps Dropbox’s moves on Dec. 7 were a response to that and its hope of refocusing its business on the things that matter most—growing the revenue generated from its storage business.

The sheer number of competitors Dropbox faces is staggering. Not only are there the major companies like Google, Amazon and Microsoft, as well as smaller storage solutions such as Box, but Dropbox is also being negatively affected by productivity-focused messaging apps like Convo and Slack that offer easy contact with co-workers and file storage to complement those offerings. Combine that with similar services from IBM and other enterprise giants, and it looks like Dropbox will fight an uphill battle in the coming years.

There’s one important point to make about Carousel and Mailbox: They are not going anywhere for now. Dropbox made the smart move to give both Carousel and Mailbox users the opportunity to take some time to move to other services and, perhaps more importantly, give Dropbox time to integrate their features into its own offering. Carousel, which Dropbox officially launched in April 2014, will officially close just short of two years later on March 31, 2016. Mailbox will be shuttered on Feb. 26.