Dropbox reminds me a lot of webmail before Gmail. There were lots of small increments in available space but it was always an issue for users. When Gmail launched wih the promise that users would never again have to manage remaining space they obliterated the competition.
Dropbox is training users to attach a high value to small amounts of space. When a competent competitor launches with an order of magnitude more space it will immediately seem like a much better deal because of Dropbox's years of conditioning their users to think the only value proposition is the physical space.
"When Gmail launched wih the promise that users would never again have to manage remaining space they obliterated the competition."
Except that they didn't. For the last few years, Gmail was a distant third competitor in the webmail space. It seems that now they're finally catching up, and maybe overtaking Hotmail/Yahoo. But saying that at its launch it "obliterated" the competition is simply incorrect.
They didn't take over immediately (it's a pain to change email addresses, the lock-in is pretty high), but they did force nearly immediate changes from the major players. Hotmail at the time was offering only a few megabytes of storage (!) while Yahoo! was offering 6MB. Within months both providers greatly increased their storage, though not immediately to the level of Gmail, to help retain users.
Agreed. I think this is a pretty good example of competition and market forces causing all users to have an improvement, even though the vast majority don't know or care about these things.
The question is: how do you monetize near-limitless storage? Google figured that out with ads. Until someone finds a way to pay for it, that won't happen and once someone figures it out, Dropbox will probably be able to do the same.
While I agree with your point generally, I think it's unfair to say that Dropbox is conditioning users to think the only value proposition is disk space.
For me, the Dropbox client, web integration and storage features are streets ahead of the competition (at least, last time I checked). The free on-by-default document versioning is invaluable to me. It's just difficult to "condition your users" to value software features because by the time you're in a position to condition them to value anything, they already have access to 100% of your software features.
Dropbox is training users to attach a high value to small amounts of space. When a competent competitor launches with an order of magnitude more space it will immediately seem like a much better deal because of Dropbox's years of conditioning their users to think the only value proposition is the physical space.