Back in March, we discussed Dropbox, the granddaddy of cloud file sync/sharing services.

As we summarized then, Dropbox’s service continues to work, and pretty flawlessly in my experience.  I’m a very happy user.  But as a company, they’re in trouble.  Being a one-trick pony, they can’t survive now that their core offering is part of a suite offered by Microsoft, Google, and Apple.

Tech history is rich with examples of companies that were pioneers in some kind of software, only to be blown away when one of the big boys incorporated the same functionality into their offerings.  Examples:

• Norton, PC Tools: There was a time when Windows users routinely bought utility software.  But soon all the featuers these products offered (disk defragmenting, disk repair, encryption, etc.) was built into Windows.
• PKZip, WinZip: When’s the last time you bought a standalone compression product?
• Roxio, Nero: And when’s the last time you bought a standalone CD ROM burner?  Sure, optical media is dead (or just about), but long ago Windows could do everything these products could do.
• Media Players: What, you’re not still using RealMedia Player?
• ZoneAlarm: I loved ZoneAlarm.  I loved it even more when Windows XP incorporated its own firewall.

These were companies offering standalone products.  Dropbox is one of these companies.

It’s All About Value Extraction Now

In September, Dropbox announced they were buying back more shares.  A buyback is an admission that you have no other way to use capital constructively, like new products or market expansions.  They’ve been doing this since 2020.  They also announced they were refinancing their debt, and taking on more debt, which would be used to buy back more shares.  I don’t have a Master’s in Finance from. Wharton, or even East Mississippi State, but borrowing money to fund share buybacks is never a good idea from what I’ve seen.

At this point, Dropbox is admitting that they’ve captured as much of the market as they can and are turning to a strategy of paying out earnings to investors.  N0w, if you’re a company that has built a competitive moat around a near-monopoly product, this is all well and good.  Or even if you just have a really strong brand and reasonable expectation that that brand is going to endure for the foreseeable future, that’s a fine strategy.

But Dropbox doesn’t have those expectations.  They should expect their userbase to decline.

The Strategy Has Been a Flop

On September 2, 2025, their stock stood at $28.48 a share.  Today it’s at $27.28.  So the market has not exactly embraced this strategy.

In December 2024, they had about 301 million shares outstanding, and their stock was trading at about $30.  Today, they have 174 million, and with 42% less shares, they’re trading at 10% less.  Ouch.

In other words, the buyback strategy hasn’t work.

I’m Going to Miss Dropbox

As I wrote last year:

Switching to another product would be disappointing but honestly not that painful for most people, which is their core problem. There’s no lock-in.  I love Dropbox but if I had to switch to Google Drive tomorrow, I wouldn’t really lose any functionality.

Sadly, that

raindog308

Raindog308 is a longtime LowEndTalk community administrator, technical writer, and self-described techno polymath. With deep roots in the *nix world, he has a passion for systems both modern and vintage, ranging from Unix, Perl, Python, and Golang to shell scripting and mainframe-era operating systems like MVS. He’s equally comfortable with relational database systems, having spent years working with Oracle, PostgreSQL, and MySQL.

As an avid user of LowEndBox providers, Raindog runs an empire of LEBs, from tiny boxes for VPNs, to mid-sized instances for application hosting, and heavyweight servers for data storage and complex databases. He brings both technical rigor and real-world experience to every piece he writes.

Beyond the command line, Raindog is a lover of German Shepherds, high-quality knives, target shooting, theology, tabletop RPGs, and hiking in deep, quiet forests.

His goal with every article is to help users, from beginners to seasoned sysadmins, get more value, performance, and enjoyment out of their infrastructure.

You can find him daily in the forums at LowEndTalk under the handle @raindog308.