Dropbox, Box Competition Heats Up As Companies Buy Early-Stage Startups On Same Day

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When two closely competing companies make purchases on the same day, it’s probably fair to say that it’s not a coincidence. Such was the case yesterday when Box and Dropbox purchased early stage startups only hours apart.

In fact, the cloud startups with similar names have been on mini buying sprees of late, fighting to fill in holes and improve their products as they march toward an inevitable IPO.

Let’s look at yesterday’s purchases.

First of all, Box announced the purchase of YC-backed Streem. The product lets you stream files from the cloud directly to your local machine.  It’s worth noting that you have been able to view files in Dropbox and Google Drive in your desktop OS file manager for some time. The fact you couldn’t see Box content locally in the same way as competitors had to be a big limitation and I’m betting Box has been hearing a lot of requests for this functionality. Streem actually it takes it a step further by letting you mount the drive on your local system, then streaming the file directly from the cloud, saving your local hard drive space. –and it only costs them money instead of engineering resources (and they get the engineering team too.)

Meanwhile, not to be outdone, Dropbox purchased Parastructure later in the day. This is a big data visualization company, but it’s not clear how Dropbox will use this technology. Perhaps they are looking to extract data about its massive user base or simply to improve its underlying database technology as it continues to grow, or even as a friend suggested on Twitter, it could be to help visualize content in Dropbox.

That they announced these purchases in the same day shows just how tightly these two companies are beginning to compete. For a time it seemed they were on parallel paths with Dropbox taking the consumer angle and Box taking the enterprise one, but over time Dropbox has been increasingly making a play for the same enterprise market, even while it has been fighting to shed its “Dropbox Problem” image with IT.

In the past, I never actually saw the two companies as true rivals, even though they had some common functionality, because of their laser focus on different markets, but it’s clear that’s changing. Box has the upper hand in the enterprise today because it’s been concentrating on it so much longer, but Dropbox has numbers on its side and it’s growing quickly with more than 300M users, and a plan to make itself more attractive to enterprise buyers.

Two purchases hours apart on the same day by two companies in the same space might not be anything at all, but given the history of these two companies it’s hard to write off as mere coincidence and would appear to be indicative of a deeper developing competition.

Featured Image: Peter Harrison/Flickr UNDER A CC BY 2.0 LICENSE