Microsoft Teams Up With Dropbox

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Scoot over, OneDrive for Business.

Today Microsoft and Dropbox announced a partnership that will see Dropbox better support Microsoft’s Office suite, and the latter better integrate into the product stack of the storage firm. The news comes after Box, another enterprise-facing storage firm, integrated with Office 365, Microsoft’s Office-as-a-service solution, and OneDrive improved its product mix with unlimited storage.

The deal has four main parts: Quickly editing Office docs from the Dropbox mobile app; accessing Dropbox docs from Office apps; sharing Dropbox links of Office apps; and the creation of first-party Dropbox apps for Microsoft’s mobile offerings.

Surprised? Hold it in. Microsoft can still sell Office 365 without pushing OneDrive for OneDrive or Business, allowing it to vend a service option to the myriad companies and individuals that use Dropbox. Both companies, reached on the phone, were impressed by how large Dropbox is — 80,000 paying businesses and hundreds of millions of users. Not that Microsoft wouldn’t prefer that OneDrive were bigger. It just isn’t.

As such, Microsoft can’t leave out Dropbox: It’s the de facto cloud storage play, and Microsoft wants to sell into the cloud space; if Office 365 is going to be the cloud play for productivity, what choice did it have?

Let’s talk about king-making. Box had to integrate on its own. This deal is much more. Both companies declined to comment on whether either party was paying either party, so presume that Microsoft is paying Dropbox. Windows Phone apps don’t spring from the mists. Microsoft is knighting Dropbox. If you use Office, and are in a large corporation, and want to snag a popular cloud storage option, you now have one.

If Office 365 revenues are going to replace tradtional Office sales receipts, there is little option. Microsoft can buy Dropbox — a very fine idea, poisoned by the specter of aQuantive’s past — or it can partner with a firm that it is trying to kill, which is likely cheaper. Here we are.

Keep in mind that drunk venture capitalists in Silicon Valley will tell you that Dropbox is profitable. Maybe. But at least for now it has a powerful, new, short-term friend. Microsoft doesn’t like to lose.