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Dropbox Isn't Cutting Prices in Cloud Price War

Plus: NSA backdoor talk.

Asa Mathat
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

However will Dropbox survive the brutal price battle waged by Microsoft and Google in the fight for customers of cloud file-storage services?

“We’re not cutting prices right now,” Drew Houston, CEO of Dropbox told Re/code’s Liz Gannes and Walt Mossberg at the inaugural Code Conference on Wednesday.

Houston is betting its customers will stick with them if they added new services.

In March, Google slashed prices for its Google Drive product, which now costs $23.88 per year for 100 gigabytes of storage space. The price of Microsoft’s OneDrive storage product is also well below Dropbox’s and costs $50 per year for the same storage volume. Dropbox charges $99 a year for comparable capacity.

“Our users go try these things and often they come back,” he said, referring to Dropbox’s rivals.

Still, Houston conceded that Dropbox’s competitors have “narrowed the gap” on what he believed was an early head start in the category. As a result, Dropbox is spending a great deal of time on new ideas. One is a photo sharing app called Carousel. Another is a yet-to-launch collaboration tool built atop Microsoft Office called Project Harmony; Houston said it should be out by end of year.

Separately, Houston also addressed the topic of the NSA and the possibility that it had secretly accessed files and data stored in Dropbox user’s accounts.

“I think everyone has been really frustrated by the issue in general and the way it’s been handled,” Houston said.

But is it possible that the NSA surreptitiously accessed Dropbox accounts through a secret back door?

“The NSA doesn’t send a muffin basket and say, ‘Welcome to this thing,’” he said. “A back door in the infrastructure I don’t think is likely.”

But he did cite reports of such backdoor infiltrations happening, implying that a company may never know for sure.

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