Dropbox’s EU expansion rolls on with new German hub ahead of local data center launch

Dropbox has announced its latest move to woo Europeans to its cloud-based file-hosting service: the launch of a new office in Germany to cater to the DACH region — namely Switzerland, Austria, and, of course, Germany. The new hub represents the San Francisco-headquartered company’s fifth base in Europe, after its Dublin HQ, its expansion into London and Paris last year, and the new Amsterdam office launched in February.

With more than $600 million in funding since it was founded back in 2007, Dropbox has emerged as one of the preeminent brands in the cloud-storage realm, though it has faced increasing competition from heavyweights such as Google (Drive), Microsoft (One Drive), Amazon (Cloud Drive), and Apple (iCloud). As a result of the highly competitive nature of this field, questions have emerged about Dropbox’s longer-term viability. Such concerns haven’t been entirely without merit — the company shuttered a couple of apps last year, and it reportedly cut back on a number of employee perks lately. But it has also been on a major product development push of late — it launched Project Infinite, which shows all company files locally while storing them remotely, introduced support for Facebook Messenger, and rolled out a cheaper pricing plan for educational institutions.

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However, around three-quarters of Dropbox’s 500-million-plus users are based outside the U.S., with a “significant portion” in Europe, which is why the company is continuing to double-down on its efforts on the continent. “One in three internet users in DACH are now on Dropbox, and they’ve created over 163 million connections to date by sharing documents and folders,” said Thomas Hansen, global vice president for revenue at Dropbox, in a blog post. “This makes Dropbox users in DACH our most collaborative in the world per capita — even more so than the U.S.”

According to Hansen, Dropbox Business has tripled in use across Germany in the past two years, which is why it’s now putting a physical presence on the ground in the region. But converting free users into paid users is a perennial challenge for most businesses that adopt a freemium business model, so to help reduce that friction it launched localized payments last year, kicking off in 12 European markets. This effectively moved Dropbox beyond bank cards, PayPal, and Discover and into direct debit, which is a popular way of setting up recurring payments in Europe.

Dropbox’s move to open a base in Germany is notable for one over-arching reason. With Europe creating a greater divide between U.S. tech companies in terms of how data is shared across the two regions, Dropbox has previously committed to host its customers’ data within Europe by Q3 2016 — and its new data center will be housed in Germany. So it all makes sense, really.