Steve Ballmer has made a habit of publicly downplaying competitors right before they eat Microsoft’s lunch. His comments about the iPhone in 2007 will be cited in business school case studies for years to come.

Did he just do it again with Dropbox?

The Microsoft CEO was speaking to Bloomberg Businessweek about the release of the new Office 365 this week when he gave the popular cloud storage service the CEO’s equivalent of a patronizing pat on the head. “They’re a fine little startup and that’s great,” he said, after noting that Dropbox’s 100 million users “sounds like a pretty small number to me” in the context of the estimated 1 billion that use Microsoft Office.

That line in particular is making lots of headlines this morning, of course. It’s not on the level of Ballmer’s iPhone comments six years ago, but the attention on this issue does underscore the rising significance of cloud storage as one of the most critical hubs in our digital lives, and the ability for nimble startups to make an impact by targeting growing market niches.

Dropbox was one of the key apps to arrive Windows 8 following the new operating system’s release. However, Microsoft is also competing in this area with its own SkyDrive service, which is intertwined with the latest Office release to help people move their files across the multiple computers and devices supported by the new Office subscriptions for consumers.

Yes, 1 billion is 10 times 100 million, but Microsoft Office has been around for decades. Dropbox was founded in 2007. The company’s rise is evidence of how quickly the tech world can change. Parts of the tech world, anyway.

Here’s the full interview. The final question is about the status of Office for the iPad. Ballmer declined to give any specifics about Microsoft’s plans.

Comments

  • Guest

    Seems like a fair dismissal to me. Dropbox is a cute little startup that lets me upload and download files. Microsoft Office is a massive productivity suite on which thousands of small businesses have literally built their entire procurement, inventory, mass-mailing, and graphic design departments. If you were standing at such a high perch, wouldn’t you by definition be looking down upon all other companies?

    • Guest

      Stating that Dropbox’s 100 million users “sounds like a pretty small number to me” certainly isn’t a fair dismissal but plain arrogance an hypocrisy If 100 million users comprises “a pretty small number”, than I must assume that Ballmer must think that 60 million Windows 8 copies is pretty pathetic, or that less than 1 million Surface RT tablets must be just noise, right? Steve Ballmer is a joke.

      • Guest

        Windows 8 has been available to the general public for 3 months and it already has 60% of Dropbox’s penetration. Dropbox took 4 1/2 years to get to 100 megausers. I’d say Dropbox is a fun little novelty at the moment compared to what serious businesses release.

        • Guest

          Yet, comparing the market impact of a 4.5 year old company to Microsoft’s user base of 38 years is acceptable to you? This is exactly the arrogance that makes Microsoft miss “fun little novelties” like Google.

          • Guest

            Microsoft Office came out in 1975? What a fun little novelty you are.

      • Epic fail

        Dude, I don’t know where you got your business training from. But whoever it is, demand a refund.

        • Guest

          Ya, because in business school Ballmer is perceived as a visionary. LOL

          • Chips

            For all his faults, and they’re many, he’s run a multibillion company for more than a decade and tripled sales and doubled profits during that time. What have you done by way of comparison… besides be an internet troll?

  • PrideGoethBefore

    Even if the numbers support that opinion saying so publicly doesn’t make for leaving a good impression. Arrogance does not equal confidence: in fact it typically signal the lack of confidence.

    And anyway, in this business it’s dangerous to overlook “fine little startups”. I’m told that IBM once made that mistake with a fine little startup that sold them an operating system. And that same company later made the same mistake about a fine little startup focusing on Internet search.

    • obfuscatebyebyesoulidiot

      Calling someone a fine little startup doesn’t mean you’re overlooking them. In fact it indicates the opposite, that they’re clearly on your radar. And MS didn’t overlook Google. On the contrary, they tried to buy them pre IPO.

  • Bob

    His comment is objectively accurate. Dropbox is a fine little startup, especially compared to MS and its main competitors. What’s telling is how you and others are covering it, which speaks to a more important issue: Ballmer no longer has credibility. Having been consistently wrong on just about every prediction or competitive assessment he’s made in the last decade, he’s now generally viewed as an out of touch clown. In fact, this month alone there have been two scathing reviews of him (and MS’s future) in Forbes and a very strong indictment from ex-MS VP Joachim Kempin in his book.

    Ballmer should have been replaced at least five years ago. Given the erosion that’s taken place in MS’s overall competitive positioning in just the past three years, I don’t envy the new person who has to try and clean up the mess.

  • RunTheNumbers

    While statistically accurate (100M is 10% of 1B), Ballmer always seems to miss some obvious facts beyond simple numbers. Such as the fact that Dropbox is obviously growing, while Office has pretty much flattened.

    Ballmer never seems to find the right context to evaluate all these matters, does he?

  • guest

    The appropriate comparison with Dropbox for Microsoft is Skydrive, not Office. Microsoft’s path to Skydrive has been a confused one – it has been a number of different apps over the years (Live Mesh, Foldershare) built on either the same or competing code bases – but it has been around at least as long as dropbox, and despite being bundled with Windows 8, WP8, Outlook.com, etc – has nowhere near the user base of dropbox.

    • Guest

      First part is accurate. But installed base for SkyDrive, at least last time MS released specific numbers, is 100M. So not “nowhere near the user base of dropbox”. Of course active users could be substantially different and most dropbox users had to make a conscious decision to download the app, although that’s changing in some cases too.

  • spike

    “I went to business school with Steve Ballmer. We used to play poker together and I’d take his money. Recently he showed me a prototype of the most amazing Windows Phone running 8. It was wonderful. The best smartphone I’ve ever seen. And we’ll probably never see it.” -Jim Cramer on CNBC earlier this week.

    “And that’s the problem.” -other commentator on CNBC.

  • http://blog.nordquist.org Brett Nordquist

    I wouldn’t expect Ballmer to understand what many people have known for a long time and that’s just how essential Dropbox is for us who have made the iPad the dominant tablet in the market.

  • Guest

    Like others have said, it’s still very indicative of the arrogance that pervades Microsoft to this day based on years of marker dominance creating complacency and “out-of-touchness.” Obviously Ballmer himself epitomizes these traits. Granted Dropbox is not on the scale of Microsoft, but a “fine startup” neither accurately nor comprehensively describes them. I think that’s how most people treat Microsoft these days – dismissively.

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