Dropbox, Box to Face Harsher Rival in Microsoft

NEW YORK (TheStreet) -- File sync and share specialists Dropbox and Box offer some of the slickest user and best customer-service experiences in their space.

But with deep-pocketed tech giants vying for the same marketplace, these two leading niche players may find themselves in muddier waters. Increasingly, they're at risk of seeing their high-margin, enterprise customers being pulled away to the larger competitors.

Microsoft (MSFT) is an example of these deep-pocketed behemoths.

Earlier this week, Microsoft made an announcement that should be making them nervous. The company said it will be increasing OneDrive for Business storage to 1 terabyte per user from 25 gigabytes and that furthermore, all Office 365 ProPlus customers will get 1TB of OneDrive for Business storage per user as part of their Office 365 ProPlus subscription.

The company is essentially offering a massive amount of OneDrive for Business storage for free.

>>Read More: Satya Nadella: Microsoft's Chief Believability Officer

OneDrive for Business is being used by Microsoft to basically serve as a loss leader that can get the company stimulated in the space for the bigger product in mind, which in this case is the Office suite of solutions, Office365. Microsoft would really be making its money off of adding more business customers to Office 365 at what the tech giant considers to be a small cost. Dropbox and Box also have freemium models, but these file sync and share offerings are mainly targeted at personal accounts as part of the brand recognition enhancement process. Unlike their long-established peer, they cannot afford to offer their file sync and share services for free to enterprise customers at the extent that Microsoft can because that is their core business.

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