Dropbox Saved $75 Million By Building Its Own Infrastructure

One of the quintessential cloud success stories is now an even bigger triumph. Dropbox built its business on top of AWS, putting together a brand with help from Amazon Web Services.

But the file storage company made the decision to move away from the platform not too long ago.

The reason was simple — it got big enough.

As reported, the decision to reduce its dependence on AWS and roll out its own infrastructure helped Dropbox reduce its operating costs by $74.6 million over two years. The company detailed this process that started in 2015 in its S-1 statement on Friday.

The cost benefits of moving away from Amazon Web Services were immediate.

Dropbox saved $39.5 million in the cost of revenue bucket thanks to the project from 2015 to 2016, as the $92.5 million spend on Amazon cloud was offset by the $53 million for its own datacenters. The following year in 2017 the company saved an additional $35.1 million in operating costs.

This is what the company said in its statement:

“Our Infrastructure Optimization reduced unit costs and helped limit capital expenditures and associated depreciation. Combined with the concurrent increase in our base of paying users, we experienced a reduction in our cost of revenue, an increase in our gross margins, and an improvement in our free cash flow in the periods presented.”

It was a multiyear process, with the project being completed in the fourth quarter of 2016.

The company still uses AWS for less than 10% of its storage needs, using Amazon cloud resources to serve customers in Europe. That’s because it operates three datacenters in the US, but still doesn’t have a presence in the Old Continent.

Goes to show that going solo can be quite efficient for some startups, as they can design their infrastructure exactly with the needs of their users in mind.