Dropbox cofounder Arash Ferdowsi passes off CTO role to VP of engineering

Dropbox has promoted its VP of engineering, Aditya Agarwal, as its new CTO, putting him in the position that's been held by cofounder Arash Ferdowsi since the company's launch in 2007.

Although Ferdowsi will step back from running the day-to-day technical side of the company, Dropbox says he will continue to be involved in all aspects of the business, including product, technology, and recruiting.

"The cofounder is a way better title for Arash because of all the different things he does for the company," Agarwal told Business Insider.

In his new role, Agarwal will be responsible for building the product roadmap for Dropbox, a company that's been in transition from a popular consumer app to a more sophisticated set of business software targeting small and large companies alike. Agarwal, an early Facebook engineer, has spent almost 5 years at Dropbox, overseeing the development of products like Dropbox Enterprise and Paper, while scaling the engineering team from 20 to hundreds of people across the world.

"Our roadmap is about reimagining the way people and teams work together. And my job is to translate that roadmap into building high quality products, quickly," Agarwal said.

False assumption

Agarwal's promotion comes at an interesting time. Despite reaching a lofty $10 billion valuation in 2014, Dropbox has faced some questions around its growth since then, especially as the company started shifting its focus to business customers.

Two years ago, Dropbox unveiled its "Home for Life" strategy that would make it the central hub for consumers' daily activities. But the company soon ditched that plan, shutting down its email app MailBox and photo app Carousel, and instead launching Dropbox Enterprise, which targets big business organizations, last year.

"Users are really using Dropbox for collaboration and productivity. And that's been the focus of our roadmap over the last 18 months or so," Agarwal said.

Those consumer roots put Dropbox in a good position to win the business customers, Agarwal argues. Because of its simplicity and ease-of-use, Dropbox is already the most popular file storage app among regular consumers, reaching 500 million registered users, and that's appealing to business customers as well, he says.

"The traditional view is that it's super different to build for a 20,000-person company versus a 20-person company, but I think that's a false assumption. I think in today's market, those two segments actually want the same solution," he says.

Better approach

It remains to be seen if Dropbox's popularity in the consumer space will translate to success in the enterprise as well. Business customers typically ask for more customization, require stricter regulatory compliance, and require longer sales cycles with more hands-on assistance.

But Agarwal says because Dropbox is so popular among smaller teams within companies, it then becomes easier to convince CIOs to make bigger purchases that lead to company-wide deployments. Dropbox has also been bolstering its security and compliance features to make it more enterprise-ready.

That's opening up opportunities in the more highly regulated industries. For example, after becoming HIPAA-compliant 9 months ago, Dropbox has been able to sign one of the largest healthcare providers in the East Coast for a 1,000-plus user deal. Agarwal declined to share any specific metrics around active users or the number of large enterprise deals, only reiterating that it's used by 200,000 business customers, including Adidas, News Corp., and HP Enterprise.

This is the latest in a series of executive changes at the company as it prepares for a possible IPO next year: it has replaced its marketing chief, CFO, and now CTO in the past 6 months. The company has also become more conservative with its spending, reducing employee perks and planning a smaller-scale customer event than last year's Dropbox Open conference, which featured high-profile guest speakers like Salesforce CEO Marc Benioff, HP Enterprise CEO Meg Whitman, and Apple SVP Eddie Cue.

Combine that with Dropbox's huge scale and consumer-friendly approach, and Agarwal believes he has a good chance to catch up others in the enterprise.

"Our scale and unique approach allow us to make a big dent in this space," Agarwal said. "Building a consumer software for the enterprise is the right way to go and I think a lot of companies still don't quite have that approach nailed down."