It's a good move for Microsoft, but it's not entirely obvious if this is a good move for dropbox or the storage ecosystem.
For example, Box is also working with Microsoft: http://content.box.com/box-for-office-365 -- I would expect integrations with other platforms in the future as well. If the consumer experience is driven around Office apps rather than around the Dropbox app, then at one point the cloud storage solutions truly become interchangeable.
> then at one point the cloud storage solutions truly become interchangeable
I remember one famous Steve saying to Drew Houston that Dropbox was a feature rather than a product. I'd say the need for such a thing as Dropbox made "Dropbox as a standalone product" possible, but in a world where every service starts having its own integrated "cloud" backup service, storage and sync do start looking like a feature.
> Embrace: Development of software substantially compatible with a competing product, or implementing a public standard.
> Extend: Addition and promotion of features not supported by the competing product or part of the standard, creating interoperability problems for customers who try to use the 'simple' standard.
> Extinguish: When extensions become a de facto standard because of their dominant market share, they marginalize competitors that do not or cannot support the new extensions.