Every year since 2004, ReadWriteWeb has selected a best "little company." These are small companies (loosely defined as less than 100 employees) that have had a big effect on the Web over the calendar year. Last year we chose Tumblr, which experienced extraordinary growth during 2010. In prior years we've given this honor to Aardvark (2009), Zoho ('08), Twitter ('07), YouTube ('06), 37Signals ('05) and Flickr ('04). Many of those companies went onto much bigger things, either through acquisition (Flickr, YouTube) or by ramping up independently (Twitter, Zoho).

This year there were a number of worthy contenders for Best LittleCo. Square, Evernote, Flipboard, BetaWorks, SoundCloud and Tumblr (again) have all had cracker years. So our winner must be something pretty special, right?

Indeed, this year's Best LittleCo has become the leading service in a rapidly growing market: the Consumer Cloud. Our Best LittleCo is Dropbox, the popular file backup, sync and sharing service.

Other startups were earlier to launch with a cloud service for files, but since launching to the public in September 2008 Dropbox has gone from strength to strength. 2011 has been its best year yet, as millions of consumers turn to online file management to access their business and personal files across devices.

We also named Dropbox as our #2 Consumer Web Product of 2011, behind only Google's Chrome browser.

Dropbox has 87 employees, according to its About page. The company was founded in 2007 by Drew Houston and Arash Ferdowsi, two MIT students "tired of emailing files to themselves to work from more than one computer." It now claims to have 45 million users across the globe.

Earlier this year, Dropbox was named 5th in a list of the The World's Most Valuable Startups, with an estimated $4 billion value. The only 4 companies ranked above Dropbox were (in order of valuation): Facebook, Zynga, Groupon and Twitter. None of those 4 would qualify as a LittleCo, using our benchmark of 100 employees.

Why Did Dropbox Become So Popular?

Dropbox has successfully tapped into two huge trends on the Web over the past few years:

1. People now access the Web on multiple devices; including the traditional PC, smartphones, tablets like iPad, Netbooks and more.

2. As Web-connected devices proliferated, it became increasingly useful to use cloud computing services for file management.

Other startups have attempted to tap into this huge market opportunity as far back as 2006, when ReadWriteWeb named Sharpcast (now known as SugarSync) as our Most Promising Company. Dropbox also competes with the big cloud computing players, such as Microsoft, Google and Amazon.com. Its smaller competitors include the afore-mentioned SugarSync, as well as Box.net, Ubuntu One and Wuala.

Although Dropbox is the market leader, it still has work to do. Our ReadWriteCloud team recently compared Dropbox's collaboration features with competitor Box.net - and found Dropbox wanting. Dropbox has also experienced some growing pains this year, with security issues and an unpopular change to its Terms of Service.

Overall though, Dropbox has firmly established itself in the minds of millions of consumers as the number one online file management service. Its regular users (including this author) love Dropbox's simplicity and intuitive user interface.

Do you agree with our choice for Best LittleCo of 2011? If not, tell us in the comments who you would've chosen.