eWEEK content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.
REDWOOD CITY, Calif.—What a month December turned out to be for Box, the cloud computing content-management company that continues to gain new enterprise clients and recently inked partnership deals with IBM and Salesforce.com.
In a wide-ranging interview with eWEEK at Box’s new headquarters here, CEO and co-founder Aaron Levie discussed how traditional, data center-focused IT is changing and what he considers to be an inevitable transition to the cloud. (Box moved from Mountain View, a few towns south in Silicon Valley, also last month.)
From humble beginnings in 2005, Box now has 54,000 customers (including such blue-chip companies as Coca-Cola, Eli Lilly, GE, the NBA and Procter & Gamble), and 1,300 employees worldwide including 950 at its shiny new headquarters, which includes a second adjacent building it’s currently leasing out to startups. Customer use cases range from Adele’s record label, which used Box to help distribute the singer’s latest album, to GE, which uses Box as its primary collaboration tool.
Levie said the big turning point for Box came in 2007 when he and co-founder Dylan Smith decided to “pivot the company” to focus 100 percent on the enterprise.
Technalysis Research analyst Bob O’Donnell said Box was smart to focus on the enterprise. “You have companies like Dropbox and Google playing in both consumer and enterprise, but Box knows what business it’s in.”
One of the first big use cases in the enterprise was Procter & Gamble. The marketing department at the consumer goods giant wanted to share files with its external ad agency.
“It’s amazing how much the world has changed,” recalled Levie. “If you go back seven years and you were in the marketing team at Procter & Gamble and you wanted to share a site, you had to call up the IT department and have them open up the firewall and create credentials for your external partners. That whole process could take two to three weeks. Every organization in the world had that process if you were in marketing, sales or product development—if you wanted to share externally, you had to call IT and go through the process.
“But that’s not how business works. In business, you want to be able to share the file right now. So what ended up happening is they would send files via email. Procter & Gamble was pretty savvy and figured out: ‘What if we deployed Box more broadly throughout the organization and used it to share files with partners so we could collaborate’?”
Initially, Procter & Gamble used Box as a departmental solution for the sales, marketing, product development and finance teams. “The growth came from the ground up,” said Levie. “The IT person for one of the teams might have supported us, but we would never have a conversation with the CIO.”
That began to change about five years ago with the rise of mobile. “You had companies standardizing on iOS or Android—a whole new set of mobile devices—and the cloud was starting to get more mature with Salesforce.com, Amazon Web Services, Google and even Microsoft finally starting to talk about the cloud, and that led us to have much more strategic conversations with the CIO,” said Levie.
Box Aims to Become More of a Platform Company in 2016
CIOs were starting to realize the world was changing with the rise of bring-your-own-device and mobile technologies, in general, that let employees work from any device in or out of the office. “It was clear the enterprise was going to be much more about consumer-grade solutions for end-user productivity and applications,” said Levie. “That led to the use of apps like Workday, ServiceNow and Office 365.”
An Enterprise Platform Strategy Emerges
It also created an opportunity for Box. “In that new architecture, what is the content-management platform?” asked Levie, rhetorically. “The traditional content-management players like Sharepoint, Documentum and Filenet and EMC on the storage side—those players didn’t adapt quickly enough to being a cloud solution, so Box started to make more sense as the enterprise-wide platform for modern content management.”
Box has been riding that strategy of being a content-management platform designed to solve everything from end-user file sharing to business collaboration, ever since. Levie noted that another key aspect of the strategy is keeping Box as an open platform on top of which enterprises and third parties can develop.
“A CIO moving his or her company to the cloud needs a content-management platform that works across your business—that’s the role we’re filling in the enterprise,” he said.
Security as Cloud Computing’s Trump Card?
While the adoption of cloud computing has been steadily growing, the on-premise data center is still well-established in most enterprises. Security is often cited as one of IT’s top concerns when it comes to moving to the cloud, but Levie said that attitude is changing—or should be.
“Security concerns were an inhibitor two or three years ago, but that was mostly for perception reasons rather than architectural,” Levie said. “Now, I would say one of the biggest accelerants to cloud adoption is the fact that enterprises in every industry are realizing that they do not have the ability to secure all their data in their on-prem environments. What’s happening is they are experiencing mass data leakage because the tools their employees are using do not have the analytics, monitoring, auditing and data-loss prevention capabilities on them. As a result, we are having conversations with every major retail bank, every major investment bank, life sciences firms and nearly every major government agency because they are recognizing that Box is going to be a more secure place to manage their content than on an on-prem environment.”
There is, of course, no ultimate security architecture, and Levie conceded that even the major cloud providers could be breached. But he argued that cloud computing is a much better investment than an on-premise data center.
“If you’re a CIO who wants to last and be innovative in the future, you are not going to make new investments in on-prem IT models; it just doesn’t make any sense,” Levie said. “All of the momentum is in the opposite direction. A couple of years from now there won’t even be software companies investing in their products for the on-prem world, and at some point, you’re not going to get any innovation there.”
Box Aims to Become More of a Platform Company in 2016
What’s Next for Box?
In 2016, Box will move to become more and more of a platform company, Levie said.
“In the past, what we meant by platform was that we were going to be integrated with the major applications you were using so you can get access to content anywhere. That’s still a core strategy and a perfect example was the deals we made with Salesforce.com and IBM [in December 2015]. But to really be a platform company, you need to have developers and customers build applications on top of your platform where you are completely behind the scenes.
Technalysis Research’s O’Donnell said enterprises are having a difficult time developing and managing custom mobile apps. “We’ve had PC apps for years; mobile is different,” said O’Donnell. “Integration behind the firewall with mobile devices and connecting to the VPN gets very complicated. If Box can provide a platform for apps that makes the integration and security easier, that will be well-received.”
Levie said a big goal for 2016 is to help more companies transition to digital.
“Going into next year, a big growth driver is that we’re going to power a lot of the digital transformation that our customers are experiencing. If you’re a financial firm and you want to have a new digital experience around interacting with your private wealth clients, we want you to be able to build that entirely around the Box platform,” he said. “If you’re a hospital and you’re delivering a new tele-medicine or tele-health app, or you’re in retail and creating a new supply-chain portal, we want it to be on the Box platform. Anywhere where you are collaborating, sharing or working with content inside an application, Box should be able to run completely behind the scenes.”