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Aaron Levie doesn't want his company to get boxed in

Juan Carlos Perez | Sept. 10, 2014
When Aaron Levie co-founded Box in 2004, he envisioned how businesses would benefit from cloud storage and file sharing -- improved data access and collaboration -- and, since few vendors grasped this, Box cashed in when this technology got popular years later.

Then there was the launch of Box for Industries, a program to tailor and tune the company's products for specific vertical industries. Box will target a dozen verticals, but will start with retail, health care, and media and entertainment. Box for Industries will combine Box technologies, third-party, industry-specific applications and implementation services from Box and partners, including Accenture.

"Box is one of only a few companies in this space with a dedicated vertical strategy, and that's a very good thing," Hughes said. However, the vertical industries undertaking is daunting. Each vertical sector has a long list of particular business needs, IT challenges, security concerns and regulatory requirements, so Box will probably need to seek out partnerships to complement offer comprehensive expertise, he said.

As Box broadens its horizons and builds out its capabilities to manage business processes, content and documents, it will have to balance that push with one of the keys to its success so far: its software's ease of use.

"That won't really be clear until [its] customers and Box understand how far they can push the next set of capabilities before needing to add more to them," said Maureen Fleming, an IDC analyst, via email. "They've done a pretty good job of layering in sophistication while maintaining ease of use. Box is unlikely to pursue a path that would change this dynamic."

While Box embarks on this evolution, it is also dealing with questions about its finances, which CIOs pay attention to when deciding whether to do business with a vendor, especially a small one, that will handle critical processes and data.

In March, the company announced its intention to launch an IPO, but it hasn't pulled the trigger yet. The perceived delay has led financial analysts and tech industry observers to question whether the company isn't as confident as it once was about its prospects as a public company. Levie has said in response that Box never had a specific date in mind, and that it will go public when the time is right.

The IPO registration papers Box submitted to the U.S. Securities and Exchange Commission also raised red flags in the eyes of some, especially the company's blunt acknowledgement that profitability isn't on the horizon, that its sales and marketing costs have been very high so far with respect to its revenue and that only 7 percent of its about 25 million end users pay for the service.

Still, the Los Altos, California company, which has about 1,000 employees, enjoys strong support from its backers. It raised $150 million this summer, on top of the more than $300 million investors had previously pumped into its coffers. And it has big name customers, like GE, which is rolling out Box to its 300,000 employees globally, and DreamWorks Animation, whose globetrotting CEO Jeffrey Katzenberg made a stop at BoxWorks, where he bantered on stage with Levie, and, in between jokes, unequivocally endorsed the product.

 

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