Is the tide turning for Box?
Two announcements made last week by Box, the file sync-and-share company, suggest that the company’s recent string of bad luck may be turning.
First, and most importantly, Aaron Levie announced on the company blog that GE has signed only Box in a big way:
I’m incredibly excited to share that General Electric has chosen Box as its corporate standard for content sharing and collaboration. We’ve been working with GE leadership for nearly two years to bring Box to their organization, and we’re delighted to announce this strategic relationship.
Aaron positioned the relationship between the two companies as being driven by a new model of computing, based on a better way to share information across a 300,000 person organization operating in 170 countries. As he characterized it, GE is putting people at the center of their IT strategy, instead of thinking of IT from the backend systems outward.
I will respin that line, although I agree with the ‘people first’ sentiment. We are in a people first, mobile first, cloud first, world of work, and the heart of that is the distributed core architecture: the virtual file system that allows us to share across devices, across working groups, across companies.
Box is only one of the many vendors contending to be the leader in the battle for this, perhaps the single most important struggle going on in enterprise software, right now. And in recent weeks, the market mood for cloud computing companies burning a lot of money to buy market share has cooled (see Box can’t IPO, so now what?), despite the fact that six months ago, the market liked that behavior. And the GE deal shows what Box is spending that money on: building a deep knowledge of the needs of the very largest companies, so that a hundred more of the world’s largest companies can sign on, and presumably in less than two years.
But as I said in Box can’t IPO, so now what?, there is a great deal of competition from well-established enterprise software vendors with products like like Google Drive, Microsoft OneDrive, Apple iCloud, Citrix FileShare, and EMC Syncplicity, as well as start-ups like Dropbox, Hightail, and Egnyte, and well-established security-oriented competitors like Intralinks. This is going to be a chaotic mess for the next few years, until a market consolidation changes things.
After the GE announcement, some of those big players — like Microsoft for example — might be considering another play for Box, and that would probably be smart. Which brings me to Box’s second announcement: Box Notes is coming out of beta and rolling out to all users.
Box Notes is a lightweight web co-editor, much like Google Docs, but well-integrated to Box-based sharing.
And Box is the sort of application that could increase the migration away from Microsoft Word at organizations like GE, where the complex features of Word may be seen as an impediment to getting things done in 90% of the cases where it has historically been used. And according to the help documents, there are imitations at present: like not being able to create new notes on the mobile interface, and apparently no way to add an image to a Note that I can find. But I am certain that Notes will evolve in the months to come, and the Pareto Principle will hold: 10% of the feature will work in 90% of the cases.
A few more announcements like the GE deal and the rollout of Notes might blow away the fog of uncertainty for Box in the minds of investors, and might turn the tide for the IPO. In the next four weeks or so, Box must disclose its financial situation, because of the terms of the pending public offering. We’ll have another chance to see if the status of the company’s finances have turned away from the $168.6 million in losses from 2013 on $124 million in revenue.
Of course, an acquisition by Microsoft or IBM would be a very different sort of tide.
