It's no surprise that Box, the content management and collaboration company born in the cloud, has met with so much success among small-to-medium businesses. The service provides SMBs with the kind of enterprise-class content capabilities that they didn't have the money and resources to deploy before.
But Box is now winning over major enterprises at a healthy clip, taking over content management chores for companies like Procter & Gamble, AARP and Schneider Electric - helping them support far-flung mobile workers and partners who need to access and work together on shared information.
In this installment of the IDG Enterprise CEO Interview Series, Box cofounder and CEO Aaron Levie talked with Chief Content Officer John Gallant and CITEworld.com editorial director Matt Rosoff about what's driving Box's success. He discussed Box's emergence as a key layer in the evolving cloud "stack" and why it will be so tough for traditional content management players to keep up with Box. Levie talked about why Box is laser-focused on making life easier for mobile users and how the company is going to be tailoring its offerings for vertical industries. He also explored the concept of the new enterprise app marketplace and explained why he's excited about 'wearable' computing.
John Gallant: Explain the mission for Box.
Aaron Levie: We have a fairly broad mission that translates into what we do and how we help customers every day. The first thing that we identified was that enterprise software was just far too complex to help people with their everyday business problems. So our mission is to build technology to make it really, really easy for people to get their jobs done. By doing so, you end up speeding up business. You end up allowing people to share their ideas and their information faster, and we think that creates much better companies and much better outcomes for businesses, whether that's in healthcare or finance, or in the pharmaceutical space or in education. There are a lot of exciting ways that these technologies are used.
We've tried to build a product that really resembles a lot of the innovation that you get from the consumer Internet around sharing information. How do you collaborate? How do you work from any kind of device? But we do that in a way that ends up being secure and able to be integrated to enterprises of any scale. That's really where we end up differentiating, where we can bring the value that usually has been locked in the consumer space. We unlocked that for large enterprises.
JG: When we first met a couple years ago now, you guys, as I recall, were all about enterprise content management. Now you're enterprise content management and collaboration.
AL: The evolution that we've gone through is, in 2005 when we started the company the entire premise was it should be really easy to share and access your files and your data from anywhere. Then in 2007 we decided to focus that entirely in the enterprise market. Ultimately the space that was being disrupted was the enterprise content management space. How we were disrupting that was, on one hand, enabling the technology to be used by an order of magnitude more businesses because it was cheaper and faster and simpler to implement. The other piece was that all of a sudden everybody in business had way more people to share with. You have contractors and clients and vendors and partners and colleagues, and so it wasn't just about how you manage the content. It actually really turned into how do you share and collaborate and move information throughout the business to get it to the right people? What we do today is, we think, a pretty neat mix of how do you collaborate and how do you manage information in one simple platform that works both for end users and for IT?
JG: There are a lot of companies in content management. There are a lot of companies in collaboration. What makes you guys unique?
AL: The way that we've traditionally seen this space is there's a little bit of a bifurcation in the ecosystem. You tend to have the consumer companies which build technology that makes it incredibly easy to get access to your files and your data from any of your devices. In the enterprise space you have incredibly complex yet secure technology that helps you manage your information at scale. What we haven't seen is a lot of companies that can blend both of those worlds together. We try to bring the ease of use and the elegance that you see from consumer technology into the enterprise in a way that allows large-scale organizations to implement the technology very easily.
One example is we work with Schneider Electric. They're deploying Box to 50,000 employees. That's the kind of customer where we are uniquely suited to serve just because of that mix of end-user simplicity and enterprise scale that really is unmatched at this point. We will continue to innovate along that dimension of fusing those two worlds together. At the same time, we're also building a fairly differentiated platform. We don't think it's just about how do you synchronize or how do you share or how do you store your data, but rather, how do you use your content in a variety of contexts that you can't get from any other kind of platform? We work with 17,000 developers that have built applications on top of Box, whether that's an internal application for a large enterprise or a commercialized partner that's building apps. We have a horizontal platform that makes it really easy to organize, manage and share data within all of these environments.
JG: Speaking of that platform approach, I want to talk about the Box Partner Network, which was announced not too long ago. In reading about it I was struck that someone had written that you want to be the repository for the entire cloud. Is that an accurate description of the mission?
AL: Some nights. It depends on where the strategy session ends up. But I think we want to certainly be the place where document and unstructured content goes. I think we are realistic. I only have a half-way baked reality distortion field, so while we absolutely would want to be that platform, we're realistic in thinking that there are going to be lots of ways people manage and store their information. We would certainly want to be the most enterprise viable and the most scalable platform. But we know that data is going to go to a lot of different environments. One of the benefits of using Box, however, is that when you centralize your content in one place we build extensions and we work and we have partnerships with all of the main SaaS services out there, whether it's Salesforce.com or Jive or NetSuite or Zendesk. So once you store your content within Box, you can then extend that out to many third-party applications that you would want to use that content within. We're very focused on how to become the central hub for your content, but we understand that there are going to be a lot of other forces in the ecosystem that we have to compete with.
Matt Rosoff: You mentioned Schneider Electric, and I'm curious. When you go into a big account like that, what are their biggest concerns? What are they trying to solve and why are they choosing you as opposed to a competitor? What do you tell them to close the deal?
AL: Let's look at a couple different use cases. Schneider is incredibly neat because of their scale. Think about a company that has 140,000 to 150,000 employees globally distributed but at the same time they have an incredibly innovative IT strategy. They want to get out of managing data centers. They want to get out of managing infrastructure for all their technology. They're big customers of Salesforce. They're big customers of Tibco and Tibbr and a bunch of other cloud services. Their view is -- how do they enable employees to have best-in-breed technologies that speed them up and help them accelerate but that are, at the same time, going to be secure and compliant for an enterprise of their size? Look at that problem set where, okay, the technology has to be easy enough for end users, it has to support a multiplatform world, they're not just a Microsoft shop. They're not just an Apple shop. They have a diverse array of technologies. The technology needs to be secure enough that they can scale it out and have confidence that they have visibility and know what's happening to their data.
When you think of all those different dimensions you actually are constantly reducing down the set of companies they can work with. And then you throw in a dimension like they want to build custom applications on top of their cloud service so they have one central data repository, but they can leverage that data for unique applications in their business, whether it's the documentation workflow, whether it's somebody doing repairs out in the field and needing to pull up information. When you look at that entire problem set, it ends up being Box. It ends up occasionally being Microsoft. But there are few other providers that have really been able to produce that kind of scale of an offering. That's what we've been spending eight years doing.
One of the unique things again about our situation is we've spent more time on this problem than any other cloud provider in the world, because we've been doing this since late 2004. We just had to think about the problem and think about the platform more than anyone else, which gives us a pretty significant advantage on a lot of large enterprise companies that are just getting into this or consumer companies that are kind of moving up-market. When you compare us to a company like Microsoft, the challenge with Microsoft is they're not really telling a multiplatform story. They generally are always favoring their platforms and their ecosystems first, which is not a very customer-centric view of the world. It's a very Microsoft centric or inwardly centric view of the world. It's a very diverse landscape out there, which means that enterprises need technology that's going to sit in between all those different platforms. We have a unique business model that is entirely aligned with supporting lots of platforms. We make more money the more people can use our product in their organization. Whereas, if you're Microsoft, you make more money based on how many services that are based on your platform you can sell into an organization. We just happen to be solving a different dimension of problem that is more suited for how enterprises work today.
MR: On the flip side of that, when you go into a big company like Schneider, what's the thing that they push back about the most? Is there any particular area where they say -- wow, you're close, but you don't have X?
AL: I think that for some enterprises it's less that they're not adopting something and more about the time frame or the timeline in which they're adopting this type of technology. Often it will be the case that an enterprise is not able to move their entire business to the cloud or it might not be the thesis to move their entire business to the cloud. But rather they want to move net new workflows or use cases to the cloud first.
A great example is a pharmaceutical company that just implemented 10,000 iPads might not be trying to reorient every business process to the cloud. But because of those iPads it means that their sales teams now need access to critical content from those devices. That's a proposition that will be very cloud-first within that organization, even though maybe the entire business is not going to be moving to the cloud yet. In those kinds of environments we end up having a slightly different conversation with customers. The conversation is less about how do we solve every problem in your business, and more about how do we help you solve some of these new use cases that have just emerged in the past couple of years? We're obviously fine with either one, because we believe this is certainly a long-term game and if we can get into an organization via their iPads or via the teams that need to be collaborating, we believe that's a great entry point into helping that organization solve their broader content problems.
JG: When you go into those big enterprises are you replacing something else or complementing something that they already have? I mean, are they getting rid of existing document management systems?
AL: There are two types of customers in this case. The really small or medium size business often will be replacing, or in many cases they never even had existing technology to solve it. If you're a 500-person company, you can basically comprehensively get out of ever having an infrastructure. We're actually a good example of that. We use Workday, we use NetSuite [financials], we use Zendesk [customer service software], we use Zuora [billing and payment], we use Box, we use Gmail. We don't have internal IT servers supporting our employees. We're seeing this more and more from companies in the hundreds to thousands of employees range. In that case we absolutely are reducing the need to buy file servers or on-premise collaboration technology.