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May 7, 2015

Will Box thrive as a storage ‘platform’ company?

CEO Briefing: Box CEO Aaron Levie on data residency, getting financial services onto the cloud and data centres.

By Jimmy Nicholls

Aaron Levie, the founder of the storage firm Box, is enjoying life at the head of a public company.

The 29-year-old’s decision to go public earlier last year ended several years of speculation as to when it would make its initial public offering (IPO), the rumours following years of interest in the enterprise-facing storage firm.

"When we started coming out here about two or three years ago the question used to be when are you guys going to go public?" Levie said in a visit to London this week, with obvious relief that he would no longer have to field such inquiries.

But plenty of other questions are still being asked of Box. Formed more than a decade ago in Mercer Island, Washington, by its founder’s own admission it has graduated from being used by individuals and departments to the stage where enterprises are considering rolling it out across the board.

At the same time Box is trying to orient itself away from being a mere storage company towards being a "platform" company – a word that peppered Levie’s presentation.

"For the past ten years we have been building up a product for organisations to be able to share and collaborate from anywhere," he said. "What’s happening more and more is we’re recognising it’s the [external channels] that are going to be driving innovation for our customers."

That innovation will be driven not merely by the creation of a "platform" through which customers can, in Box’s words, "collaborate, annotate, preview and in some cases manipulate" things. Also core to the strategy is customising their products to the needs of specific industries, as well as securing them.

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Industries which both these trends are pertinent to include finance, which by Levie’s own admission has been reluctant to adopt technology at the pace of other sectors. "Financial services has been slow to adopt the cloud," Levie said by way of example. "Mostly because of an unclear regulatory environment."

But sectors do not operate in vacuums, and technology upgrades in customer service from transport and retail are taking their toll on banking, as CBR recently reported. "The market has in the past year become a lot more ripe for financial services," Levie said.

As such earlier this year Box announced the beta for its Enterprise Key Management tool, which places control of the keys in the hands of the customers. Such a move will be welcomed by those in the City of London, and may convert more sceptics to cloud storage elsewhere.

Storage wars

As storage is a lucrative space it has drawn many entrepreneurs to Silicon Valley. Companies as big as Google now offer it as part of a suite of online tools, a factor which perhaps informed Levie’s decision to go down the platform route.

"Our overall philosophy is we have to provide the best platform for where you want to move your content," Levie said, mindful of such competition. Asked how he compared his company to Dropbox he replied that Box’s key asset was its focus on the enterprise – a field others are probing alongside consumer-facing products.

As well as battling the competition Box will also have to face impending regulations that mandate that data must be kept within the nation where it is collected, most obviously in Europe.

"We’re very sensitive to some of the data residency requirements that are emerging," Levie acknowledged. He added that his firm plans to build a data centre at least in the cloud within the next 12 to 18 months.

Yet despite these worries, Box appears in rude health. Levie may not be as rich as some of his peers (according to Forbes he owns 3.4% of the company, and as of the start of the year was probably worth $90m), but he has a plan to make his firm more modular and adaptable.

Is Box still a start-up? Levie likes to think he runs his firm like the old days. The market will see if he’s right.

Image credit – Stuart Isett/Fortune Brainstorm TECH

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