Box: Breaking Through the Clouds in Japan

Strong security could help the online collaboration firm to penetrate a tough market

Two recent articles on IDG highlighted both the changes and challenges that are unfolding as cloud collaboration and storage provider Box prepares for its highly anticipated IPO. In December of last year, the company co-founded by CEO Aaron Levie announced that it had received a $100mn investment from a group of companies, several of which were Japanese, including the trading giants Itochu and Mitsui. This Japanese capital presence, combined with the fact that Japan is still arguably the most technologically advanced and technologically obsessed nation in the world, must have made Tokyo a logical place for Box to open its first office in Asia. On May 20, in a grand function hall in an exclusive downtown Tokyo hotel, Levie played host to 500 guests (even a famous member of the Japanese parliament was in attendance) and press who were eager to find out what plans Box had for Japan.

Box is primarily aimed at corporate customers so the official launch of the Japanese site was made even more attractive with the announcement at the press conference that an impressive and diverse range of Japanese companies had become Box clients. Among the most notable users of its services were: SanrioEntertainment, which owns the rights to the unmistakably Japanese “Hello Kitty” characters; DeNA, the dominant social online gaming site in Japan;, the third largest chain of convenience stores in the country; and Waseda University, which ranks as one of the most prestigious in Japan. Aside from highlighting this impressive list, Box also used the launch of its site as an opportunity to announce major partnerships it has secured with the renowned Japanese firms Konica Minolta, Cybozu and, most notably, NTT Communications. NTT is the largest telecommunications company in the world in terms of revenue, and as such has incredibly deep pockets and technological resources to work as part of what Box calls its “platform integration partner network”. On both projects it has developed with Konica Minolta and NTT, Box stresses the importance of safety and security: aspects of working with online data storage that seem to have been a hindrance to cloud acceptance in the corporate world in Japan up until now.

The managing director of Box’s operations in Japan, Katsunori Furuichi, who was previously president and CEO of VeriSign Japan, highlighted that within Japanese industry, the use of cloud services is still relatively small. He went on to say that the key to increasing the number of companies using cloud services was to enhance the faith that companies have in the security of storing sensitive data in the cloud.

In a posting on the Box blog, CEO Aaron Levie seemed more than a little impressed with the way the launch went and, speaking to him briefly on the day, I also felt that his enthusiasm for Box’s future in Japan was as contagious as it was genuine. During his speech, he promised to “customise the services of Box to the unique demands of the Japanese market” and also to build strong alliances with the companies that use Box’s services.

A recent Gartner report (“2014 CIO Agenda: A Japan Perspective”) stated: “In 2014, the most significant difference in technology priorities for CIOs in Japan is the increased importance of cloud.” Another pertinent fact related to Box is that that according to a study by Japanese IT firm Startia in July of last year, Box only had a 1.5% share of the online storage market (for individual users) in Japan. If both are indeed correct then there could well be a lot of room for expansion in Box’s share of the cloud storage market in Japan in the coming months.  


Ben Olah is originally from Sydney but he has lived in Japan since he graduated from university. He says that, even after having lived there for many years, he never ceases to find Japan and its people to be a source of amazement.