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Cloud Computing

Box Fighting On in Battle Royal for Collaboration Crown

Four months after formally announcing plans to float, Box might still be on that long and winding road to an IPO but the company remains a machine for growth. The enterprise file sync-and-share platform provider now has 27 million users, up from 25 million three months ago, and 240,000 organisation customers, up from 225,000. Those numbers suggest that Box is growing both its individual and corporate user base at a rate of 7-8% per quarter.

That rate might not count as hyper-growth but it gives Box a shot at being able to ‘land and expand’, that is, gain a foothold in accounts and then grow its presence over time: the classic formula that has seen cloud companies like Salesforce.com prosper. Recent wins included a notable deal to supply 300,000 users at GE and a revised S1 regulatory filing earlier this month suggested the company is taking a larger share of customers’ wallets while controlling its own costs.

Box raised eyebrows by revealing an enormous marketing investment amid losses when in March it originally filed documents in advance of a floatation. However, it has since made progress and it retains a powerful, if intangible, advantage in that its services are undoubtedly beloved of users. Like Salesforce, Splunk and others, this means that it can get users to evangelise on its behalf and grow virally through an unpaid army of passionate advocates.

In an announcement today, Box said it will provide unlimited storage for all business customers. As for the rest of its users, some watchers feel that the number of non-paying customers will become intolerably burdensome but in a phone call, Box EMEA general manager David Quantrell said that ‘freemium’ conversions, where non-paying users become paying customers, are still generating significant revenue.

Box also today announced integration with Office 2013 and Office 365, part of its policy of being able to surface Box from within leading software tools.

The sector remains complex and fragmented with newcomers like Amazon, which launched its Zocalo service last week, joining a full house of rivals in a scenario that is the very definition of the ‘frenemies’ model where rivals both collaborate and compete.

Quantrell remains sanguine about the competition though, believing that Box’s enterprise focus and file-type independence will see it prevail.

“It’s further acknowledgment that there’s a real challenge in this space that companies are trying to address,” he told me.

The smart money now appears to be on Box floating after the summer lull. Certainly there has rarely been an enterprise software segment with so many runners and riders. The question is, how many will have the endurance to survive and prosper.

 

Martin Veitch is Editorial Director at IDG Connect

 

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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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