Box, the file sharing and cloud content management company, is capturing huge value from the digital transformation of content within enterprises. It strives to be the hub for all digital information within and across companies and has accelerated digitization of business workflows for many teams and corporations.
We have seen consumer-oriented startups being the pioneers and poster children of the digital innovation that is changing consumer behavior since the internet boom in late 1990s. The enterprise world is often one step behind the consumer sector in adopting various innovations but has progressed quickly in digitizing information to reduce costs and improve efficiency. We are seeing a wave of companies creating value in the digital enterprise space.
Box was started in 2005 as a simple file storage product for individual users. There were several other startups working on the same idea at that time, including Dropbox, Synplicity, etc. Box quickly pivoted to focusing on business users as they saw traction among businesses for cloud storage and file sharing. The move quickly paid off as IT felt compelled to tailor to end user needs and adopt cloud software at a company level. Such phenomenon, called “consumerization of IT”, was happening across SMBs and enterprises around the world. Box was one of the early pioneers of the movement and has largely benefitted from it. The ecosystem, comprised of a dozen key players (e.g. Dropbox, Egnyte, Google Drive), has done a great job educating the mass market and bringing awareness to innovations in the file sharing/sync space. Box is a winner in a space that has won in the digital era.
So why was the content management space ripe for disruption? And how has digital innovation changed the landscape? Moore’s law states that processing power for computers double every two years, indicating that storage and computing becomes bigger, faster and cheaper over time. As the price of storage dropped drastically for the last decade, consumers and businesses increasingly stored more and more data digitally. The rise of search, led by Google, has made it easier to extract and use large amounts of data in various formats. Cloud computing has enabled information to be stored safely and cheaply and be served to multiple devices on the web and mobile. Box was born a decade ago as all those trends converged.
To differentiate itself as the top choice of business cloud content management, Box launched enterprise-specific features, including online real-time editing of Microsoft Office, analytics for management and administrators, commenting tools, encryption, etc. It has been successful in building additional functionalities around its core business of file storage and sharing. The file storage technology itself has become commoditized over time as more competitors entered the space and margins continued to drop. To win in the digital era, Box knew it has to tailor to the specific needs of business users beyond just file sharing.
Another strategy Box has deployed to maintain its winning position is to integrate with other popular enterprise cloud applications, such as Yammer, DocuSign, etc. Users can easily store signed documents in Box or invite others to collaborate on Box documents using Yammer. This makes Box an important part of the modern enterprise workflow and thus a lot harder to replace than a standalone app.
Box went public in early 2015 with current market capitalization of $1.65 billion. The company boasts over 50,000 customers and annualized revenue run rate of $300 million. Box has grown from a school project by two college students and succeeded in the digital era as it rides the wave of digital content management and continues to implement innovative enterprise-specific strategies.