Recently, I was involved in a closed-door discussion with Box & Microsoft partners and enterprise buyers, where some strong and, at times, fiercely opposing opinions were shared. As an analyst, these discussion types are pure gold, closed door, non-attributable, and Chatham House rules. In respecting those rules, I will not mention who was involved or even allude to their identities, but I will share some common themes as I think they are valuable topics for our industry to discuss.
In the red corner were those that stated that if you are a well-established customer of Box, there was no logic in migrating to Microsoft. In the blue corner were those who boldly said there was no logic for anyone staying on Box.
1: Migrating to or from Box to Microsoft
Digging down a layer or two, though, the discussion was much more nuanced. Firstly, those with enterprise licenses for Microsoft are paying more than enough for the privilege, and dropping Box made sense; for sure, some firms are doing just that. At Deep Analysis, we know of several major Box customers who are making the transition and others in the planning stages to make a move.
2: Box and Higher Education
Box and universities were raised (as it has in the past similar discussions). After promising universities unlimited storage, that deal was revised (no more unlimited storage), which left a bad taste in many academic buyers’ mouths. Those accounts are ripe for Microsoft to pick. Indeed pricing and price transparency were and are usually important topics of interest to partners and buyers, and rightly so. It’s not so much about which is cheaper; instead, it’s a trust issue to resolve. Is this the right price, and will it remain consistent?
3: Microsoft Byzantine Pricing
No matter how good the deal is on offer, Microsoft is a complex beast. Be that labyrinthian style pricing matrix or being pinged around from account manager to account manager without resolution. Box in this round won by a TKO; even the firm’s detractors praised its focused support and pricing transparency. There was also little to no disagreement that Box is much easier to manage, administrate, report upon, or develop versus Microsoft. Microsoft’s recently announced PAYG Syntex pricing is an honest attempt to address some of these issues, but the complexity remains.
4: So what is Syntex for exactly?
It should be said that Syntex is new, and it will take time for the market education to work its way through the system, but I confess I was initially surprised at the lack of enthusiasm in the room. The promise of Syntex, though there was no disagreement that this is the most significant upgrade to SharePoint in over a decade, there was no agreement on what they (partners and users alike) were supposed to do with it. However, that was clarified as one after another stated that most SharePoint installs are a mess, unmanaged and ungoverned. And it’s not just Syntex, add to the mix Power Automate, Purview & Teams, and there is a lot of tech here to navigate, and it seems both partners and buyers alike are unsure how to do that.
5: Breadth versus Depth
The kicker for Box was that, in this group’s opinion, it would have to deliver massive upgrades and advances over the next 18 months to retain its competitive edge over Microsoft. And frankly, there was a great deal of doubt that Box could do that. There is simply no way that Box (or anyone else) will be able to match the scale and breadth of the Microsoft product launches. Still, more automation and, importantly, easy-to-use automation must, in our opinion, come soon from Box.
Our Thoughts
Both Box and Microsoft have challenges ahead to address. The recession will likely show a slowdown in sales for both, but it has to be noted that any slowdown comes following an unhealthy bump (excuse the pun) in their sales numbers received during the pandemic. The market for document management remains strong. Furthermore, even though Microsoft continues to dominate the document management market in scale and reach, it’s not all about Microsoft. Our discussion focused on Box, but FileCloud, Dropbox, Egnyte & Google, etc., all own solid niches that they will not give up easily or quickly to Microsoft. Then we have the true ECM players that dominate in complex situations, such as Oil & Gas, Legal, Banking & Manufacturing, and vendors such as Hyland and OpenText. Even so, change is coming to the market as a whole, initially through the extended use of AI, followed by Blockchain. Microsoft has the scale and unlimited resources to build these newer technologies out, and the competition, like Box, will need to get a move on if they are to retain their positions. All of that aside, the biggest takeaway is that simple and transparent pricing and good customer support are sometimes the biggest differentiators a vendor has, and those things are priceless.
BTW: My colleague Dan and I are currently working on a major ECM Market Forecast report that will explore many of these issues both more broadly and in more detail. Watch out for that coming in Q1. In addition, we have a new Microsoft Syntex report in the works that should be published in the next week or two.
In the meantime, If you are a buyer or user of Information & Automation management tools, we have a free – yup, free – confidential advisory service for you. A service that means all you have to do is find a time on our calendar.
Likewise, if you are a seller of Information & Automation Management technologies, again, feel free to reach out and chat with us, we may be able to help by providing some critical but constructive advice and support.