Our Quick Take on Box
Today is the second virtual BoxWorks, sadly so many conferences are still virtual. But this one would have been fascinating to attend in person for several reasons. Firstly, BoxWorks has become the largest ECM/CSP-related event in the industry, a lively affair usually at the Moscone in San Francisco and a date in the calendar to meet enterprise users of information management technology. Secondly, this has been an eventful year for Box after waging and winning a proxy battle with activist investor Starboard. Hence it would have been time to get the pulse on Box and where it is heading. We were though still able to meet with Box (albeit virtually) and learn about the new product announcements and get a feel for the firm’s forward direction.
As to the announcements, there are three that particularly caught our attention. The announcement of an enhanced partnership with Microsoft was a bit of an eye-opener. There has been no love lost between the two over the years. Still, it’s a pragmatic move on both sides and recognizes the status quo that many Microsoft users prefer Box. Then there are the Box Notes enhancements, which on the surface, are just that, enhancements. But in our analysis, at least, this points the way to an expansion of the Box platform. As the name suggests, Box is best known for storing and providing access to files, but for many, it has become a content-centric collaboration platform, and that is a niche that few (other than Microsoft) can fill well.
Further integrations with Slack, with the goal of making it the default content layer, etc., make a lot of sense. To be clear, Box Notes is not a replacement for Word; instead, it is a tool for teams to work on documents together. Or, to put it another way, Word is a tool of record, Notes a tool of engagement. We expect more such collaborative features to come to Box over the coming year. Finally, there is an interesting announcement regarding Box Shield that we will cover in more detail at a future date. But suffice to say, Box is setting some distance between itself and its competition regarding security, compliance, and governance. There was one other key announcement, but it was already common knowledge, the integration and launch of eSignature (Box Sign) functionality into the platform essentially for free. That is a shot across Dropbox and HelloSign’s bow, for sure. However, in our analysis, it is a smart move as the problem with eSignature software is that it has not been bundled functionality (like search, for example). It should be, and now it is within Box at least.
So at this point, Box has over one hundred thousand customers, is in use in 67% of Fortune 500 countries, and appears to be well placed to grow in an increasingly hybrid and decentralized workplace environment. Of course, the proof will be in the pudding; and although Box has had a tough year corporately, it continues to grow, it is investing heavily in EMEA, and expecting 30% growth there alone this year. What we expect and hope to see moving forward, is in simple terms, more acquisitions and more focus on making Box a work platform in the coming year. It’s worth noting that in our recent survey work regarding hybrid work, one of the biggest challenges remote workers encountered was getting access to the right information. That’s a problem that won’t be fixed quickly, but increased interest in analytics, AI, and knowledge management points to a ready market for solutions. Box is well placed to be one of those solutions, but so are others, therefore time is of the essence to make a few big moves and cement Box’s place in the market. The key to that will be continuing along the platform course, not offering add-on functionality at an extra fee, but rather by continuing to bundle it in with enterprise plus licenses. That approach is a tough pill to swallow for many enterprise software companies, but Box appears to be committed to it. From a buyer’s standpoint, it makes the platform attractive and predictable in terms of cost. From Box’s perspective, it means a short-term hit but much stickier and longer-term relationships with its subscription base.
As always we will continue to watch Box’s approach with interest, and if you are a Box customer and want some free (did I mention Free?) one on one strategy advice then just set up a time to chat with us. Either way, hopefully, next year BoxWorks will be back live and we can meet you in person there.