What might surprise many observers is how well Box.net has read the roadsigns of enterprise computing.
To start at the top: The option to store corporate data off-site on the Web is catching on, albeit slowly, with enterprise customers. In a survey of 230 enterprise IT pros taken by cloud storage provider Zetta in the fall of 2010, 51 percent of respondents said they plan to use cloud storage.
This isn't to say big organizations have no reservations about using services like Zetta's or Box.net's (or those of other competitors, such as Mozy and Sugarsync): Security and privacy concerns remain a barrier for 60 percent of those Zetta surveyed. And 49 percent of respondents claimed they won't be using cloud storage at all, though that figure is down from 53 percent in Zetta's similar 2009 survey.
But Box.net is betting the addition of collaboration capabilities and other features will make cloud storage irresistible to enterprise customers. It's a tactic that Box.net cofounder and CEO Aaron Levie has been pushing for the last couple of years, since shifting his firm's focus from consumers to business customers.
So far, it looks like a winning proposition. Box.net's got 60,000 customers, including Cisco, Dell, MTV, and Panasonic, signed on. And now the startup's management and its investors, including Andreessen-Horowitz, see a tipping-point in the offing. Levie thinks IT's need to support enterprise storage that's accessible from mobile and tablet devices, particularly Android-based smartphones, will open the floodgates of demand.
"2011 will be the year that this enterprise software revolution moves past the early adopters and into the mainstream, bringing software that is simple, cloud-delivered, and mobile to all businesses, making this the most exciting and disruptive period in the history of enterprise IT," states Aaron Levie in a blog posted yesterday.
At least one other expert, Tom Nolle of CIMI Corp. , sees a link being forged between mobile devices and cloud storage, although he views it more from the perspective of a "smartphone features war."
If Box.net can encourage enterprise customers to adopt its services by dint of their convenience to mobile workers, that could support Levie's vision of shoving aside IBM Corp. (NYSE: IBM), Microsoft Corp. (Nasdaq: MSFT), and other enterprise software heavyweights.
But "support" doesn't ensure success. Right now, Levie's vision seems grandiose. Is it really possible that a callow 26-year-old could convince big enterprises to prefer his services over those of globally established IT players?
Aaron Levie, CEO and co-founder, Box.net. Source: Box.net.
Stranger things have happened. Who was that Harvard dropout named Gates, who got his operating system into IBM's revolutionary personal computer? How about Sergey, Larry, and friends? And is anybody still laughing at Mark Zuckerberg? (Well, we mean really laughing -- without that bitter, envious edge.)
There's no doubt Levie (who peppers his speech with the word "totally" used as an exclamation or modifier) is ready for battle: "With this new capital and our current momentum, Box is positioned to redefine an industry, much as Salesforce.com has done for CRM and NetSuite for ERP," he crowed in a press statement issued today.
Is this dream possible? Maybe. Is it admirably daring and aimed at the highest IT echelons? Totally.
But for the record, I don't think CEO Levie is "precocious," as does the author of the article I just linked to. Twenty-six years old is not 18. He may look young, but he's nearly 30 years old.
They just need to partner with a reputable partner or have some seasoned veterans on their advisory board to open a few doors for them. Once they have achieved this then there should be no issue! Just the usual....
Comments that they will make their service cheaper than anyone else to drive a model is likely a losing strategy. A company like HP, Microsoft, Google, etc could absolutely bury them on price - even if they are more efficient in their services (cost structure). These company's have other revenue streams and 'investment' dollars to win a price war.
However, if they continue to provide innovative technology that gains market share, then they can be successful.
I always wonder about 'freemium' services and how many paying customers they get for each free one they give away. And, if they were not giving away the free storage, would their paid service be half the price? I have not dug into Box.Net, but would be curious to know the volume of free accounts vs paid and how long their business model can sustain before profits come?
It can work, but the better they get, the more attention they will garner and that will mean more competition. Hopefully they are focused on the technology and not only price.
Hi Anand: I can't answer that. But Levie said this in yesterday's press release:
"we'll aggressively outperform legacy software solutions on cost, flexibility, user experience, and speed of innovation, while pushing on our freemium business model to make it incredibly easy for individuals and companies alike to adopt Box."
Yup, claims of adoption invite lots of probing. Good point. Startups have been known to give up half the store to gain the one big name they can carry to other prospects.
It would seem the cloud storage should be more attractive as more people start using. it and cloud computers like the prototype Cr-48 become more commonplace.
I've had a box account for years but only used it as an experiment and a half hearted attempt at back up for some photos and music. But, now testing the Google Chrome notebook I'm beginning to realize that cloud storage is probably going to become the "future."
Its still too early to say if Box.Net and their Young and charismatic CEO suceeds in redefinig this space.
What is quite sure is that he will end up giving some very uncomfortable nights to some of the Biggest CEOs in this space.The more competition in this space,the Better...
After all,Competition is good for everybody and helps shake out the complacency from this space very quickly and very,very effectively.
The numbers are probably skewed a bit if you ask me. As part of a marketing twist of words, Box.net can claim that number simply by having their software (however it may be branded) installed on all of the Dell computers that are sold to home users if nothing else. Dell may utilize Box.net services internally as a matter of convenience as a result of their own partnership relation.
The problem I have with the bigger players is that the individual user loses a lot of leverage.
Think of the small company with the guy in the back who runs the servers. Want your password reset? Walk back there and ask him.
Now take Google. A few years ago I made some comments on a "Google Groups" financial bulletin board that some fan bois violently disagreed with. They made their disagreemetn in the form of an abuse claim...long story short, I can no longer use Google Groups.
However, it goes beyond that...because Google Groups is what is used as the support forum for lots of Google services including AdWords which I use as paying customer. Also, I had a Google Group of my own set up, which thankfully, no one in the organization I set it up for ever used because now I have no access to it. And lastly, I subscribed to a group for the Dell Mini 9 which I used to own, but was stolen. However, since I cannot access my account, I cannot stop any of the forum emails...though I've tried contacting Google 10 times, and publically numerous times, they have not fixed this spamming problem. I ended up setting a permanent back end junk mail filter!
There are a lot of things in IT that demand service. Fast service and business knowlegeable service. I think that I might get that with a really focused cloud business that pays attention and that has real people doing the service (or at least a computer as smart as Watson) rather than an bottomless void of web email forms that never give an appropriate answer.
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