Box CEO Aaron Levie: "We will always have a free version"

Credit: Robert Scoble via Flickr

Box CEO Aaron Levie bounds onto the stage at his company's BoxWorks conference and immediately the energy level goes up a few notches. He is a bundle of manic enthusiasm that often seems ready to spiral out of control. He speaks so quickly it's almost as though he can't keep up with the thoughts in his head before they come tumbling out of his mouth. 

At one moment, we see Levie on stage joking about the size of his conference compared to the previous week's Oracle OpenWorld -- "We didn't shut down city streets, but I understand we shut down an alleyway" -- and the next he is giving the audience the historical context for the development of consumerization and mobile and how they relate to the development of cloud services like Box. 

Later when I speak to Box Director of Communications Ashley Mayer, she confides that Levie is not a morning person and she worried about him speaking so early in the day. She needn't have. Whether fueled by coffee, Red Bull, or his own inner fire, Levie charged through his morning talks.

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Yet for all his frenetic energy, he is focused, passionate, and driven to succeed and make his company the poster child for building consumer-style apps with a distinct enterprise focus.

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I caught up with Levie on Day 2 of his company's BoxWorks conference. I've been having an ongoing conversation of sorts with Levie since 2010 when he and Mayer showed up at the AIIM Conference in Philadelphia. At the time, few people had heard of Box. Within a year, they were being held up at conferences as the prime example of content management in the cloud. Last year's BoxWorks -- the first -- had about 400 attendees. This year, there were more than 1,800.

Box's growth was fueled by the freemium model -- users can try a version of the service for free, but enterprises have to pay to get all the features they're likely to want. At a talk in 2010 at the Web 2.0 Expo, Levie explained the reason for going freemium. "If you want scale," he said in his presentation, "you need low friction. Happy customers will pay you." As it turned out so far at least, enough customers are paying that venture capitalists have been falling all over themselves to fund Box. 

Now, Levie says that he sees no reason to let up on the freemium model, which has helped fuel this growth, even though Box is becoming more broadly accepted by traditional enterprises.

"I think about freemium differently. I see it as a foundational element to our business model. We will always have a free version and let anyone join who wants to start using it." It's because he believes it's the best form of optimization. End users can take advantage of the basic functionality, while the enterprise gets the scalability and integration that they need. 

He adds, "The alternative is that we become a traditional software company and sell to the CIO. We want end users to have instant access," he says.