Box CEO talks European plans, warns about meeting BlackBerry's fate

Credit: IDGNS

At an event in London yesterday, Box CEO Aaron Levie spoke to press, discussing the company's European expansion and its relationship with governments -- and the future of enterprise software in the light of increasing consumerization.

Starting by talking about the differences between European and US markets, Levie noted, "Europe sees the exact same business challenges as anywhere else in the world, the exact same trends transforming businesses." They're familiar trends: the move from on-premises to the cloud, the move from the traditional PC to tablets and mobile, and the changing nature of work itself. He's been talking to CIOs around Europe, and says, "They're trying to implement new technologies from a new set of vendors for a new set of experiences to solve a new set of problems."

That's why Levie sees Box as more than a collaboration platform. "We realized this transformation of the enterprise was going to be the biggest thing we could latch on".

Strong demand has led to Box doubling its European staff, and increasing its channel partnerships. Working with telcos is a useful on-ramp for Box. Across most of Europe it's working with Deutsch Telecom, and it's now partnering with UK's largest mobile operator EE to provide Box's services to small business customers. Channel partners like EE are an important part of Box's expansion strategy, as they allow companies to buy Box's services from existing partners -- simplifying purchasing decisions.

A key element of Box's European announcements was its place on the G-Cloud, the UK government's list of approved cloud software. While box already has some UK government customers -- especially in local government, where customers include the London borough of Hounslow -- G-Cloud approval makes it easier for the UK public sector to buy Box's services.

Asked about further European expansion, and the implementation of a European data center, Levie said "One of the things that differentiates Box is that we typically go further for regulatory compliance." He suggests that some form of common regulatory framework is necessary for the success of cloud services, "We're going to have to have some amount of standardization, it's the only way we can get globalized communication." Even so, it's not regulations that will bring Box's infrastructure to Europe, but performance, "We need to get closer to our customers […] It's far more about how fast we scale out in a country rather than whether we can sell to a country".

Later, in a keynote speech, Levie touched on the subject again, and told his audience, "We're architecting software and looking for a site." It's important for Box to get its software right, as moving from three US data centers that are relatively close to each other (two in California, one in Las Vegas) will add latency to the company's platform -- especially with software and data in different locations.

Privacy remains important to Box, and it's paying close attention to the fallout from the recent NSA spying revelations. Levie remains optimistic about the future. "Our focus is on control and security.... We want to avoid some of the noise about the balkanization of the cloud. It doesn't make sense technologically, and it's also not where the economy is going." A lot of Box's thinking is due to the way its customers are working, "You need to collaborate with an ad agency in London, with a customer in Denver, and a supplier in New York. It might make sense for certain kinds of data to be stored in these regions, but it also means that we need to make sure the Internet stays open."

While those NSA revelations haven't had much effect on Box, Levie isn't being complacent. "With customers that are already reluctant about the cloud it gives them another reason to be reluctant. But customers that get that for productivity gains they need to go to the cloud, it's more about which cloud."

Levie remains well aware that the biggest threat facing Box is the same one that makes it a threat to incumbent enterprise software vendors. As he points out, the shift to cloud and mobile changes the way software is bought and deployed. "This shift means the onus more than ever is on the vendor. If we don't stay competitive, if we don't build whatever that that next thing is the user wants to do and build it in as simple a way as they expect from the consumer tools they are using, then we will get swapped out." 

By making it simple for users to deploy solutions, companies like Box need to be aware that they're also making it easy for customers to replace them with something new. "You will either get swapped out because IT will swap you out or just because people will stop using you because they're using a consumer solution, And because it's SaaS, they're only paying for what they use -- and you stop getting paid". Levie sees these forces as a Darwinian engine driving software evolution. "That's the amazing and remarkable competitive force that's going drive better software in the enterprise. It will finally have the same kind of consumer forces we see in consumer tech where anyone can bring anything they want." 

Levie holds out the fate of BlackBerry as a both a warning and a promise to the enterprise software industry. "This is what BlackBerry is facing, it's very easy for [a customer] to say 'no more BlackBerry' and all of a sudden it's BYOD. Any enterprise software vendor that doesn't actually think they're in the consumer business really doesn't understand where the future is going." It's a future that he believes will carry on changing the industry. "That use-centric approach will see a very different set of vendors playing in the space. Existing vendors will have to change rapidly or become irrelevant to the world of the future."

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