The enterprise IT landscape is in the midst of a period of tectonic change and innovation. The shift to cloud infrastructure has made tasks such as storage and file sharing cheaper and more efficient than ever before. At the same time, collaboration, document management, productivity, and a host of other processes are converging under the same cloud-hosted banner for both businesses and end users.
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We've seen numbers such as $30 billion thrown around in terms of future opportunity in the productivity and collaboration market. Aaron Levie has called this "an order of magnitude more than the combined revenue of all the players today." Levie, the co-founder and CEO of file-sharing and collaboration software provider Box, took his company public in 2015 with a focus on building a unified enterprise platform through Box (for Business).
Levie also believes there will be plenty of market opportunity to go around. We spoke to the CEO about how the cloud landscape is changing, where Box fits in amongst the other players (spoiler: by integrating with all of them), what to expect from the evolving enterprise platform in 2017, and what IT innovation means for the future of work. Levie also offered some advice for other startup founders considering an initial public offering (IPO) and shared his thoughts on what a Trump administration means for tech.
Aaron Levie (AL): Look back on IT a decade ago. Most of your time within the IT organization or strategy was really on activities that weren't particularly differentiating you from other companies. Everybody had to manage servers, middleware, a database, email systems, and networks, so all of your time was spent on these tasks that, if you did it better than a competitor, none of your customers would notice—and few of your employees would even notice either.
Fast forward to today. Not only have we basically solved for storage and email, but we've been able to move up the stack even further and solve more strategic problems for businesses, be it through digital marketing and better ways of collaborating, or using artificial intelligence (AI) and machine learning to give you more insights about your business.
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Then the flip side is that, because of the cloud, we have an abundance of technology that can do amazing things for you when you engage all these tools, applications, and platforms. It's not just enterprise vendors, either. It's the consumer companies as well. You're getting the scale of Google and its search engine applied to machine learning and computing, the power of Facebook applied to business with Workplace, and modern chat applications delivered to you in Slack. It's all the best in enterprise technology, honed and optimized for consumer applications and vice versa. For IT, we're looking at all these exciting innovations and discovering all these new ways to deliver those capabilities to your company.
PCMag: You've talked a lot about the changing nature of work toward a more competitive, customer-focused model. Taking a high-level view of the tech industry right now, how exactly is that playing out?
AL: Think about all the technology we just talked about entering the workplace and, simultaneously, we've got a new generation of workers and a new era of customer experiences and expectations. These things are all converging and causing companies to reimagine the way they work and operate.
We serve over 60 percent of the Fortune 500 and have nearly 70,000 customers, so our purview is across a wide array of businesses, from GE and Uber to Airbnb and Coca Cola; it's a wide spectrum of digital disrupters and big companies who are transforming their businesses in a significant way. This is less true for an Airbnb or an Uber who already work in a modern way, but it's really true for Box customers like Dow Chemical, GE, Coca Cola, Procter and Gamble, etc. They're enabling new technology, allowing employees to share and communicate in real time, to collaborate across boundaries and borders, and to create new digital experiences that change the way they collaborate and transact with customers. All of this technology, combined with businesses moving faster, is redefining what the workplace will look like and changing the business operating model.
Traditional information hierarchies and chains of command no longer work in the digital age. You can't compete with Uber if you're moving information across your hierarchy the same way you have for 20 or 30 years using legacy tech and archaic processes.
It's an interesting confluence in technology and operational change, and it's driving a significant reimagination of what work is going to look like. The best way to look at where that's going is to look under the hood of a modern digital company and how they operate. It's 24/7, extremely flat, and is about sharing as much information as possible with as much transparency as possible. The world is moving so quickly that, if you're not on the same page with the same data, you're going to lose.
PCMag: Between Box, Dropbox and Evernote, Google Drive and Microsoft OneDrive, plus players such as Salesforce buying Quip and a long list of others, the cloud-based file storage, collaboration, and document management market is flush right now. Where does Box fit into that landscape? And do you envision the market shifting and playing out over the next few years?
AL: We want to power how companies collaborate with one another. If someone is working in Slack, Facebook Workplace, or Google Docs, and they can't pull data from Box or store data back into Box, then we don't succeed in our mission. What we're really trying to do is be embedded into all the different applications and services our customers are using, which means partnering with everyone, even the companies we compete with a little bit.
That's why we're partnered significantly with Microsoft, Google, and others. As it relates to some of our other consumer competitors, it's hard to say. You will see some consolidation because it'll be hard for many of the independent players to survive. That's not necessarily true for Dropbox, which is more established, but maybe for some of the longer tail players. Our focus is on enterprise. Working with companies to store, manage, and collaborate on their information in the most secure way possible. We think there will be a multimillion dollar opportunity as more applications move to the cloud, and that's what we're targeting.
PCMag: I also want to talk about the broader cloud space. Box Zones really changed the perception of the level of control enterprises can exert over their cloud storage, letting users allocate their own storage resources across Amazon Web Services (AWS) and IBM clouds. Do you see that as the start of a larger trend in the public cloud landscape?
AL: If you look at all the change we've been talking about—the way companies want to work and the technology they want to utilize—that's a lot of exciting innovation we'll start to see in a big way. There's also a counter change, which is an increase in regulation and privacy requirements when you're doing business around the world. So, layer in those two things: increased regulation and security constraints and, at the same time, the need to move faster as a company than ever before. Cloud providers have to resolve both of those diametrically opposed challenges.
We are uniquely focused on doing that. We want to enable companies to share and collaborate, and do so while adhering to security, regulatory, and governance issues, especially if you're a large multinational company. Box Zones lets customers share data in seven countries around the world, to adhere to local regulation requirements but also to collaborate securely because we've abstracted away that complexity for end users. That's the future of enterprise data: solving very hard problems that enterprises themselves don't really want to solve, and doing so in a way that's still simple for end users.
PCMag: On that subject, I also want to touch on cloud and enterprise security. What are your most pressing concerns in terms of cloud security right now and how is the tech industry responding?
AL: There are two ways we think about security. One is the level of security the cloud providers themselves offer. That's everything from the technology stack and data center to the way the software is designed, tested, and audited. Operationally, that's how we think about it: Are we protecting against potential threats that might be occurring every single day?
The other half of it is the product and usability side of security. How are humans interacting with our technology and how do we keep those user interactions secure? That's done in concert with the mobile device players, with web browsers, and with identity management systems. On that side, we need to make sure the security mechanisms are as usable as possible. Otherwise people won't actually adopt the tools and services to keep them secure over the long run.
The threat landscape is a bit different. On the end user side, it's things like social engineering and phishing attempts, all the ways attackers try to pilfer credentials. Then, in the operational landscape, we're dealing with things like brute force attempts and DDoS attacks, and we have to work to stay secure on both sides. It's a very dynamic landscape and you have to work extremely hard to stay ahead of it.
PCMag: Let's dig a bit deeper into the Box product roadmap as Box moves beyond file sharing into productivity and workflow tools such as Box Relay. How will the platform evolve in 2017?
AL: The two big dimensions for us are to build products that are easy to use and also very secure. You'll see a big focus on end-user experience around collaboration this year. Box Notes will experience a series of updates rolling out this year to ensure better collaboration and workflows. On the back end, we're investing more in advanced security capabilities and analytics to help customers do more with their information and generate insights.
On the platform side, expect some cool things on the integration front. There's a lot more to come to fruition within our Facebook partnership and more integrations with Microsoft and other partner technologies. We'll also be announcing integrations with even more companies and partners. We also want customers to build their own digital experiences on Box. When a customer has their own custom application, whether it's a client portal or a mobile app, we want to empower them to build the best product or integration possible with our APIs and developer platform.
PCMag: I talk to a lot of startup founders and entrepreneurs in the early and middle stages of building out Software-as-a-Service (SaaS) companies. One of the most stressful decisions is always whether or not to go public, and if so, choosing the right time. There's been a lot of talk about Dropbox going public this year, along with several other high-profile startups such as Snap and Airbnb.
Can you talk a bit about your experience taking Box public? Now two years later, do you run the company differently now than you did before? Can you share any advice for other CEOs considering it?
AL: We've had a great experience so far being public. Stock price is one way to determine it, but I would say that's more about building confidence with Wall Street. More important is how your employees deal with the IPO. We've been public now for two years. It has given us additional credibility with customers, and a lot of robustness in being a public company and delivering on those results.
For us, it's been positive, but we're at a certain value where it makes sense. It's not necessarily something you should do if you're a $50 million revenue company. We're going to do $400 million in revenue this year, which is why I'm confident in us being public. That said, it may not be the right decision for every startup.
PCMag: Finally, as a Silicon Valley CEO and given your own prominent presence on Twitter, do you have any thoughts on how President Trump, our new prodigious Tweeter-in-Chief, will affect the tech industry?
AL: There are a lot of challenges and opportunities right now in this country in terms of the digital landscape but also around the future of jobs broadly. We have a massive amount of technological change and transformation occurring. We think of things like security, privacy, encryption, and digital regulation as tech industry issues but, if we look around in 10 or 15 years, these issues will affect every industry: transportation, life sciences, healthcare, etc. These tech issues will be important in driving America forward as a thriving economy or...suppressing the country's potential.
Trump's administration is coming into power at a time where there are all these important issues to deal with. There will be important decisions made on all of them and more, modernizing our regulations to support the digital transformation taking place. Take encryption and privacy: If we don't have extremely effective encryption and security, then we won't be able to drive the right level of privacy to give end users confidence to utilize our platforms.
We also need to prepare for a coming age of AI and balance the jobs that will likely go away by creating a path to capitalize on all the new job opportunities that will emerge. This is a wide set of problems. If Trump surrounds himself with people who prove to be thoughtful and knowledgeable on these issues and can find ways to enable the digital transformation, I'd be optimistic. Obviously, at this point, it's too early to tell.