Microsoft Teams With Smaller Rival Box on Cloud Technology

By Jay Greene Features Dow Jones Newswires

Microsoft Corp. cut a deal Tuesday with competitor Box Inc. to partner on cloud-computing technology in an effort to get ahead in the emerging business.

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Box, like Microsoft, offers web-based document-storage services. In years past, Microsoft might have shunned helping a rival, but three years into Chief Executive Satya Nadella's tenure, it is working more with competitors to win over customers.

"This is an example of where Microsoft has really changed over the last three or four years," said Scott Guthrie, executive vice president of the company's Cloud and Enterprise group.

Box provides file sharing and storage services to customers looking to stash documents, videos and other types of data online. Microsoft's Azure cloud-computing service offers a technical foundation upon which companies like Box can run their services, in addition to its cloud-computing applications, such as its OneDrive online service that competes with Box.

The two companies will now work to better integrate their products and sell the combined services. In addition, Box will offer its products on Microsoft's Azure cloud-computing service. And Box also intends to use Microsoft's artificial-intelligence technology, which could help customers with such tasks as video search and translation services, Box co-founder and CEO Aaron Levie said.

Box already partners with Microsoft's cloud-infrastructure rival Amazon.com Inc. Customers can choose to run Box's services in Amazon Web Services data centers. Box will continue to work with Amazon, but Mr. Levie said the new deal, which includes integration with Microsoft products as well as joint sales efforts of combined services, "goes well beyond what we've done with Amazon."

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The deal also opens up markets for Box where customers are required to keep their data stored in the countries in which they reside. In April 2016, the company introduced Box Zones to address data-sovereignty issues; the service is now available in eight countries. A Box spokesman said the new partnership will allow Box to take advantage of Microsoft Azure's global footprint and offer in-region storage in six additional countries.

The combined sales effort will begin shortly. The technology integration should occur over the next two quarters, Mr. Levie said.

For Microsoft, the deal builds on efforts to work with rival technologies, rather than fight them. Mr. Guthrie compared the move to Microsoft's embrace of the rival Linux operating system as well as its decision to make its Office productivity suite of programs available on Apple Inc.'s iPad.

Box isn't as fierce a rival to Microsoft as Linux and Apple have been. The companies have worked together before. More than a year ago, they agreed to make Box's services work more smoothly with Office.

Still, Mr. Levie said he has noticed Microsoft's "new tone and tenor" in working with tech rivals, rather than just battling them.

Write to Jay Greene at Jay.Greene@wsj.com

(END) Dow Jones Newswires

June 27, 2017 09:14 ET (13:14 GMT)