Box’s Next Frontier: Cloud Storage For The Federal Government

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For Box, 2011 was a huge year in terms of customer acquisition. Box ended the year with 77% of the Fortune 500 using the company’s cloud storage offerings. Procter and Gamble marked one of Box’s largest deployments for the year. While Box is still continuing to focus on cloud solutions for the enterprise in 2012, the company has set its sights on a potentially huge fish for the year—the federal government.

Box CEO and co-founder Aaron Levie tells me that there is a huge opportunity for Box in procuring cloud storage options for government agencies. “There’s going to be a big shift in public sector using cloud services this year,” Levie explains. “With so many agencies having to collaborate with public and other organizations, it’s more efficient to do this in the cloud.”

One of the obstacles to offering cloud services to the government are the high security requirements. For example, we’ve seen some of the early security hurdles Google faced with expanding cloud-based Google Apps to government agencies. But Box has recently started ramping up security for cloud storage, making controls more granular and giving IT administrators more control over user functions. It is expected that Box will add even more security and control for compliance with government agencies’ data.

Levie says that the company is potentially tapping into the $70 billion market for providing technology and software to the government. Clearly, that’s a huge revenue opportunity for the company. And government agencies seem interested in making a move to the cloud. In November, President Obama has ordered federal agencies to improve their records management, encouraging them to ditch paper-based storage to the cloud.

Already, a number of enterprise cloud-services companies are clamoring to appeal to the government for services. Amazon recently launched the GovCloud to provide a secure cloud computing environment for government agencies. IBM, and HP recently won a $250 million private cloud contract. And Salesforce is also eying public sector initiatives to help governments adopt cloud computing.

Box is currently serving a number of local and state governments with cloud storage services, says Levie. At the end of the day, he explains, the government is dealing with the exact same problems as the enterprise. And that is an opportunity Box is not going to pass up.