Box’s Gameplan For 2013: A Third-Party App Economy; Expanding Security And More

As you talk to Aaron Levie, the co-founder of fast growing cloud storage company Box, it’s hard not to notice his incredible energy when he talks about enterprise storage possibilities. Six years in, Levie is still as passionate about what he is trying to build as he was back in Mike Arrington’s backyard pitching VCs on Box in 2006. Box has had a big year, and one that many could call a turning point for the company. After raising $125 million in new funding and a reported $1.2 billion valuation in July, the company is finishing off 2012 by nearly tripling revenue from last year, and preparing the company to possibly enter the public markets in 2013 or 2014. We sat down with Levie to talk about Box’s gameplan for 2013, his education in being a leader and CEO, and more.

With nearly 700 employees, Box is no longer a startup. So operationally, and products wise, the company is looking for ways to balance developing existing products with working on new, out of the box ideas. Levie says that he wants to model Google’s product approach, which means engineering and products are focused 70 percent on the core business, 20 percent on high growth areas and around 10 percent on big picture innovations in the industry.

Box now has more than 140,000 active businesses using its products, which includes 92 percent of the Fortune 500 and 14 million total users, which is double from last year. And 14,000 developers are now using Box’s open platform, with the company now seeing 500 million API calls each month.

So 2013 will be split between having developers double down on Box’s core foundational technologies, as well as working on ways to integrate Box outside of its existing ecosystem, and further expanding the company’s API into the hands of developers.

Why? Levie has a strong belief that the future of cloud computing and enterprise is in best of breed enterprise applications that work together in stacks. He explains that the new world, tech savvy enterprise IT buyers want to implement Salesforce for CRM, Zendesk for customer support, and Box for content management and collaboration, but don’t want all of the data put into these applications to be siloed.

Further, Levie sees the enterprise app economy (similar in theory to Salesforce’s App Exchange) as being a huge potential growth market for Box and for developers. In 2013, we’re going to see Box tap into this area. Levie didn’t share too many details on what’s to come, but it sounds like there is going to be an economy around ways for enterprises to find apps that are using Box, or could be useful to them.

Mobile is and always has been a focus for Box. The company will continue to make its apps more mobile friendly, and streamline Box’s capabilities as a hub for business content that can be accessed and used with full functionality from any mobile platform.

Another area where we may see Box make some movement is in acquisitions. Levie said he is in talks with an acquisition target now, and may make a few strategic acquisitions in the coming year, though these moves will be more technology and talent, not for users, he cautions. Security is one area where he feels an acquisition may make sense. Despite being six years old, Box has only acquired one company in its history–Increo Solutions back in 2009.

In terms of security, Levie is pinning Box’s “ability to go into greater depth in enterprise security as what will identify the company’s ability to win in the cloud storage space.” He says there are a lot of companies doing compelling things in the enterprise security space, and this could be an attractive area to do any M&A. “There’s a massive category around data discovery and protection,” he adds.

Security is going to be a big consideration for some of the verticals Box is going to be doubling down on in 2013. Federal is going to be huge and Levie says there is now one employee who is completely focused on bringing Box to federal agencies. Other industries that Levie has his eye on — legal, media and entertainment and healthcare. But the core product will never change, Levie says, despite the various verticals that use Box for varied uses.

Levie himself has stopped thinking about what is going to destroy Box in terms of the competition. It’s an interesting change in thought from the Box of a few years ago, which was singularly focused on bringing users over from Microsoft Sharepoint. Levie says that Sharepoint isn’t as much of a competitor these days as the cloud storage market becomes more fragmented with DropBox, Google Drive and many others in the mix. He added that at one point he thought Google Wave was going to destroy Box, which clearly didn’t happen.

Other investment areas for the company will be in hiring (the headcount will go up significantly but won’t double like this year); R&D and engineering; sales and international.

Box has finished the year, more than doubling revenue with some sections tripling or quadrupling sales. The company is also developing strategic relationships with IT consulting firms like Accenture and Capgemini, as well as with carriers so that mobile carriers will resell Box to business customers in devices. The company already inked a deal with Deutsche Telecom but we’ll be seeing a domestic, U.S. carrier partnership in January.

It’s clear that Box is readying itself for the public markets when that time comes in the next year or so. “We talk about an IPO monthly. It’s not going to happen in the next few quarters because there is so much we want to do as a private company and not as a public company,” Levie explains. But he says it’s on the strategic plan, and it’s something the company is actively thinking about, especially as the market response to enterprise companies is positive.

While still as passionate as the days when he was developing Box back in a garage in Berkeley, Levie has also been focused on developing his skills as a leader and CEO. This maturity (he’s still in his twenties) is going to be a consideration if an IPO does happen in the near future. He still battles the challenges of time, as most CEOs do. “I’ve worked hard to get more focused on what needs to be done, and help build the organization overall,” he explains.


As I was leaving Box’s brand-new offices in Los Altos, champagne corks were being popped by a group of engineers, celebrating the release of a new version of the company’s API. Levie quickly joined in the celebration. The optimism, and energy at the office is infectious, as is Levie’s excitement for what he has built and is trying to continue to build. Hopefully that sentiment is still part of Box’s culture in 2013.