Box is a company in transition with broader content management ambitions, a bevy of product releases ahead and a mission to grab more enterprise wallet share from its more than 92,000 customers.
The problem: Transitions are rarely easy. Just ask Box CEO Aaron Levie. Box is coming off a mixed fourth quarter and an outlook for the first quarter that fell short of expectations.
On the fourth quarter conference call, Levie outlined the promise of Box's plans to meld its file transfer and storage business with content management. He said:
The enterprise content management and storage infrastructure markets represent $40 billion in opportunity, and Box is the only cloud-native platform built to power the next generation of workloads as they rapidly move from on-prem to the cloud. Entering FY '20, we have the most exciting product road map in our company's history, focused entirely on enabling our customers to power their digital business processes and to retire legacy content management systems.
In the meantime, Box has to launch its new products such a Box Relay and Box Shield and refocus its sales teams on selling a broader platform while targeting industries. Simply put, Box wants to be the cloud layer for content management and integrate with systems of record in enterprises.
We caught up with Levie in New York City. Here are the highlights:
Box's transition period between two eras. Levie explained how the first era of Box growth was driven by secure collaboration and file sharing. "A year ago, we started a second act around business processes and workflow automation for content management," said Levie. This second act requires new products -- Box Relay and Box Shield -- that will launch in the summer as well as a focus on specific industries and their needs whether it's statements of work for supply chain, security or procurement. Box's sales cycles also become longer since the company is pitching more of a suite and platform over a more transactional approach with file sharing. "It's more of a consultative sale," said Levie, noting that the company has beefed up its consulting unit and has partnerships with the major systems integrators.
Returns on investment for customers. Levie acknowledged that Box's sales approach for its second act is a work in process, but is optimistic since enterprises are often relying on legacy systems when it comes to content management and workflows. "We have one customer saving $10 million a year on infrastructure just from retiring legacy systems," said Levie. "We can accelerate cycle times with our platform." Cycle times can refer to everything from on-boarding an employee to research and development documents to lining up contracts for orders. Box sees the competition as legacy systems as enterprises go cloud native or cloud only for their infrastructure and applications.
The importance of Relay to Box's product roadmap. Relay is a workflow automation tool that will be available with a click to Box customers. It is designed to move content required by line of business systems such as SAP, Oracle, Workday, Salesforce and ServiceNow automatically when triggered. For instance, a new hire in a Workday system would get the documents needed for the employee via Box. IT tickets and documentation would be delivered in ServiceNow. Supply chain orders and statements of work could run through SAP and Oracle. Marketing collateral could be delivered when a deal is registered in Salesforce.
Levie added that the Relay beta launches in April and it was co-developed with about a dozen customers for multiple use cases and industries. Broadcom uses Box for content of record as it integrates its various acquisitions.
Box Shield will go along with Relay and put more security control and analytics around content assets. Security pros will know who is downloading content and be able to establish controls and rules based on importance.
The bet on a content layer in your cloud stack. When I asked why Box wouldn't face competitions from the companies it integrates with, Levie noted that Box is "100 percent focused on the content layer." "This is a new way to think about Box. Enterprises have a web of systems and the challenge for customers is having one version of secure content to automate," he said. Levie's bet is that enterprises will build their infrastructure based on best-of-breed cloud providers that will be connected via APIs. "Important content will be automated," he said.
Focusing on industries. Some of the angst of Box's most recent quarter was over the sales transition to focus more on specific industries such as healthcare, financial services, government and media. "The outcome will be larger deals," said Levie. The catch? These implementations are more aligned to verticals and tailored to the customer, but take longer.
Box's AI approach. Levie said that Box, via its Box Skills effort, is focusing more on architecture and AI enablement than developing its own algorithms. Box has set up its architecture so customers can mix and match AI technologies such as Google's vision, AWS' speech to text and Microsoft Azure's translation service. "Our R&D isn't going to compete with the giants so we want to architecturally enable customers to use AI," said Levie.
Box's data center and cloud strategy. One earnings conference call theme was Box's data center transition. Simply put, Box has a hybrid cloud strategy that utilizes public cloud as well as its own data center. Those data centers, currently in California, are being relocated to Nevada.