News

Box CEO Talks Office 365 Integration, Microsoft Partnership

• By Jeffrey Schwartz
• December 05, 2016

Despite competing against Microsoft in cloud-based enterprise file sharing and collaboration, Box is strengthening its integration with Office 365.

The company recently posted over $100 million in revenues for its third quarter and expects to reach $108 million in the current quarter on the back of higher demand.

"The need for Box is clear," said Box CEO and Co-Founder Aaron Levie during last week's earnings call (according to a transcript). "Today, business content is spread across separate legacy systems, on-premises storage, disparate collaboration and workflow tools, and sync and share solutions."

Box recently announced several new ties to Office 365, including integration with the Office 365 Android client, the ability to create files to be saved in Box from Office Online, and improved search sorting and previewing of Excel files in Box.

In an interview last week, Levie discussed the partnership between Box and Microsoft, and weighed the benefits and risks of teaming up with a company that has its own collaboration platform.

"I have to say, Microsoft has really transformed itself over the past couple of years to being a much more partner-friendly and customer-friendly organization, and I can say [the] feedback from customers right now because of that openness has been phenomenal," Levie said. "I think unequivocally what they [Microsoft] are realizing is with billions of people on the Internet and on mobile devices, the market is so much bigger. It is so much broader in terms of opportunity and they are taking advantage of that by partnering and building for multiple platforms."

Asked if Box will provide integration with Microsoft Teams, the new chat platform coming to Office 365 business and enterprise subscriptions, Levie said that presuming there's demand for the service, Box will provide the integration.

"I haven't played with it yet but I would say strategically this is an important space," Levie said. "The future of communications is no longer going to be just dominated by e-mail. I don't believe that e-mail necessarily goes away but I think we are going to use different tools to communicate in different contexts. It's not exactly just instant messaging like they have with Skype and Lync, and it's not as asynchronous as e-mail. It's really a space in the middle. Microsoft is recognizing that this is a very real opportunity, so I think they have to go after this space. That being said, Slack is rapidly growing and I think what we are going to all benefit on as users and partners in this ecosystem is more innovation."

Levie didn't always see Microsoft as an innovator or a good partner; Box was founded over a decade ago as an alternative to SharePoint and Office. While Levie still believes that Box offers a superior cloud-based content management solution for large enterprises, he also said there's room for both Box and Microsoft, while arguing that the two offer very different types of capabilities.

"Our focus is that we're trying to build an incredibly simple yet robust platform to help enterprises manage, collaborate and secure all of their data. And when you look at what we built up, it builds a very different kind of experience than SharePoint or OneDrive," Levie said. "In many respects, we've been building out a very different kind of product over the past decade where it's much more of a platform. It's a real end-to-end content platform that can solve every use case around working with documents, working with files and working with your information. But then, importantly, it connects into every application in your organization and that's what's fundamentally different about Box and any other product in this space."

The new security and governance features Box has rolled out this year are also taking hold, Levie said on last week's earnings call, noting a $500,000 deal from a multinational pharmaceutical company centered around the new Box Governance offering. Box Governance allows organizations to meet data retention requirements and, most recently, security classification.

"Security is massive," Levie said. "It's one of the key reasons why customers will go to Box. It's one of the bigger catalysts that drive our growth and more and more we have chief information security officers that are driving the adoption of Box within the enterprise."