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Box-Microsoft: A Partnership for a Complicated World

Later this year, Microsoft and Box will begin co-selling the Box cloud content management platform with Azure on the back end.

The deal announced this week involves competitive complications for both companies. For Microsoft, a main wrinkle is that Box technology competes directly with OneDrive and SharePoint and indirectly on other fronts. For Box, in addition to the OneDrive/SharePoint coopetition, the company must navigate its existing relationships with the other major cloud platforms, Amazon Web Services (AWS) and Google Cloud.

By involving sales and go-to-market investments, the Box relationship with Microsoft is different than its deals with AWS and Google. As Recode noted in a report on the partnership, Box currently stores customer data on its own servers and backs the data up to AWS, while it has arrangements for delivering Google's apps to customers, as well.

As part of the Microsoft agreement, Box will also be looking at ways to integrate Azure Cognitive Services into its products. Some possibilities, according to the companies, include video indexing and other advanced search capabilities.

One interesting twist is that Box will also look to Azure's global datacenter footprint to accelerate its own data sovereignty efforts. There are concerns in many countries outside the United States about the U.S. government having access to data held by U.S.-based companies. Microsoft views those concerns as a threat to its ability to profit from its massive investments in building datacenters around the globe, partly explaining the very public fight between Microsoft and the U.S. Department of Justice over the government's right to customer data held on servers in Ireland.

Faced with similar customer pressures, Box launched Box Zones in April 2016 and the data sovereignty-focused service is available in eight countries. As part of the agreement, Box plans to piggyback on Microsoft's substantial geographic Azure investments to expand its own service. The companies noted that Azure has 40 datacenter regions around the world, giving Box a lot of directions to expand its service.

If Box ends up using Azure for Zones, it will be a case of one U.S. company using the infrastructure of another U.S. company to get around customer concerns that arise, in part, from worries about the security of data stored by U.S. companies.

Posted by Scott Bekker on June 28, 2017 at 12:43 PM