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Why Box’s CEO is so cloud crazy

Why Box’s CEO is so cloud crazy

Box CEO Levie foresees all enterprise data heading to the cloud

Aaron Levie, the outspoken founder and CEO of enterprise file sharing and storage powerhouse Box, foresees a time when all enterprise data will head to the cloud, and his company this week is introducing expanded capabilities to speed that transition.

Levie talked to Network World this week ahead of the company’s news about its Zones and Accelerator projects, and also discussed start-ups, the march of the public cloud, and even his past work as a professional magician.

As for Zones, these allow Box customers to specify a geographic area for their data to be stored in, to help them cope with compliance issues generated by laws that mandate certain information be stored. The project started with Germany, Ireland, Singapore and Japan, and today’s announcements say that Australia and Canada are up next. (Australian service should be available in the third quarter of this year, with Canada to follow in the fourth quarter.) Levie says this makes Box the “most global” solution in its market segment.

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The company also announced an update to Box Accelerator, which works by reducing the number of “hops” on the public internet that data have to take.

Here’s what Levie had to say about Zones, Accelerator and plenty more:

Some companies are still resistant to the idea of their data living in the public cloud – how do you address their concerns?

What happens is, that resistance or perceived fear comes from the fact that, when you move to the cloud, it often feels like you’re giving up some kind of control or some kind of security or some kind of value proposition that you had in the on-premise world.

Our belief from day 1 was you’re never going to convert people to the cloud if they don’t either match the level of security and control they get in their on-premises environment or, more importantly, exceed that level of control and security. So if you look at the innovation that we’ve been driving over the past couple of years, it’s all been about actually exceeding what you could do in your on-premises environment.

Things like Box Zones will often exceed what an individual enterprise is able to do themselves. We have the operational scale to be able to go partner with many public cloud vendors to be able to deliver cloud residency in hundreds of different countries. That is a level of operational capability we have that would be very hard to replicate as a single enterprise.

Our whole mission is we want to match or beat any of the control or underlying governance and compliance capabilities you had in an on-premise system, and that’s exactly what Zones is able to deliver.

So you think we’ll eventually get to a point where all enterprise data is living in the cloud?

We’re a little bit crazy at times, but that’s fundamentally our belief. And the reason for that is, we believe that we’re reaching escape velocity in the kind of innovation you can do in the cloud that will be fundamentally impossible to do in an on-premises environment. …

The reason we care deeply about the cloud environment is not because we’re particularly religious about the cloud, it’s that to deliver the innovation that we need to give to our customers, and the speed of innovation, so far that’s only technically possible in the cloud. And that’s why we’re very, very dogmatic about this delivery model and making sure we’re driving as much innovation as possible for our customers.

So not religious, but dogmatic.

Yes, as if there’s a distinction between the two.

Dropbox has been making improvements in its enterprise sales pitch, it’s re-platformed to sell to enterprises – how do you view them as a competitor these days?

We see them quite a bit in the SMB space, just as we see Google or Microsoft in the market as well.

Once you start to look at large enterprises – so companies with thousands or more employees – this is a market where we have defined the industry, and Gartner just named us the most visionary vendor in the … secure file-sharing and collaboration space, and we are continuing to advance our enterprise footprint, our enterprise technology, our enterprise partnerships, to ensure that we’re delivering as much value and differentiation as possible.

To that end, we primarily see Microsoft when it comes to competition in large enterprises, we very rarely see Dropbox, but of course we are always keeping track of what’s going on in the competitive market and we don’t want to slow down and all.

What do you think of the growth of public IaaS like AWS and Azure and Google? Is that a threat to you guys, long-term, or does that dovetail?

It dovetails nicely – we wouldn’t be able to deliver Box Zones if it weren’t for the rapid expansion of public IaaS providers. So we made a decision about three years ago, where we had to either go and build our own infrastructure globally … [but] we made the decision to re-architect our underlying technology to abstract the application from the underlying storage.

By doing so, [this] gave us the ability to link up with different public cloud providers to be able to store data in the regions of our choice or our customers’ choice. So in fact, the more competition there is in the public IaaS space, whether it’s IBM, Amazon, Azure, Google Cloud all competing for more regions, better performance, lower prices, all of those factors mean that our customers are going to get an even better solution when they go with Box.

We’ve built the technology that works across all these different vendors, and we have no particular requirement other than you have to have a high-performing cloud service that we can connect to, and so we’re able to benefit from all that competition and all that innovation in the public cloud space.

Do you see enterprise file sync and sharing merging with related applications like enterprise collaboration?

There are parts that make sense, but it’s interesting – collaboration is this gray area, because one could argue that Slack is collaboration, and another could argue that EFSS [enterprise file sync and sharing] is collaboration, and then another could argue that WebEx is collaboration. And yet those are three very distinct markets.

I don’t think it makes sense to compare Box to WebEx or Slack, but we all share the same purpose, which is that we want to make it so people can do their best work wherever they’re located or with whomever they’re working. So basically, I don’t think it would make sense to have a sort of uber-collaboration market. However, the piece that I do think it makes sense to combine with is content management and EFSS.

We’re firm believers that in the future, the enterprise is not going to want to have lots of different data silos in their organizations – they’re going to want to make sure that Slack and Docusign and WebEx and Office 365 works with the same data set that people can use when people are accessing files on their iPhone or accessing data on their iPad, or being able to work from their computer. So what that means is that you’re actually going to want a platform that helps enterprises manage their content, so this is why we fundamentally are building out a content platform, not an EFSS solution.

Do you think we’re in a tech VC funding bubble? If so, when’s it going to end?

Any time anybody’s ever thought that, they’ve been proven wrong…

Except for that one time…

Yeah, except for that one time, when they were very, very right. I’m gonna say it’s not the kind of bubble that we think of when we think of “bubbles.” So it’s not as severe as the late 90s or early 2000, simply because a couple things are happening that are very different.

First of all, the market sizes for technology are orders of magnitude larger than they were 15 years ago. I think the numbers are something like 50 to 100 million people were on the internet in the last major tech bubble – today, there’s 2 to 3 billion people on the internet. So you have a 20 to 30 to 40 times larger market size for technology.

And you also have technology impacting literally every industry – it used to be in the ‘90s, ecommerce or maybe media or just stuff still in the tech and information space. Today, you can go after transportation, life sciences, healthcare, financial services, so there’s not a limit to where technology can have an impact, which means two things. One is that you can have way more disruption, which is what the VC model survives on, but you can also have a greater diversity of financial outcomes that investors can experience.

We would not have predicted that GM would do a billion-dollar technology acquisition three or four years ago, and yet they bought Cruise [Automation], which was a very small startup, so you now have lots of ways that the exits can begin to occur, which means that there’s a lot more demand for startups and driving capital into the system. So I don’t think we’re going to see a massive pullback, we’re just going to see maybe lower valuations than we had seen in the past year or two years.

Finally, I saw this post on Twitter – you were a birthday party magician?

That’s actually an understatement, I didn’t want to overplay my magician experience. … It wasn’t just birthday parties, it was corporate events and bar mitzvahs, so a wide range of functions.

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