By: Angela Ashenden, Principal Analyst, MWD Advisors
Published: 18th March 2013
This work is licensed under a Creative Commons License
As a UK-based analyst, it’s interesting to watch how US-based vendors manage the move into the European market. For some, it is, for a long time, little more than a line in their marketing materials, perhaps with one or two satellite sales guys based in London. Others however go for a more all-in approach, throwing investment at the exercise to make sure it goes the distance. Fast-growing and venture-backed Palo Alto-based content management and collaboration vendor Box definitely falls into the latter group.
Last week the company visited London as part of its “Box World Tour” (which, amusingly, seems to have just the one stop outside the US), and while here hosted its first European Analyst Day. These types of events are always worth attending, to meet execs in person and gain a more in-depth perspective on the vendor’s overall strategy, as well as its plans for the European market. The benefit of coinciding it with the customer event was that we had the boss in attendance – co-founder and CEO Aaron Levie presented alongside Box’s GM of Enterprise Whitney Bouck, GM for Europe David Quantrell, and Head of Enterprise Product Marketing Robin Daniels. We also had the chance to hear from and speak directly to several Box customers including Schneider Electric, XL Video and Datix.
Unfortunately much of the strategy and roadmap that was shared was under NDA, but what I can comment on is the incredible rate of growth for Box in Europe. The company’s European office (located in London) only opened in August 2012, and yet already employs an astonishing 40 employees, with plans to add a further 60 by the end of 2013. It already has an Enterprise team to support the European market, and has doubled its customer growth in Europe. This rapid expansion is not limited to direct sales—new European partners were also announced, including COMPAREX, Bytes Software Services, and Softcat. What’s more, the company is already looking towards its next moves—including building a presence in both France and Germany. When the company announced its latest round of funding in July last year it pointed to global expansion, and I think it’s clear to see that Box is determined to take advantage of its current market lead to secure the European market.
While it doesn’t strictly fit into my main focus area of social collaboration, I find Box a very interesting vendor to follow for several reasons. First—clearly—its success in this area is fascinating; while the competition (at least at the consumer end of the market) is fierce, Box has done a fantastic job at positioning itself as the business-focused provider of sync and share solutions, gaining a run in the market long before the competition in the wider ECM market and other content and collaboration areas even saw what was happening. Now, of course, new competitors are popping up all the time, and so Box will need to work hard to maintain that position. Secondly, while it is not a social collaboration vendor, social collaboration features are becoming an increasingly important part of the Box user experience, with new capabilities added during 2012 including @mentions, better profile and company directory features, and the ability to assign tasks from directly within a comment thread. While Box might not be planning a direct assault on the social collaboration market (and it’s not—I checked), I do believe that the social collaboration vendors will ultimately encroach more and more on Box’s territory, and it will be interesting to see how the company handles this. At the moment, Box is taking the position of supporting customers in enabling a best-of-breed approach, integrating with vendors such as Jive through the Box Embed capability to surface Box features in the third-party app. Over time though, market consolidation and the cyclic nature of point-solutions-versus-single-stack will start to challenge this position. There’s much jostling to be done before we see the result of that.
As for Box’s impressive growth, my only concern remains one of manageability: while all the company’s staff worked out of the one office in Palo Alto, ensuring new recruits reflected and fitted into the company culture was less of an issue. Building up a new office with all new staff on the other side of the world inevitably means that that culture will change, and the shift from a small company into a mid-sized company can be challenging for all concerned, particularly when you also have to keep your head in a highly competitive and fast-moving market. I think Box has great leadership and is fully aware of the challenge here, but as the pace of growth continues it will be increasingly difficult to manage in a controllable way. One thing’s for sure – if it’s going to be filing for an IPO soon (and the rumours suggest we might be looking at early 2014), there will be plenty happening to provide distraction.
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