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Box Idea Proposal (BOX)

Box Idea Proposal (BOX)
 

Does Box offer the right enterprise features and potential cost savings to attract big businesses to its platform?

Report Available: May 4, 2017

Blueshift’s initial research found BOX growing its revenue as a content management platform for enterprises. The company is positioning its cloud-based software as a tool that meets all the key enterprise needs and offers potential costs savings compared to older, on-premise solutions. However, BOX faces a challenge in wooing enterprises to its services as MSFT and GOOGL offer free document management services as part of larger business software packages.

 

Observations

1. BOX’s Q4 earnings and revenue for fiscal year 2017 beat analyst expectations, with revenue climbing 29% year-over-year. Quarterly billings were up 22% and the company, which went public in 2015, reported positive free cash flow for the first time. Its profit guidance for the current quarter disappointed, though executives attributed the earnings outlook to its aggressive investment plans. For the full year, BOX expects revenue to grow 26% to about $500 million.

2. BOX, a cloud content management platform, is fighting for market share in a highly competitive field that includes Dropbox, MSFT’s OneDrive and GOOGL’s Drive. Box pitches its software as a superior enterprise-grade tool with high-level security, compliance and administrative features that help big businesses share and manage data. The company is also positioning itself as a way for enterprises to save money by migrating data to the cloud, allowing them to rip out or not replace expensive on-premise hardware that was necessary for previous generations of document management software, such as Open Text’s Documentum. Does Box offer the right enterprise features and potential cost savings to attract big businesses to its platform? 2 75 Second Avenue, Suite 605, Needham, MA 02492 | www.blueshiftideas.com Idea Proposal

3. However, some critics worry that the competition will send pricing for this type of software on a race to zero, especially since MSFT’s and GOOGL’s solutions are already free as part of larger enterprise software suites. BOX has a free version for individual users but to grow revenue, the company needs to convince enterprises that its platform offers enough value to be worth paying for. BOX offers some volume discounts to attract large enterprises but can also upsell customers with additional modules that can add as much as 30% to the price of the core license. The company said FY 2017 pricing was stable at about $100 per user.

4. Among its efforts to appeal to enterprises, BOX is partnering with IBM on a workflow tool, removing friction from work processes to keep them moving in an organized and automated way. The company also is beefing up its sales force and trying to expand in international markets such as the U.K., Germany and Japan. 3 75 Second Avenue, Suite 605, Needham, MA 02492 | www.blueshiftideas.com Idea Proposal Box Relay workflow dashboard Does BOX offer enough value to enterprises to sway them from free content management tools? What are its key differentiators for big businesses? Does its vendor-neutral approach appeal to CIOs? Will BOX face severe pricing pressure?

Does BOX’s approach save enterprises money on the hardware side? Will BOX’s investment in its sales force start to reap results this year? To answer these and other questions, Blueshift will issue a market research report by gathering data from independent sources in the following areas: CIOs at enterprises using BOX, CIOs at enterprises using competing options, BOX Resellers/Channel Partners and Industry specialists.

 

Companies: Box Inc., (BOX), Microsoft (MSFT), Alphabet Inc. (GOOGL), salesforce.com Inc. (CRM), IBM (IBM)

 

Research Begins: April 17, 2017