We need European datacentres to 'be successful' says Box CEO

Enterprises have long lived in a world where storage meant buying in bulk, preparing for possible influxes of data and signing cheques to make even the wealthiest of businesses wince.

However, with the growth of cloud computing, a shift has been occurring where rather than stockpiling terabytes of hard drives "just in case", a more flexible option of utilising other people's datacentres on demand and paying only for what you use has emerged.

Box is one of the companies that has been driving this change. Based in California, with humble beginnings in a dorm room like many of the best Silicon Valley start-ups, its founder and CEO, Aaron Levie, has regularly been voted one of the upcoming techies to keep an eye on.

The company was founded in 2005 and has raised over $265m in venture capitalist funding, with analysts now valuing it at around $1.5bn.

However, it started as a predominantly consumer-focused business, enabling individuals to upload their files and share them with family and friends around the world.

But that world is changing and now enterprises want to get a slice of the action.

"If you think about how enterprises traditionally bought technology, it was very much a process where a CIO – or somebody at the top of your organisation – would decide what technology is going to be applicable for your entire organisation," said Levie, in an interview with Computer Weekly.

"They will purchase it [and] spend years implementing the technology into your organisation, only to eventually find out that either the technology doesn't get used or that they need some new update to be far more relevant for how their organisation works.

"This was the paradigm that the enterprise lived off and thrived on for decades."

Yet, employees were using the likes of Box and its rivals - Dropbox, Google, Facebook etc - in their personal lives and wanting to make the change at work to use these simpler tools to boost productivity.

"What has finally happened is for the first time – in such a big way – individuals and end-users are having a much better time with their technology in their personal lives and they are now starting to bring that technology into the workplace," said Levie. 

"It is changing the demand and the needs for the enterprise and the enterprise can no longer ignore it and adopt technology that does not make all users have an amazing experience."

The CEO also claimed these circumstances put pressure on the more traditional suppliers to up their game and give better-performing technology to their customers.

"The natural trait of the technology ecosystem [is] if you are a really big company, you don't have a lot of incentive to break the status quo," added Levie. "In fact, you make the vast majority of your money on the status quo, so there isn't a lot of reasons that an enterprise software company would want to deliver cloud sharing of information if they were making billions of dollars from on-premise collaboration software."

"So finally what is happening is the demand from within the enterprise. [Suppliers] have to finally change and I think that means they are looking at what we are doing."

And that they are. From old incumbents like Oracle and HP, to the newer enterprise firms of Salesforce, it seems every technology firm wants to offer cloud storage to keep their customers signing up. But is that not frustrating for a company like Box which was doing it first?

"We aren't the only ones, they are looking at what Workday is doing, looking at what a bunch of companies are doing and realising that they have to build better software for enterprise and that is what's so exciting," he said.

"Ultimately, enterprises are going to win because they are going to get much better technology and it is going to make them much more productive and that is a good thing for the market in general."

The enterprise can no longer ignore technology that does not make all users have an amazing experience

Aaron Levie, CEO, Box

Last week, Salesforce launched its own enterprise cloud storage/collaboration system called Chatterbox, meaning Box has yet another competitor with a similar name, but a more traditional, enterprise focus. However, despite some of Levie's comments at the time, he told us he thought it was positive for his firm.

"Salesforce has a much larger footprint than we do," he said. "That means they can go [and get a better view of] the criteria that customers are looking for for their technology."

"We think Salesforce and others talking about having your data in the cloud and being able to share it easily is actually going to help educate the market that this is a very important category and, when that happens, we think we are in the strongest position to take advantage of it."

Levie is clear that regardless of how some view his firm as consumer-driven, it is doing everything to make itself an enterprise-ready option.

This week, Box will make a raft of new announcements, such as two-factor authentication, a partnership with email security specialists Proofpoint and a new API enabling enterprises to extract data from the service and run it through its own business intelligence and big data platforms to get the most out of the information.

"We don't think the traditional suppliers can even solve the problems that customers have," he said. "Customers are having challenges around how do they access information on mobile devices, how do they collaborate with people anywhere they are in the world, how do they get their data in different kinds of applications, not just the ones that are on premise and not just the ones that are sold by their traditional go to suppliers."

"[With] all those kinds of issues, we don't think there is a lot of traditional options for customers [and] that they have to look at cloud solutions to be able to solve those issues. In that landscape, we think we really have the best technology for those customers."

But one thing that is still an issue for companies in Europe is Box's lack of a European datacentre. The company has introduced a feature called Box Accelerator to speed up the data transfer in other countries around the world, but the fact remains, data is stored in a datacentre in California and many enterprises just won't be happy with it, from a security and regulatory point of view.

Levie said there was some data, like marketing files or product brochures, that did not need to be held within the boundaries of the European Union. However, the CEO did concede his firm would have to address this issue if it was to make real headway in the enterprise space.

"Ultimately, to be successful, we do think our technology will have to be resident in Europe somewhere," he said. "I would say that on the long-term roadmap, you are going to see it happen with that technology footprint of storing data in a global way."

"In the near term, we can get tremendous growth opportunity for how we do things today, but in the long run you will see us solve that problem in a much broader way."