Cloud content management vendor Box has a new spring in its step these days. Fresh from posting 13% revenue growth in its fiscal 2021 — a year in which its management saw off a challenge by activist shareholders — last month it set a new target of achieving 15-17% annual revenue growth within the next three years. I recently caught up with Aaron Levie, its lively CEO and co-founder, to find out more about its strategy in view of current trends in digital teamwork.
The turnaround from 11% to 13% growth in the past year is the first time Box has posted an increase in its full-year growth rate since before its IPO in 2015. Unlike the heady days of 70+% annual growth back then as a much smaller company, the current numbers show the company building positive cashflow and on track to break even as it approaches $1 billion in annual revenue. While Box didn't share in the sudden spike in adoption that other digital teamwork players experienced during the pandemic lockdowns, its expanded product portfolio is well placed to serve the ongoing shift to digital working in the enterprise, Levie believes. He tells me:
For well over a decade, we've been trying to disrupt this content management market. I think the big breakthrough for us was moving away from just the management of content, to really all of the active things that you want to do with your content. Being able to get analytics on content, being able to get e-signatures on content, being able to automate workflows, obviously being able to protect your data.
This meets an ongoing explosion in all the various kinds of content that needs to be digitally shared across the enterprise. He continues:
We are creating more unstructured data than ever before because of this way of working. Every brainstorm, every project plan, every meeting note, every sales presentation, every contract — all of this is content.
We are seeing an explosion in the amount of content that's being produced, that's needing to be shared, that's being secured. So we see that there's now a really an opportunity to reinvent this whole market.
An important distinction from the enterprise content management systems of old is that the traditional divide between systems of engagement and systems of record no longer holds true, Levie argues. These can't exist as separate silos because content often needs to be reactivated to go back into the digital workflow. As well as storage and archive, a modern content management system therefore needs to be able to handle all this activity as content continuously moves around the enterprise, from collaboration and workflow to signature through to data compliance and back. Box's proposition is a single platform that serves that entire content lifecycle. He explains:
Instead of having your engagement on one platform for your collaboration, and then it retires to a different system, that's not making sense anymore. Our content is almost always in motion — not all of [it], but any slice of our content is in motion, and the user can't predict which ones that's going to be, and certainly IT can't predict either. So we need platforms that can fluidly be able to solve that entire spectrum of use cases.
Box product strategy
Box's product strategy is based on three pillars to support this digitally connected content cloud. One is Box's trademark emphasis on security and compliance. Levie says:
We're going to do a whole bunch of work to ensure that we're driving the deepest level of compliance, security, data protection, all that. Things like ransomware detection, things like data classification, all those kinds of things are super-important.
Another pillar is offering the connectivity to support the work-anywhere, distributed nature of today's digital teamwork, while maintaining open APIs to connect into all the various tools and applications that people use. Levie says:
You're now having more and more work that's happening in a physical environment that also connects to a digital or remote environment. And the cloud is obviously the thing that is going to bring those environments together. And unstructured data is the way that you're going to capture that work.
Digital teamwork tools are now making it possible to digitally capture work that previously remained in the analog space — meeting conversations, whiteboard brainstorms, margin notes. This opens up a whole new area of content to manage. Levie explains:
Let's say we're doing a marketing brainstorm. I want to pull together a bunch of example ad designs and campaigns and have people write notes on those. That's this new explosion of whiteboarding and visual collaboration. Well, that's a content format that was fairly niche, maybe five years ago, that's now exploding in usefulness today in this hybrid world. And so you can imagine we're paying a lot of attention to that space as an example.
The final pillar is empowering digital-first ways of working and supporting digitally connected workflow automation across the enterprise. "We know that we can go way bigger in this area," says Levie. He elaborates:
As you're producing more and more information that is unstructured collaborative information — project plans, visual whiteboards, strategy documents — the really big problem for the enterprise becomes, how do I get that to the right people? That is the workflow. Workflow for a knowledge worker is about sharing ideas, moving projects forward, getting aligned on the same page. Those kind of things I think are what we do extremely well, because the origin of the company was sharing information.
So now you have an explosion of information. We have to automate, in some cases, the way to get that data to people. We have to create additional tools to let you collaborate on that data. This is what is more important than ever before — how do I create the right level of sharing, collaboration, security to enable people to be able to work together? That's our way of facilitating how work gets done in the 21st century.
Box's careful investment in building out its product offering is now bearing fruit in sustained revenue growth and improved net retention rates. From Levie's comments it appears that there's much more to come as the company deepens those capabilities. Its track record in security and compliance, where it has built out an impressive portfolio of enterprise-class offerings, bodes well for what's yet to come in capturing and sharing new forms of content, along with workflow automation.
Focusing solely on content, along with a strategy of open integration to other best-of-breed applications, means that Box can take its place as a key component in an enterprise collaborative canvas, without the distraction of attempting to co-ordinate every aspect of digital teamwork. Instead, the focus becomes "content in motion," a phrase that echoes the mantra of data in motion from streaming data specialist Confluent. Eliminating barriers to connection and enabling the free flow of all forms of data is one of the core characteristics of Frictionless Enterprise, opening up demand from organizations for solutions that will help them adapt to this new digitally connected way of working.