Box pitches into tech philanthropy debate with price cuts to launch new arm

Profile picture for user slauchlan By Stuart Lauchlan May 28, 2014
Summary:
Box is offering new third sector customers free and half price subscriptions, the latest development in the ever-widening debate on US tech corporate philanthropy as espoused by Salesforce.com CEO Marc Benioff.

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Yesterday, cloud collaboration firm Box made its own contribution to the growing profile and debate around philanthropy in the technology industry with the announcement of a new initiative that will see the firm donate 10 free licenses to any qualified non-profit organization worldwide. Beyond that initial number, further seats will come in with a 50% discount.

As part of the launch of Box.org, Box suggested that 1.8 million registered non-profits today have an average of six employees or less, so those free ten seats will go a long to meet many organizations needs.

That said, the firm’s list of third sector customers - around 1000 in total - includes the likes of the World Bank Group, the United Nations Foundation, the International Rescue Committee, Teach for America and the Leukemia and Lymphoma Society, all of which have greater demands in terms of the number of subscriptions they need.

Karen Appleton, Box’s President of Business Development, has been a driving force behind the new venture. In a blog posting, Appleton cites various examples of Box’s third sector customers:

Take, for example, the World Bank Group, a vital resource for financial and technical assistance to developing countries around the world. With Box, the World Bank is helping employees – from Baghdad to DC – securely share files with partners in the government and private sector, easily collaborate with colleagues, and access their files and folders from anywhere in the world, on any device.

Teach for America is also leveraging cloud technologies, like Box, to enable change in a more accelerated way. Box provides the right balance of user experience and enterprise technology to help meet the needs of the organization as it expands educational opportunities for children facing the challenges of poverty.

With an IPO still looming, Box was vague on specifics of pricing and what a 50% discount means in hard cash. It was also a little unclear what the 1000 or so existing customers could expect under the new pricing arrangements.

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Karen Appleton

A new, qualifying, customer will get the free seats and the 50% off, but already live customers are being advised to contact their Box account managers to discuss what happens with their existing subscriptions. No doubt it’ll all come out in the wash, but I’d expect Box to be on the receiving end of some curious phone calls from third sector customers pretty promptly.

Beyond this initial pricing offer, the implication from yesterday’s announcement is that there is more to come.

The firm has hired corporate philanthropy veteran Bryan Breckenridge to be Executive Director of Box.org as well as pulling together an advisory team of industry leaders and seasoned executives from leading charitable and philanthropic organizations, including the Clinton Global Initiative, Salesforce Foundation, and the Milken Institute.

The bigger picture

With Salesforce.com CEO Marc Benioff agitating to push his fellow CEOs into greater action, the Silicon Valley tech industry’s stance on philanthropic endeavors has been in the spotlight in recent months.

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Bryan Breckenridge

At the CODE conference yesterday, Benioff, probably now the best known face of tech philanthropy outside of Bill and Melinda Gates, warmed to a familiar theme when he declared that the Valley and those who profit from it need to give back now:

San Francisco is a great city, and we are lucky to be there… But this is not its first gold rush.

“I think the main issue is that tech has to be committed to giving back to the city. Every company needs to have a philanthropy strategy, even from the start.

Benioff and his wife, Lynne, are among the biggest philanthropists in San Francisco having made two separate $100 million grants to UC San Francisco children’s hospitals and donated nearly $3 million to San Francisco’s middle schools.

As well as setting up the Salesforce.com Foundation, which hardwires philanthropy into the company’s DNA, Benioff has recently been acting as San Francisco’s conscience and calling the bluff of his fellow CEOs.

Salesforce.com’s 15th birthday in March was used as the launch of SFGives, a scheme run with non-profit Tipping Point, to raise $10 million over the next 60 days for Bay Area good causes. Benioff set out with the goal of persuading 20 businesses to contribute $500,000 to achieve this goal.

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Marc and Lynne Benioff

He said at the launch:

We have to keep a light on this idea that if you come to San Francisco, you need to also be committed to giving back. You can't just take from our city. You can't just come here from another city, another state, another country, start a company, take advantage of all of our resources - and then leave with all of your money that you created.

Now is the time that we have to make it crystal clear that tech is an industry that not only adds value through innovation, it adds value through philanthropy.

Strong words, and not ones that will necessarily win friends everywhere. As Tipping Point Community CEO Daniel Laurie admitted:

We'll win some people over, and some we won’t. But it won't stop us from continuing to push.

In fact, around ten well-known tech giants apparently refused to play ball, although others, such as Google, Workday, Microsoft, Box, Apple, Dropbox, LinkedIn and Jawbone, have stepped up to the mark to ensure that the $10 million goal was reached earlier this month.

The question now is: how to convert that $10 million into $100 million, a figure Benioff has bandied around in interviews. His ambition is clearly to change the culture of the tech industry’s stance on giving back which is a long term project. But as he says:

“We don’t want to be the industry that looks like The Wolf of Wall Street.”

My Take

Box founder and CEO Aaron Levie is someone Benioff has cited to me as an example of the kind of next generation Silicon Valley CEO that earns his respect. The formation of Box.org isn’t going to do anything to diminish that. (Although he might cheekily ask why only a 50% discount, why not free?)

What will be interesting is to see how far the philanthropy gene embeds itself in the Box culture. Will it become as inherently part of Box as it is at Salesforce.com? It depends on the culture of the company.

Benioff has stated in the past that while Oracle, for example, makes its own, laudable philanthropic efforts, such as Oracle Giving, they just aren’t hardwired into the corporate mindset in the same way as the Salesforce Foundation.

For next generation firms like Box, there is a real chance to be different - and to make a difference.

Disclosure: at time of writing, Oracle, Salesforce.com and Workday are premium partners of diginomica, while Box is a partner.