There is perhaps no person less likely to start and run an enterprise software company than Box co-founder and CEO Aaron Levie. Which is perhaps the reason he's so well-qualified to disrupt the traditional enterprise content management market.
He simply didn't know any better.
As Levie noted in a recent interview, Box has "benefited from our ignorance about the category." Venture capitalists are often inclined to pour money into entrepreneurs who have been there, done that. But in the case of Levie, who has now raised $284 million, they've been betting big on an entrepreneur who doesn't fit anyone's profile of an enterprise software executive, and who had no previous experience with enterprise content management.
But that, as Levie informs us, is precisely the point:
"Assume you've never seen a Magic Quadrant or Forrester Wave and you just built a tool that was explicitly trying to solve a particular problem which, in our case, was 'How do I share content with N number of people?' Had we known the market we probably would have built something that conformed to existing models, but instead we built a product that prioritizes simplicity and ease-of-use. This has turned into a classic 'innovator's dilemma': a simple approach is much easier to build upon than it is to add simplicity to the complex products already out there. Along the way, the industry has turned around and redefined content management to include what we do."
Solving A Different Problem
Levie, in other words, wasn't trying to solve an "Enterprise Content Management" problem. He and co-founder Dylan Smith were simply trying to make it easy to share content with each other, and any other number of others. This is a sound approach. Had Box set out to build a better Documentum, then the dominant vendor in the ECM market, it would have had to architect to solve the complex business processes that Documentum sets out to solve, and would have been much more complex as a result. As Levie stresses, if you start from that complex but feature-rich baseline, "It's far harder to add in simple use cases after the fact. Such solutions start hard and then can't do easy."
So is Box content to be a lightweight, as it were? The simple-but-weak content collaboration tool that gets used for collaboration but not the "hard" ECM problems that meatier solutions tackle?
This may be the wrong way to look at things, according to Levie. He reveals that Box is constantly debating this, with former EMC Documentum CMO Whitney Tidmarsh ironically advocating that Box not go down the ECM feature-function path. It seems, however, that Box is more focused on embracing a significantly changing market than chasing old markets and legacy definitions of necessary feature sets:
"We know that a deep drug application process, for example, is still going to be better served by a Documentum or Alfresco, although we are seeing a different slice of those same businesses move to Box. Fundamentally, driven by mobile devices, these brand-new use cases--regulated and unregulated--have arisen, driven by helping as many people as possible access content through mobile. Investment banks, pharmas, etc. are some of our biggest, most recent customers."
These new use cases are driven by less-structured workflows, though they retain some structure. Box, in sum, needn't replicate the functionality of yesterday when its aim is the applications and workflows of tomorrow.
Not that this is going to be easy. As Box competitor and Alfresco evangelist Jeff Potts highlights, "As consumer-grade tools move to enterprise, deployment options become an issue. [They c]an't be all cloud right now." It's a valid point but, again, may slightly miss the mark. As ReadWrite has reported before, Box is driving 100% revenue growth, selling into 92% of the Fortune 500, with over 140,000 companies among its users. Maybe all these companies are using Box for lightweight business requirements, but if so, I doubt Levie is complaining.
Box has built a horizontal platform that hits a content collaboration nerve across disparate industries. That's a great position to be in, especially as Box is now embracing industry-specific solutions, driven by specialized partnerships and go-to-market programs for 10 vertical industries. The core product will remain the same, but through these add-ons Box will become an even better solution for different verticals. That's the goal for 2013: enter these industries in a big way.
If Levie has no clue what he's in for, that's for the best. Ignorance of the ECM market and its challenges seems to have served him well up until now. Hence, when he says that "This whole ecosystem is going to explode going into 2013. The enterprise will be far more interesting than consumer in 2013," it's hard not to give him the benefit of the doubt.
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