Bloomberg News

Box Inc. Starts Mobile Cloud Service in Challenge to Oracle

March 28, 2012

Box Inc. will offer corporate clients access to applications on remote servers via Apple Inc. (AAPL:US)’s mobile devices, challenging software makers such as Oracle Corp. (ORCL:US) and International Business Machines Corp. (IBM:US)

The Box OneCloud service lets business clients use more than 30 applications, such as Quickoffice, PDF Expert and Adobe Systems Inc.’s EchoSign, and store all their data on Box’s network of servers. Los Altos, California-based Box will work to expand the available programs in coming months, Chief Executive Officer Aaron Levie said in an interview.

Box is one of a bevy of startups, also including Dropbox Inc., that are trying to gain a foothold in the market for business collaboration -- now dominated by software giants like Microsoft Corp. (MSFT:US), Oracle and IBM. As more companies move computing tasks off their own servers, offsite workloads in the so-called cloud will increase by an average of 50 percent a year through 2014, according to a Morgan Stanley report last year.

“This is one of the most strategic and significant events for our company this year,” Levie said. “A very significant portion of our long-term revenue will come as a result of this.”

The company says it has more than 10 million users, including those from about 82 percent of Fortune 500 companies. Box, which was founded in 2005, may consider going public in the next several years, Levie said.

Investors, Rivals

Box doesn’t disclose its sales. The company offers customers some free access to servers, then charges for additional services. Its business-access plan costs $15 a month per user.

The company has raised $162 million from investors including Salesforce.com Inc. (CRM:US) and SAP Ventures, the venture capital firm affiliated with software maker SAP AG. (SAP)

Still, Box faces significant competition. Oracle, the largest seller of database software, has been making acquisitions to broaden its offerings in cloud computing. In February, it agreed to buy Taleo Corp., a maker of online human- resources software, for $1.9 billion.

Web-storage provider Dropbox raised $250 million in October from investors including Index Ventures, Benchmark Capital and Goldman Sachs Group Inc. At the time, the service had more than 45 million users.

“More and more corporate customers are going to insist the solution is deeper,” Michael Fauscette, an analyst at researcher IDC, said in an interview. “Other vendors could compete and, potentially, partner with Box. It’s probably a co- existence strategy.”

To contact the reporter on this story: Olga Kharif in Portland, Oregon, at okharif@bloomberg.net

To contact the editor responsible for this story: Thomas Giles at tgiles5@bloomberg.net


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