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Box Targets Office 365 and SharePoint with Deeper Integration

Box, the rapidly growing enterprise content management (ECM) and collaboration platform provider founded with the goal of offering a cloud-based alternative to Microsoft's SharePoint, rolled out new tools and services, along with updates to its growing ecosystem of native integrations, at its BoxWorks conference in San Francisco this week.

Closely watched on Wall Street, the now publicly traded Box has more recently shifted its ambitions, unveiling new developer and enterprise versions of the Box Platform that will make it easier to integrate enterprise applications with the Box platform.

Also at the three-day BoxWorks event, the company introduced Box Capture, its first mobile-only app for the enterprise. It also announced support for three new content types: HD video, DICOM images and interactive 3-D for Apple iOS-based devices. In addition, Box talked up its partnerships with companies that are also its rivals, including Adobe, Apple, Cisco, IBM and, perhaps most ostensibly, Microsoft.

In his keynote address, Box CEO and Co-Founder Aaron Levie took pains to acknowledge Box's recent agreement with Microsoft to integrate the two companies' respective offerings. The partnership covers integration between Box and a number of key Microsoft products, including Outlook, Azure Active Directory, SharePoint and Office Online, as well as the Office 365 ProPlus suite. Box is also developing a Windows Universal App.

That level of, or any, integration two years ago was unthinkable. Illustrating that shift, Levie called up an old doctored image of former Microsoft CEO Steve Ballmer dressed as an evil pirate, which he then replaced with an image of current CEO Satya Nadella standing beneath a large halo.

"Microsoft is a very important partner," Jeetu Patel, chief strategy officer and vice president of the platform group at Box, told Redmond. "We are integrating deeply with Office 365, because we always start by focusing on the customer -- and our customers want to work in Office and save their work in Box. We said, 'Let's create partnerships so that the cloud becomes a seamless, heterogeneous experience, where different providers are going to make sure that they interoperate with one another for the sake of the user.' That said, I do think there will be some competitive elements with SharePoint. In most of these relationships you'll have some areas where you'll partner deeply, and some where you'll compete."

The détente is noteworthy for a company that once posted billboards on Highway 101 in Silicon Valley mocking SharePoint. Of course, Box failed to displace SharePoint in most shops, though it has made formidable inroads as an alternative content management and collaboration platform. For its most recent quarter ended June 30, Box reported 43 percent growth in revenue. Of its more than 39 million registered users, the company claims just over 50,000 are paying customers. But 52 percent of those are Fortune 500 companies, Box says. Among them are AztraZeneca, Eli Lilly, Gap, General Electric, KKR, Live Nation, Procter & Gamble, Nationwide Schneider Electric and Whirlpool.

Yet the company remains hugely unprofitable, having posted a loss of $43 million for the most recent quarter.

Despite the enterprise inroads Box has made in recent years, SharePoint Point isn't going away any time soon, said Forrester analyst Cheryl McKinnon, who presented a session at the BoxWorks event. Noting the huge installed base of SharePoint on-premises, and Microsoft's plans to roll out a new version next year, McKinnon said SharePoint will continue to play a key role in enterprise collaboration.

"A lot of these organizations are going to take their time moving off their on-premises ECM and collaboration systems," McKinnon said, "so SharePoint on-premises certainly has a very long life ahead of it. Plus, there's the complexity of things like integration with other key enterprise apps like SAP, so movement among these kinds of organizations is likely to take far longer than simpler, newer use cases."

As Microsoft continues to extend the features of SharePoint, the company's core emphasis is on Office 365 SharePoint Online, and its core cloud content storage repository OneDrive for Business. IDC analyst Melissa Webster said OneDrive for Business is vulnerable. "Box doesn't do everything that SharePoint does," Webster said, "but it does do everything OneDrive does. We talk to companies who have evaluated OneDrive, and there are performance issues and other weaknesses. That's a potential competitor situation."

Indeed, as an enterprise file sharing and collaboration platform, Box showed up as a leader in Gartner's closely watched Magic Quadrant, whereas OneDrive for Business is only a challenger. Speaking on that finding at Gartner's annual Catalyst conference in San Francisco in August, analyst and vice president Guy Creese pointed to reliability issues with OneDrive for Business. As reported, Creese said Box is very cloud-centered, so the APIs are very core to the product. In contrast, organizations are just now starting to get OneDrive for Business APIs as the product previously relied on using SharePoint APIs, Creese explained.

Hoping to address some of those issues, Microsoft this week announced a number of improvements to OneDrive for Business, including a new sync client, new user experience improvements in browsers and mobile apps, and some enhanced IT management controls. "Right now, in organizations that are committed to SharePoint, OneDrive fills that mobile-friendly, sync-and-share gap in a pure Microsoft stack," McKinnon said.

Box's Patel argued Box is more than just a sync-and-share tool. "We are a content management platform," he said. "What you'll see us doing over time is getting deeply embedded in workflows and systems that drive a company's business -- things like customer-facing apps that I, as a company, am building, or supplier-facing or partner-facing applications. They will all need a content component. And when they need those content services, we will be the ones powering them."

IDC's Webster said it's in both Box and Microsoft's interests -- and Apple's, Adobe's and IBM's, for that matter -- to partner with Box, despite the fact that it's a threat to their respective ECM and collaboration businesses. "Nadella wants Microsoft Office everywhere, on every device," Webster said. "Here's this huge group of 40 million Box users -- 40 million people who are probably using Office and want to use it in a seamless way with Box. To the extent that Microsoft makes it difficult for those customers to use Word, PowerPoint and Excel with Box, it's going to cost the company. I don't think Microsoft can really say that they are going to own the end-to-end collaborative infrastructure anymore. I think the partnering strategy is a pretty good one."

In addition to Box, Microsoft recently extended its partnership with Salesforce.com, with Nadella even appearing at the recent Salesforce Dreamforce conference. And during his BoxWorks keynote appearance, Apple CEO Tim Cook reached out to the Redmond software maker, declaring that "Office on the Mac is a force."

Box said it has a total of 1,400 integration partners, among them Google (Apps), Salesforce.com, NetSuite, Okta, DocuSign, MobileIron, Symantec and VMware (AirWatch). With the new Box Platform announced this week, the company is aiming to make it easier to tie their apps to its service. Available in two configurations, Box Developer is a free tool for designing and testing apps, while the Enterprise edition is for organizations that want to tie existing applications to Box.

About the Author

John has been covering the high-tech beat from Silicon Valley and the San Francisco Bay Area for nearly two decades. He serves as Editor-at-Large for Application Development Trends (www.ADTMag.com) and contributes regularly to Redmond Magazine, The Technology Horizons in Education Journal, and Campus Technology. He is the author of more than a dozen books, including The Everything Guide to Social Media; The Everything Computer Book; Blobitecture: Waveform Architecture and Digital Design; John Chambers and the Cisco Way; and Diablo: The Official Strategy Guide.

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