Box Floats Into Europe, Aiming For 30% Of Its Cloud Business To Be There In 18 Months
The cloud-storage company Box is today announcing a new step up in its business: it is officially moving into Europe, opening an office in London to focus its efforts in the region, and help it in the landgrab for cloud customers against competitors like Dropbox and Google.
The move is not Box’s first foray into doing business here — Aaron Levie, the CEO and co-founder, tells TechCrunch that European customer numbers have doubled in the last year. And they already account for half of all of its traffic among 11 million users worldwide, and between 12 and 15 percent of its customer base. Opening a full office will help Box focus that effort, he says, and reach their goal of “doubling the share” in the latter category in the next 18 months.
The rapid expansion of Box’s customer base in Europe mirrors that in Box’s home market of the U.S., where, in its freemium model of offering free minimal amounts of storage, its paid enterprise revenues have tripled each year since being founded in 2005.
The company has raised $162 million in funding with backers including Andreessen Horowitz, Bessemer Venture Partners, SAP Ventures and salesforce.com. Levie will not say whether the company is currently profitable, but does note that it is “still focused on growth.”
That’s a crucial strategy in a market where similar services, like Dropbox and Google Drive, exist and are also fiercely competing for the same users.
As part of the process of going native, which Levie is announcing to coincide with an appearance at the LeWeb conference, Levie says that the company plans to hire 100 people in London by the end of 2013 as it builds out its office in central London, headed up by Greg Strickland as international GM and VP of global operations: prior to this, Strickland was VP of business operations at Box.
It will also start to focus a lot more attention on creating localized versions of its interfaces for those who might tire a little of the American English interfaces, with language support included in French, German, Spanish and more.
Pointedly, Levie rules out any big acquisitions for Box in the region at this point. Growth for the company will be organic for the moment, he tells TechCrunch.
One area where Box will take longer to ramp up is in the area of local data storage. There is some of this here already but Levie says Box is still evaluating partners for a wholesale migration of data centers to the region. The completion of that will see the company also increasing its efforts to sign on more larger enterprises.
It’s been a long time coming, he says, but now seemed like the perfect moment to “pull the trigger.”
“Every year we’ve thought ‘is this the year to go to Europe?’ Finally at the end of last year we decided to develop a full international operation,” he says. “It’s the right time with the economy and the buying signals we’re seeing from businesses,” whose interest in cloud-based services is only growing. He says that it remains to be seen what kind of a longer-term impact the European economy will have on Box’s business but does point out that a lot of drive towards cloud services does come out of recessionary times.
The 12-15 percent revenue share in Europe, he says, has “happened without us doing anything explicitly.” That has seen the company secure a number of notable customer wins: the “largest car manufacturers in Germany” (unnamed); some of the “largest publishers and media brands in the UK”; telcos, including the carrier O2; the UK airport operator BAA; and one of the hot names in music right now, in addition to European operations for big global brands like Proctor and Gamble.
An expanded strategic partnership with HP, also being announced today, will also contribute to that growth: HP and Box will work on “exclusive offers” that the IT giant will resell to its small/medium business customers in the EMEA region.
With all of these, the implementations are not for massive customer deployments but for internal employee purposes, with people using Box to exchange files and collaborate with each other.
“With Box, we were able to build our customized iPad app quickly, mobilizing our sales force and giving us the competitive edge we need to remain on top,” Charlie Hunter-Schyff, head of planning at O2 Media, said in a statement.
But a past partnership with LG points to at least one direction those relationships could develop: LG has been offering 50G of free Box storage for their Android smartphones and tablets to customers in the U.S., and that program saw one million downloads in the first week.
“Those users will take a bit longer to convert into paid (can’t share specifics) simply because it’s a newer audience coming on to Box, and we convert primarily businesses so it will take a bit longer for those users to work the product into their organizations,” he tells us.
He also pointed out that some business relationships have actually been used for customer services: the San Francisco Giants have built a consumer app that it hosts on Box, “but no one is building a Twitter. The main problem we try to solve is how to make your business work better with partners, colleagues and customers.”
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