A few weeks ago, Box held their first conference, Boxworks, in San Francisco. I was originally planning to attend but events conspired to keep me away. Still, I feel it is a good time to step back and look at where Box is, ask where they are going, and generally see where things stand.

Simply put, Box is doing well. Some felt that the conference served as their coming-out party. Since the conference, Box announced the finalization of a round of funding worth $81 million that they mentioned during the conference and are looking at expansion of their capacity. Box is taking a lot of mindshare and some market share as well.

But is it deserved?

Show me the Money!

Box is quick to share investment information because it shows momentum, growth, and excitement. Other financial information is harder to come by and all of it can be misleading without the full set of numbers. Privately held companies only release numbers that make them look good so you never know how much they reflect the current state of things. One thing that is definite, $81 million is a lot.

One concern expressed by some is the volume of funding versus revenue. Not having all the numbers, I can say that there are two things that makes Box different from traditional Content Management companies when looking at the numbers:

First, revenue is recognized monthly. Box is a subscription service, so you don’t get the big license revenue bubble. What you get instead is a steadily increasing stream of money. Oracle does this with maintenance funds and Box is doing it will all funding. In theory, each month will be better than the previous month. It is that current vector that really matters, not historical figures from 3-5 years ago. Of course, maybe people companies are paying up-front for set time-periods, but without more detail, it is impossible to really throw stones.

Secondly, services, cloud-based or otherwise, are expensive up-front. To be successful, Box is going to need at least 2 major data centers in the US, one in Canada, and one in most major European countries. Each country has its own laws about data and privacy protection. Many companies want to keep their data outside of the US to avoid the Patriot Act while other countries require companies to keep data within the country.

I haven’t even talked about the advanced needs of governments.

If Box is going to win the Enterprise, they have to go global. If they are going to do that, they need to build.

All these data centers cost money in power, equipment and people. What they don’t cost is software as that is already developed.

Of course, lots of good companies have money that aren’t in Content Management. Future revenue will be driven by what Box actually delivers. Let’s look at the state of the product.

They Have Bells, How About Whistles?

I reviewed Ron Miller’s overview of Boxworks and decided I needed more details on the features that were announced, so I broke down and went to the Box blog.

As with any company blog, you are going to have to shift through hype, and Box excels at cooking-up hype. After looking at it, here is what matters to the business customer:

• Improved Synch. This really boils down to having Mac synchs. Very sexy, very important for some markets, but not critical in most. It will make it easier for Box people to use their own software though.
• Trusted Access is actually interesting. It tracks all the applications and browsers accessing the content and let’s you manage it. What that means and how that feels, remains to be seen. It is a basis for detecting and preventing unauthorized access, critical for cloud-based software.

That’s it. Both good features that will help broaden the appeal in companies. Yes, Box improved the SalesForce integration and a few other items, but those are the things that I see that are “real” and relevant to companies I talk to regularly. There is talk of improved workflow over the basic tasking that exists, but without more details, it is just trivia.

So What’s Missing?

Heard this on multiple fronts…Custom METADATA!!! This is a entry level feature. I’m not talking 50 fields with integrated business rules, but 5-7 fields with a simple default would be nice. Dates, text, and lookups would be a nice, simple, start. Tags are great for personal use, but it fails for the larger organization.

To put this in perspective for my regular readers, even WordPress gives me metadata.

To be honest, almost every other gap (CMIS!) is just trivia until the metadata feature appears. Box needs to read about what makes a Content Management System and go from there. Box has a lot of great features and I wouldn’t remove any of them, but they have a while to go until they are a real Content Management system.

That matters. After all, they are targeting SharePoint….

Big Game Hunting

A lot of the twitter debates about Box is their targeting SharePoint and the Enterprise when they are missing key features. Peter Monks clearly laid the baseline argument for the opposition:

To justify the claim that “Box is like Sharepoint” you need to have some minimum set of Sharepoint features (or equiv).

In theory, he is correct. What he neglects is that a lot of SharePoint installation use SharePoint as a glorified file store. While this is changing as people realized that they are doing something wrong, others want something simpler. Box is simpler.

Of course, Office 365 is simpler than on-premise SharePoint.

For those that want more than a glorified file share or basic collaboration, SharePoint works. If you start to scale up and want even more features, right now you turn to the established Content Management solutions like Documentum, FileNet, Oracle, Nuxeo, Open Text, and Alfresco (there are more).

Here is the situation. Box is going to snipe at the bottom of the SharePoint market and get dissatisfied customers and those with no solution. Meanwhile, SharePoint is going to keep sniping customers from the established vendors.

Where will this lead? Nobody knows for sure. Given the history of disruptive technologies, Box and other cloud-based vendors will dominate the market while SharePoint and a couple traditional vendors own the on-premise market.

There is a shot that one of the traditional vendors will make the leap to the cloud successfully, but that is a long, hard road.

Summing Up the Summary

Box has money, drive, knowledge, and a platform. What they need is the features to move them further from Dropbox and closer to every other Content Management vendor. They have some clear market(ing) advantages but they need to hurry up and deliver before someone else does it and takes their momentum to win the market.