Rocked recently by reports that it has delayed its IPO, Box has rebounded with a major customer win, snapping up General Electric, which plans to roll out the cloud storage and file sharing service to its 300,000 employees worldwide.
The deal, announced Thursday, represents Box’s largest single customer deployment, and boosts its credibility as an enterprise IT provider as it fiercely battles rivals like Microsoft, Google, IBM, Dropbox, EMC, Citrix and Egnyte.
Adding GE to its customer portfolio will also help dampen concerns about Box’s finances. In its IPO (initial public offering) registration statement, filed in March, Box disclosed that it isn’t profitable and doesn’t expect to be anytime soon.
“Moving to a cloud technology like Box allows us to centralize all of our content and provides more efficiency, speed and simplicity for our employees,” said Jamie Miller, GE’s CIO, in a press release.
In a separate blog post, Box CEO Aaron Levie said the deal had been in the works for about two years.
“[GE] employees need to securely share corporate information from multiple devices. They need to collaborate not only with each other, but also with partners, customers, and vendors globally. And every worker, whether a corporate marketing leader or someone servicing a jet engine, needs access to data in real-time, from anywhere,” Levie said.
GE’s endorsement of Box is also further validation of the trend among businesses to store data in vendors’ cloud data centers, where employees can access files via the Internet and share them from a variety of devices, including smartphones and tablets.
Box, founded in 2005 by Levie and CFO Dylan Smith when they were both still in college, jumped on that bandwagon early on, becoming a leading provider of cloud storage and file sync and share services. Other Box customers include Procter & Gamble, McAfee, Pearson and eBay.
Based in Los Altos, California, Box has about 1,000 employees and closed its fiscal year on Jan. 31 with revenue of $124.2 million, up 111 percent year-over-year, and a net loss of $168.6 million, compared with a net loss of $112.6 million.
It has about 34,000 paying corporate customers, 40 percent of them Fortune 500 companies. However, only 7 percent of its 25 million end users pay for the service. In the IPO registration, Levie said this freemium model has been key to the company’s growth, because it allows individuals to bring in Box to their workplaces at no cost and without assistance from the IT department.
Once Box is in via this bottom-up approach driven by end users, IT departments often embrace the service, which has an extensive set of IT management and security controls, because, unlike Dropbox, it has been designed from the start for workplace use.
Last week, reports from the Wall Street Journal and Bloomberg attributed to anonymous sources said Box had delayed going public due to the stormy climate on Wall Street for technology stocks.
In response, Box said it has never had a set date for going public and that its plans has been all along to do so whenever it makes the most sense.