The Future of Cloud Storage: Box Co-Founder Aaron Levie Joins OPTO Sessions

Tech entrepreneur Aaron Levie is CEO of enterprise cloud storage and content management company Box [BOX], which he co-founded in 2005 — an era he says now feels like “100 years ago”. 

Today we take cloud storage for granted, but back then, he told OPTO Sessions, “if you wanted to access data from different devices at different locations and work with different people, it was really hard to do.”

His then-revolutionary idea was simple: “What if you could store all the data on the internet securely and make it accessible from any browser, any mobile device?”

Levie, who at the time was an undergraduate at the University of Southern California, left college to set up the company with childhood friend Dylan Smith, who used $20,000 of online poker winnings as seed money. Both have remained at Box ever since, with Smith serving as CFO. Levie has been on Box’s board of directors since April 2005.

Levie concedes Box was not the first company to address data storage issues, but competition in the 2000s fell woefully short: “Either their user experiences were not very modern or up-to-date, or their tools were too expensive… they weren’t fast, they didn’t store a lot of data.” 

Box’s pioneering platform astutely accommodated future tech “mega-trends”, including faster internet, more mobile devices and cheaper storage. “We said to ourselves, if you take all those trends, there’s a lot of tailwinds that should drive the growth of an online service where you store your data securely.”

Timewise, Box’s launch fell in the Goldilocks zone: not too early to break through, not so late the market was ultra-competitive. “There was this narrow window where, because we got in with the right idea fast enough, we were able to accelerate with these market tailwinds.” 

Box, based in Redwood City in Silicon Valley, terms itself an intelligent content management supplier. In March 2024, its results surpassed a milestone of $1bn in annual revenue. 

Focus on Enterprise

Early on, Levie identified two markets for data storage: consumers seeking access to photos or similar; and businesses managing secure documents and financial records. 

He realized the latter would generate the real money: “The consumers don’t really want to pay us anything… We pivoted early on to go after the enterprise market.”

When it comes to his personal business strategy, Levie cites the book 7 Powers (2016) by Hamilton W. Helmer as an influence. “It’s this idea that companies can optimize for different competitive differentiators. It lays out seven discrete powers or competitive advantage dynamics. And there’s a lot of value in being a company that has a greater specialization in a domain than your competitors.” 

He believes one of Box’s core advantages is going “deeper in content. Then there’s a flywheel effect because we learn the next set of use cases a customer has before any of our competition.”

However, players like Microsoft [MSFT], Amazon [AMZN] Web Services (AWS) or Alphabet’s [GOOGL] Google Cloud are rapidly muscling in on cloud storage. How can Box differentiate in an increasingly crowded space?

Rather than competing with big vendors, Levie says its primary strategy is partnering up. “We want to integrate with the other software you use: Salesforce’s [CRM] Slack, Microsoft Teams, Zoom [ZM], Office 365, Google Workspace, Cisco’s [CSCO] WebEx, IBM’s [IBM] technologies and ServiceNow [NOW].”

Unsurprisingly, artificial intelligence (AI) is a leading focus. Box has already integrated generative AI models like Anthropic’s Claude and Amazon’s Titan into its platform. A partnership with AWS, announced in October 2024, will integrate Bedrock, Amazon’s AI foundation model platform.

Box’s strategy remains to cater to every customer’s needs, whether they are individuals or small or big businesses. “We have an enterprise edition for larger companies or those that want more advanced workflows and data governance.”

He says almost 60% of Box customers, in terms of revenue, use its Enterprise Plus plan, which utilizes AI, with a forthcoming Enterprise Advanced plan to focus further on AI.

Expanding Markets 

Levie says Box has worked with everyone from Uber [UBER] to Spotify [SPOT] and Airbnb [ABNB], with around 115,000 current customers, ranging from tech start-ups to law firms: “all the way to the world’s largest enterprises, and everybody in between”. 

The appointment of Samantha Wessels as President of Box Europe, Middle East and Africa in July 2024 signaled a growing focus on the European market. “Europe is an area we want to continue to double down on,” Levie says. He points out that, whether an enterprise is based in the US, France, the UK or Japan, they want the same thing: “To grow faster, be more efficient, have strong cultures that enable their employees to do great work.”

An ongoing area for attention is security and compliance, as data privacy jurisdictions grow more complex. Again, Levie argues Box’s specialism is its power. “You can really entrust a lot of that complexity into our platform where we can keep your data secure.”

Cloud Busting: Gathering Speed

Looking to the future, where does Levie think the industry is heading and what will Box’s growth drivers be? “We have to continue to expand into critical verticals,” he stresses. “We have to expand into critical geographies, as we’ve talked about. Those would be the major vectors of growth.”

The mission to integrate AI is here to stay, but is there anything else companies like Box should do to stay relevant? For any specialized insurgent or disruptor business, he says, one thing matters most:

“You have to move faster than your competition. If you’re not, you lose one of your core systemic advantages as a start-up — to be able to move faster than the more bloated or bureaucratic organizations you’re competing with.”

Listen via Apple Podcast, Spotify, or watch on Youtube.