Box CEO Aaron Levie appears confident that the cloud storage provider will reach its previously stated goal of $1 billion in revenue within a three years.
Speaking to Coins2Day after Box’s second quarter FY 2018 earnings call on Wednesday, Levie reiterated that he expects Box hit that revenue mark by the end of fiscal year 2021. He declined to provide guidance on profitability.
In the short term, Box expects to be free-cash-flow positive for the current fiscal year, although it missed that mark for the just-closed quarter when free cashflow fell to negative $14.7 million. Free cash flow is important because it measures how much money a business generates from operations after it pays for capital expenses. That cash can be used to expand or to pay off debt.
Box’s partnerships with the major public cloud providers—Amazon, Microsoft (MSFT), IBM (IBM), and Google—is key to making its collaboration services available to business customers worldwide.
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“What we’ve created is a software product and a platform, and we plan to leverage public cloud services sometimes for storage for international data residency or AI services. We have a layer that lets us pull together cloud services from different providers as needed,” Levie said. “You’ll see us do more leveraging of clouds.”
In the past, Levie has said that Box—which launched after Amazon (AMZN) came out with its first cloud service—would not have had to build and run its own data centers. (Box was founded in 2005. Amazon launched its first cloud storage service the following year.)
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A few weeks ago, for example, Box announced plans to use Google (GOOG) Cloud’s machine learning capabilities to help customers identify data in their work files that could be useful.
In June, Box and Microsoft announced plans to sell Box running Microsoft Azure data centers around the world. But given the economics of building, maintaining, and running data centers, more software companies are opting to partner with the public cloud providers that offer secure, reliable infrastructure—but may also offer some competing products.
This is a bit like sleeping with the enemy: Box competes with Microsoft OneDrive and Google Drive in cloud storage. But Levie said Box can navigate this tricky course. It helps that it claims some Coins2Day 500 sized customers—like General Electric (GEL) and AstraZenica (AZNCF)—among them.
The white-hot competition between AWS and other cloud providers helps as well. They all want businesses to move their data into their own clouds as opposed to the other guy’s.
“Think of Azure wanting to generate external workloads to drive up its utilization,” Levie said. “We’re a significant consumer of public cloud so if you remove potential competitive areas between us, Microsoft would rather have us be on Azure than on our own infrastructure or some other cloud providers.”
Having said that, the key secret-sauce technology underlying Box will run on Box infrastructure for a long time, he added.
“Our database, which is where a lot of the value lies, and all of those data management capabilities will be managed in our own infrastructure for the foreseeable future,” Levie said. “What we want to leverage is the data center resources that others are building as well as some of the more advanced AI and cognitive capabilities these cloud providers as well.”
