TMCnews Featured Article
Box.net: The Facebook of Cloud Computing?
By Laura Stotler, TMCnet Contributing Editor
There's a fresh face in Silicon Valley, and venture capitalists are making a bet his startup online storage company will do for cloud computing what Facebook (News - Alert) has done for social networking. The company is Box.net and its CEO is Aaron Levie, a 26-year-old USC dropout. Sound familiar? The company and its CEO share a number of similarities with Facebook and its infamous founder, Mark Zuckerberg (News - Alert), and that fact, along with a promising business plan, was enough to convince investors to drop $48 million on the growing enterprise.
Based in Palo Alto (News - Alert), CA, Box.net offers online "storage lockers" for personal and corporate information. Users simply upload their content to the company's servers, and it may be accessed from any device and through any type of Internet connection for ease of sharing. Free individual storage accounts are available with up to five GB of storage space. Box.net makes its profit through corporate customers, who pay $15 per user annually to get administrative control over stored content.
The company recently announced updates to its iPad and IPhone applications, to offer enterprise-grade security and functionality for its mobile content management. Box.net says more than 60,000 businesses and 73 percent of Fortune 500 companies use its services to share, manage and collaborate on content. Indeed, the company was profiled in Forbes last June and is proving to be a formidable opponent for heavyweights like Mozy and Sharepoint.
"We think it may be reaching an inflection point," said George Bischof, managing partner of Meritech Capital, of the investment. He points out parallels to Facebook's position when Meritech decided to invest in it in 2006. At that point, Facebook became available to everyone after being initially adopted by college students. The company has grown from 12 million active users to more than 500 million today, with a market value of $50 billion and a $1.5 billion investment coordinated by Goldman Sachs Group Inc. just last month.
Levie left USC in 2005 and founded the company backed by an $11,000 investment from longtime friend and co-founder Dylan Smith, which had been won in poker games. The company finished last year with a market value of $5 million, and while Levie won't reveal the current value after the venture investment, he indicated it's below $1 billion. He said an IPO won't happen until 2013 at the earliest."Enterprise software is a less sexy space [than social networking], but that has created a huge opportunity for investors like us," said John O'Farrell, a general partner at Andreessen Horowitz. He believes Box.net has the potential to deliver a giant windfall for investors. It would appear that the bets have already been placed.
Edited by Jennifer Russell