Mar
23
2020
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Activist investor Starboard Value taking three Box board seats as involvement deepens

When activist investors Starboard Value took a 7.5% stake in Box last September, there was reasonable speculation that it would begin to try and push an agenda, as activist investors tend to do. While the firm has been quiet to this point, today Box announced that Starboard was adding three members to the 9 member Box board.

At the same time, two long-time Box investors and allies, Rory O’Driscoll from Scale Venture Partners and Josh Stein from Threshold Ventures (formerly from DFJ), will be retiring from the board and not seeking re-election at the annual stockholder’s meeting in June.

O’Driscoll involvement with the company dates back a decade, and Stein has been with the company for 14 years and has been a big supporter from almost the beginning of the company.

For starters, Jack Lazar, whose credentials including being chief financial officer at GoPro and Atheros Communications, is joining the board immediately. A second new board member from a list to be agreed upon by Box and Starboard will also be joining immediately.

Finally, a third member will be selected by the newly constituted board in June, giving Starboard three friendly votes and the ability to push the Box agenda in a significant way.

While this was obviously influenced by Starboard’s activist approach, a person close to the situation stressed that it was a highly collaborative effort between the two organizations, and also indicated that there was general agreement that it was time to bring in new perspectives to the board. The end goal for all concerned is to raise the stock value, and do this against the current bleak economic backdrop.

At the time it announced it was taking a stake in Box, Starboard telegraphed that it could be doing something like this. Here’s what it had to say in its filing at the time:

“Depending on various factors including, without limitation, the Issuer’s financial position and investment strategy, the price levels of the Shares, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, engaging in communications with management and the Board of Directors of the Issuer, engaging in discussions with stockholders of the Issuer or other third parties about the Issuer and the [Starboard’s] investment, including potential business combinations or dispositions involving the Issuer or certain of its businesses, making recommendations or proposals to the Issuer concerning changes to the capitalization, ownership structure, board structure (including board composition), potential business combinations or dispositions involving the Issuer or certain of its businesses, or suggestions for improving the Issuer’s financial and/or operational performance, purchasing additional Shares, selling some or all of their Shares, engaging in short selling of or any hedging or similar transaction with respect to the Shares…”

Box CEO Aaron Levie appeared at TechCrunch Sessions: Enterprise, the week this news about Starboard broke, and he was careful in how he discussed a possible relationship with the firm. “Well, I think in their statement actually they really just identified that they think there’s upside in the stock. It’s still very early in the conversations and process, but again we’re super collaborative in these types of situations. We want to work with all of our investors, and I think that’ll be the same here,” Levie told us at the time.

Now the company has no choice but to work more collaboratively with Starboard as it takes a much more meaningful role on the company board. What impact this will have in the long run is hard to say, but surely significant changes are likely on the way.

Mar
22
2020
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Box’s Aaron Levie says it will take creativity and focus to get through this crisis

The COVID-19 virus is touching every aspect of our lives and having a profound impact on individuals, businesses and society at large. Box’s Aaron Levie has built a successful business from dorm room to IPO and beyond. He spoke to TechCrunch today about the level of creativity and focus that it’s going to take to succeed in the current environment.

Levie pointed out that his company was a fledgling startup when the economic downturn hit in 2008, but he thinks this one could have a much greater impact on business than that one did.

“I think Silicon Valley is going to definitely experience this in a very, very significant way. We were building a company in 2008, and that was extremely hard, but I don’t think it is going to compare to how hard the coming year is going to be,” Levie said.

This morning on Twitter, Levie wrote that we are in uncharted territory, and everyone will have to work together to help navigate this crisis.

He believes the government will need to step in to help individuals and businesses alike. “Businesses, who have lots of employees, need to be supported, but fundamentally we need to make sure that we’re focused on all the workers that are out of work, hopefully just temporarily displaced, but we’re going to need a lot of government financial support to get through this,” he said.

For startups, he advised startups to firmly focus on their mission. “It’s about extreme focus right now. It’s about extreme discipline. It’s about making sure that you’re maintaining your culture during this time,” Levie said.

As for his own company, he’s looking a three areas: his employees, his customers and the community. He said his first priority is making sure his employees are safe and healthy and that the hourly workers who support the business normally are being taken care of as we move through this unprecedented situation.

Secondly, he’s making sure that he supports his customers. To that end the company has removed any license limits as customers deal with increased usage with employees working from home.

He has also joined forces with Cloudflare in an effort to provide small businesses with 90 days of free services to help ride out the situation, and he said they would revisit extending these programs if the situation continues.

Thirdly, he says every business who can has to look at ways to support the communities where they live to assist non-profit organizations who are helping in the response. “This is an event where business communities globally are going to have to put more of a concerted effort on this than any issue in modern history,” Levie said.

Levie is not alone in this thinking by any means. He points to other leaders such as Chuck Robbins, Marc Benioff and Tim Cook, all who have stepped up in recent days to offer help and support.

He has built his company from the ground up to one that’s on nearly an $800 million run rate, but like so many business leaders, he is dealing with a situation which, as he said, has no playbook. Like every other CEO, he’s trying to help keep his business thriving, while not losing sight of the needs of the people in his organization, his customers or his community. It’s not an easy balancing act for anyone right now.

Mar
09
2020
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Box is now letting all staff work from home to reduce coronavirus risk

Box has joined a number of tech companies supporting employees to work remotely from home in response  the outbreak of the novel coronavirus.

It’s applying the policy to all staff, regardless of location.

Late yesterday Box co-founder Aaron Levie tweeted a statement detailing the cloud computing company’s response to COVID-19, the name of the disease caused by the coronavirus — to, as he put it, “ensure the availability of our service and safety of our employees”.

In recent days Twitter has similarly encouraged all staff members to work from home. While companies including Amazon, Google, LinkedIn and Microsoft have also advised some staff to work remotely to reduce the risk of exposure to the virus.

In its response statement Box writes that it’s enacted its business continuity plans “to ensure core business functions and technology are operational in the event of any potential disruption”.

“We have long recognized the potential risks associated with service interruptions due to adverse events, such as an earthquake, power outage or a public health crisis like COVID-19, affecting our strategic, operational, stakeholder and customer obligations. This is why we have had a Business Continuity program in place to provide the policies and plans necessary for protecting Box’s operations and critical business functions,” the company writes.

In a section on “workforce resilience and business continuity” it notes that work from home practices are a normal part of its business operations but says it’s now extending the option to all its staff, regardless of the office or location they normally work out of — saying it’s doing so “out of an abundance of caution during COVID-19”.

Other measures the company says it’s taken to further reduce risk include suspending all international travel and limiting non-essential domestic travel; reducing large customer events and gatherings; and emphasizing health and hygiene across all office locations — “by maintaining sanitation supplies and encouraging an ‘if you are sick, stay home’ mindset”.

It also says it’s conducting all new hire orientation and candidate interviews virtually.

Box names a number of tools it says it routinely uses to support mobility and remote working, including its own service for secure content collaboration; Zoom’s video communication tool; the Slack messaging app; Okta for secure ID; plus additional unnamed “critical cloud tools” for ensuring “uninterrupted remote work for all employees”.

Clearly spying the opportunity to onboard new users, as more companies switch on remote working as a result of COVID-19 concerns, Box’s post also links to free training resources for its own cloud computing tools.

This report was updated with a correction to clarify that COVID-19 is the disease caused by the novel coronavirus; rather than another name for the virus

Feb
11
2020
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Good news for enterprise startups: SaaS helped kill the single-vendor stack

In the old days of enterprise software, when companies like IBM, Oracle and Microsoft ruled the roost, there was a tendency to shop from a single vendor. You bought the whole stack, which made life easier for IT — even if it didn’t always work out so well for end users, who were stuck using software that was designed with administrators in mind.

Once Software-as-a-Service (SaaS) came along, IT no longer had complete control over software choices. The companies that dominated the market began to stumble — although Microsoft later found its way — and a new generation of SaaS vendors developed.

As that happened, users saw a way to pick and choose software that worked best for them, as they were no longer bound to clunky enterprise software; they wanted tools at work that worked as well as the ones they used in the consumer space at home.

Through freemium models and low-cost subscriptions, individual employees and teams started selecting their own tools, and a new way of buying software began to take hold. Instead of buying software from a single shop, consumers could buy the best tool for the job. This in turn, led to wider adoption, as these small groups of users led the way to more lucrative enterprise deals.

The philosophical change has worked well for enterprise startups. The new world means a well-executed idea can beat an incumbent with a similar product. Just ask companies like Slack, Zoom and Box, which have shown what’s possible when you put users first.

Nov
27
2019
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Box looks to balance growth and profitability as it matures

Prevailing wisdom states that as an enterprise SaaS company evolves, there’s a tendency to sacrifice profitability for growth — understandably so, especially in the early days of the company. At some point, however, a company needs to become profitable.

Box has struggled to reach that goal since going public in 2015, but yesterday, it delivered a mostly positive earnings report. Wall Street seemed to approve, with the stock up 6.75% as we published this article.

Box CEO Aaron Levie says the goal moving forward is to find better balance between growth and profitability. In his post-report call with analysts, Levie pointed to some positive numbers.

“As we shared in October [at BoxWorks], we are focused on driving a balance of long-term growth and improved profitability as measured by the combination of revenue growth plus free cash flow margin. On this combined metric, we expect to deliver a significant increase in FY ’21 to at least 25% and eventually reaching at least 35% in FY ’23,” Levie said.

Growing the platform

Part of the maturation and drive to profitability is spurred by the fact that Box now has a more complete product platform. While many struggle to understand the company’s business model, it provides content management in the cloud and modernizing that aspect of enterprise software. As a result, there are few pure-play content management vendors that can do what Box does in a cloud context.

Sep
22
2019
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TechCrunch Disrupt offers plenty of options for attendees with an eye on the enterprise

We might have just completed a full-day program devoted completely to enterprise at TechCrunch Sessions: Enterprise last week, but it doesn’t mean we plan to sell that subject short at TechCrunch Disrupt next month in San Francisco. In fact, we have something for everyone from startups to established public companies and everything in between along with investors and industry luminaries to discuss all-things enterprise.

SaaS companies have played a major role in enterprise software over the last decade, and we are offering a full line-up of SaaS company executives to provide you with the benefit of their wisdom. How about Salesforce chairman, co-CEO and co-founder Marc Benioff for starters? Benioff will be offering advice on how to build a socially responsible, successful startup.

If you’re interested in how to take your startup public, we’ll have Box CEO Aaron Levie, who led his company to IPO in 2015 and Jennifer Tejada, CEO at PagerDuty, who did the same just this year. The two executives will discuss the trials and tribulations of the IPO process and what happens after you finally go public.

Meanwhile, Slack co-founder and CTO Cal Henderson, another SaaS company that recently IPOed, will be discussing how to build great products with Megan Quinn from Spark Capital, a Slack investor.

Speaking of investors, Neeraj Agrawal, a general partner at Battery Ventures joins us on a panel with Whitney Bouck, COO at HelloSign and Jyoti Bansal, CEO and founder of Harness (as well as former CEO and co-founder at AppDynamics, which was acquired by Cisco in 2017 for $3.7 billion just before it was supposed to IPO). They will be chatting about what it takes to build a billion dollar SaaS business.

Not enough SaaS for you? How about Diya Jolly, Chief Product Officer at Okta discussing how to iterate your product?

If you’re interested in security, we have Dug Song from Duo, whose company was sold to Cisco in 2018 for $2.35 billion, explaining how to develop a secure startup. We will also welcome Nadav Zafrir from Israeli security incubator Team 8 to talk about the intriguing subject of when spies meet security on our main stage.

You probably want to hear from some enterprise company executives too. That’s why we are bringing Frederic Moll, chief development officer for the digital surgery group at Johnson & Johnson to talk about robots, Marillyn A. Hewson, chairman, president and CEO at Lockheed Martin discussing the space industry and Verizon CEO Hans Vestberg going over the opportunity around 5G.

We’ll also have seasoned enterprise investors, Mamoon Hamid from Kleiner Perkins and Michelle McCarthy from Verizon Ventures, acting as judges at the TechCrunch Disrupt Battlefield competition.

If that’s not enough for you, there will also be enterprise startups involved in the Battlefield and Startup Alley. If you love the enterprise, there’s something for everyone. We hope you can make it.

Still need tickets? You can pick those up right here.


Sep
06
2019
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Top VCs on the changing landscape for enterprise startups

Yesterday at TechCrunch’s Enterprise event in San Francisco, we sat down with three venture capitalists who spend a lot of their time thinking about enterprise startups. We wanted to ask what trends they are seeing, what concerns they might have about the state of the market and, of course, how startups might persuade them to write out a check.

We covered a lot of ground with the investors — Jason Green of Emergence Capital, Rebecca Lynn of Canvas Ventures and Maha Ibrahim of Canaan Partners — who told us, among other things, that startups shouldn’t expect a big M&A event right now, that there’s no first-mover advantage in the enterprise realm and why grit may be the quality that ends up keeping a startup afloat.

On the growth of enterprise startups:

Jason Green: When we started Emergence 15 years ago, we saw maybe a few hundred startups a year, and we funded about five or six. Today, we see over 1,000 a year; we probably do deep diligence on 25.

Sep
03
2019
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Starboard Value takes 7.5% stake in Box

Starboard Value, LP revealed in an SEC Form 13D filing last week that it owns a 7.5% stake in Box, the cloud content management company.

It is probably not a coincidence that Starboard Value looks for undervalued stocks. Box stock has been on a price roller coaster ride since it went public in 2015 at a price of $14.00 per share before surging to $23.23 per share. It had high share price of $28.12 in May 2018, but the price dipped into the teens in March and was at $14.85 as we went to press. It has a 52-week low price of $12.46 per share.

Screenshot 2019 09 03 17.22.05

 

The company, which began life as a consumer storage company, made the transition to enterprise software several years after it launched in 2005. It raised more than $500 million along the way, and was a Silicon Valley SaaS darling until it filed its S-1 in 2014.

The S-1 revealed massive sales and marketing spending, and critics came down hard on the company. That led to one of the longest IPO delays in memory, taking nine months from the time the company filed until it finally had its IPO in January 2015.

In its most recent earnings report last week, Box announced  $172.5 million in revenue for the quarter, putting it on a run rate close to $700 million.

Aaron Levie href=”https://techcrunch.com/2019/07/08/box-ceo-aaron-levie-is-coming-to-tc-sessions-enterprise/”> will be appearing at TechCrunch Sessions: Enterprise on Thursday.

We emailed both Starboard Value and Box for comments, but neither has responded as we went to publish. If this changes, we will update the article.

Aug
14
2019
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Every TC Sessions: Enterprise 2019 ticket includes a free pass to Disrupt SF

Shout out to all the savvy enterprise software startuppers. Here’s a quick, two-part money-saving reminder. Part one: TC Sessions: Enterprise 2019 is right around the corner on September 5, and you have only two days left to buy an early-bird ticket and save yourself $100. Part two: for every Session ticket you buy, you get one free Expo-only pass to TechCrunch Disrupt SF 2019.

Save money and increase your ROI by completing one simple task: buy your early-bird ticket today.

About 1,000 members of enterprise software’s powerhouse community will join us for a full day dedicated to exploring the current and future state of enterprise software. It’s certainly tech’s 800-pound gorilla — a $500 billion industry. Some of the biggest names and brightest minds will be on hand to discuss critical issues all players face — from early-stage startups to multinational conglomerates.

The day’s agenda features panel discussions, main-stage talks, break-out sessions and speaker Q&As on hot topics including intelligent marketing automation, the cloud, data security, AI and quantum computing, just to name a few. You’ll hear from people like SAP CEO Bill McDermott; Aaron Levie, Box co-founder; Jim Clarke, director of Quantum Hardware at Intel and many, many more.

Customer experience is always a hot topic, so be sure to catch this main-stage panel discussion with Amit Ahuja (Adobe), Julie Larson-Green (Qualtrics) and Peter Reinhardt (Segment):

The Trials and Tribulations of Experience Management: As companies gather more data about their customers and employees, it should theoretically improve their experience, but myriad challenges face companies as they try to pull together information from a variety of vendors across disparate systems, both in the cloud and on prem. How do you pull together a coherent picture of your customers, while respecting their privacy and overcoming the technical challenges?

TC Sessions: Enterprise 2019 takes place in San Francisco on September 5. Take advantage of this two-part money-saving opportunity. Buy your early-bird ticket by August 16 at 11:59 p.m. (PT) to save $100. And score a free Expo-only pass to TechCrunch Disrupt SF 2019 for every ticket you buy. We can’t wait to see you in September!

Interested in sponsoring TC Sessions: Enterprise? Fill out this form and a member of our sales team will contact you.

Aug
09
2019
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Adobe’s Amit Ahuja will be talking customer experience at TechCrunch Sessions: Enterprise

As companies collect increasingly large amounts of data about customers, the end game is about improving the customer experience. It’s a term we’re hearing a lot of these days, and we are going to be discussing that very topic with Amit Ahuja, Adobe’s vice president of ecosystem development, next month at TechCrunch Sessions: Enterprise in San Francisco. Grab your early-bird tickets right now — $100 savings ends today!

Customer experience covers a broad array of enterprise software and includes data collection, analytics and software. Adobe deals with all of this, including the Adobe Experience Platform for data collection, Adobe Analytics for visualization and understanding and Adobe Experience Cloud for building applications.

The idea is to begin to build an understanding of your customers through the various interactions you have with them, and then build applications to give them a positive experience. There is a lot of talk about “delighting” customers, but it’s really about using the digital realm to help them achieve what they want as efficiently as possible, whatever that means to your business.

Ahuja will be joining TechCrunch’s editors, along with Qualtrics chief experience officer Julie Larson-Green and Segment CEO Peter Reinhardt to discuss the finer points of what it means to build a customer experience, and how software can help drive that.

Ahuja has been with Adobe since 2005 when he joined as part of the $3.4 billion Macromedia acquisition. His primary role today involves building and managing strategic partnerships and initiatives. Prior to this, he was the head of Emerging Businesses and the GM of Adobe’s Data Management Platform business, which focuses on advertisers. He also spent seven years in Adobe’s Corporate Development Group, where he helped complete the acquisitions of Omniture, Scene7, Efficient Frontier, Demdex and Auditude.

Amit will be joining us on September 5 in San Francisco, along with some of the biggest influencers in enterprise, including Bill McDermott from SAP, Scott Farquhar from Atlassian, Aparna Sinha from Google, Wendy Nather from Duo Security, Aaron Levie from Box and Andrew Ng from Landing AI.

Early-bird savings end today, August 9. Book your tickets today and you’ll save $100 before prices go up.

Bringing a group? Book our 4+ group tickets and you’ll save 20% on the early-bird rate. Bring the whole squad here.

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