By Robert McMillan
Big-tech incumbent IBM Corp. and Silicon Valley darling Box Inc.
are teaming up to boost each other's sales opportunities in
corporate settings.
IBM's Global Services group gets to weave the hip, fast-growing
Box service into its cloud-computing offerings. In return, Box gets
a new channel into large corporations and a way to reach customers
in conservative industries such as health care, finance and
retail.
The partnership, set to be announced Wednesday, will allow Box
users to store files on IBM's SoftLayer cloud platform. IBM's
mobile apps will deliver Box services on Apple Inc.'s iPhones and
iPads along with IBM's security and content management tools, said
Bob Picciano, senior vice president with IBM Analytics.
"We see this partnership as a kind of blueprint for where
enterprise technology is going to go," said Box CEO Aaron
Levie.
Building Box into SoftLayer will take as long as a year, but IBM
could start building Box's services into custom software
immediately, Box said.
Box's service for storing, sharing and collaborating on
documents has attracted more than 37 million registered users, but
relatively few pay for it. Over the past year, the company has
built a series of services aimed at vertical markets such as health
care, retail, and entertainment that. Marketed as Box For
Industries, those features have helped the company grow its roster
of paying customers to a June total of more than 3.7 million, up 70
percent from a year earlier. They also help differentiate Box from
competition such as Drive from Google Inc. and OneDrive from
Microsoft Corp.
The partnership also will help Box grow its customer base
globally. Box's data centers are located in the U.S., Mr. Levie
said, but IBM has more than 40 data centers in 17 countries,
allowing Box to serve international businesses that are prohibited
by law from exporting customer data.
"We plan to use IBM's cloud in at least a dozen or so key
markets that we're going after internationally," Mr. Levie
said.
IBM, faced with declining revenues in its hardware, software and
services businesses, is looking to companies like Box to spur its
reinvention as a cloud-services company. The transition puts it in
competition with cloud-computing providers such as Amazon.com Inc.,
Microsoft, and Oracle Corp.
The stakes are especially high for IBM, said Frank Gens, chief
analyst with industry research firm International Data Corp.
"There's going to be a whole new set of apps that basically run
every industry," he said. "So the battle now is going to be who is
going to run that new set of apps."
Technologies like Box and the iPhone have sneaked into large
companies because they were popular with consumers. But now
businesses are thinking about them more strategically, said Mr.
Gens. "Now the enterprise is saying, 'Hey this is not just about
letting our employees play with this stuff. This is about creating
competitive advantages.'"
Both companies have been aggressively forming strategic
partnerships in recent months. Last week, Box and Microsoft
announced a deal that would let customers edit Office Online files
in Box. Last year, Cisco Systems Inc. said it would integrate its
collaboration software, called Project Squared, with Box.
IBM has announced a string of agreements that ally the
104-year-old company with fast-growing Internet and mobile
businesses including Apple, Twitter Inc., and Facebook Inc.
Write to Robert McMillan at Robert.Mcmillan@wsj.com
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