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we're actually launching some products that will um let you be more selective around who can see your content
it won't be as dominant um dominantly Microsoft Oracle IBM going into the future it will look a lot more like Like An Open Marketplace
we would love for there to be you know three major platforms and the business like ours and I think most startups you you gain leverage by there being fragmentation in the marketplace because any one of your you know traditional incumbents can go support their platform very deeply but they can't support all of the the platforms
we're going after what we think is going to be a TENS of billions of dollar opportunity
there's been, you know, very clear startup opportunities in the form of Replit, Cursor, Windsurf, Lovable, Cognition, like, like, holy crap. If, if we had said 10 years ago that there'd be 20, 30, $40 billion of market cap in the coding space. And we would have been like, well, kind of GitHub is the only thing that's ever really even exited in the coding space. How could there be 30, 40, $50 billion within just a three year period that wouldn't sound plausible. And so, and yet that, that, that,
like, um, uh, my, my, my dad was asking like, what, what, how did whiz get sold for, you know, the $30 billion and we're whiz customer. And I think the technology is fantastic.
I think like writ large coding agents, you know, seem to be working again, maybe we could define different levels of agenticness. Um, uh, but, but what you're seeing in, you know, cursor, windsurf, uh, replit, you know, level of bolt, et cetera, like obviously, you know, probably different use cases, like probably 80% of the vibe coding is more fun and it's interesting to watch and not going into production.
as a single programmer, you could probably switch between Cursor, WindSurf and, you know, Replit and a few others, but as a, as a network of 500 engineers in a company, and I've done embeddings on the whole code base and, and I'm, I'm talking to all the different, you know, systems it's wired up to, wow, change management on that, you know, becomes a lot harder.
what you're seeing in, you know, cursor, windsurf, uh, replit, you know, level of bolt, et cetera, like obviously, you know, probably different use cases, like probably 80% of the vibe coding is more fun and it's interesting to watch and not going into production, but I could see a lot of, you know, product market fit for, Hey, I have this internal IT tool.
you could, as a single programmer, you could probably switch between Cursor, WindSurf and, you know, Replit and a few others, but as a, as a network of 500 engineers in a company, and I've done embeddings on the whole code base and, and I'm, I'm talking to all the different, you know, systems it's wired up to, wow, change management on that, you know, becomes a lot harder.
what you're seeing in, you know, cursor, windsurf, uh, replit, you know, level of bolt, et cetera, like obviously, you know, probably different use cases, like probably 80% of the vibe coding is more fun and it's interesting to watch and not going into production, but I could see a lot of, you know, product market fit for, Hey, I have this internal IT tool.
we're still waiting on some reasoning model breakthroughs from, you know, open AI or cloud or, or something to, like, just get that extra 3% of accuracy that you're going to need.
obviously probably not at this point, like we've reached, we've reached a convergence on model quality for most consumer use cases to be satisfied
the areas of critical, you know, issue are, you know, what does Google do about core search? Like that's a super interesting question.
we ran these tests on Gemma, uh, from, uh, from two weeks ago and, um, the new open source model from Google and not to be confused with the severance character, Gemma. ... so we ran these tests and it actually performed only like a couple points worse than Gemini on, on our evals for, for accurate, accurate data extraction, uh, from, from enterprise documents and data.
the industry is moving so fast. How do I make decisions right now that I'm going to be stuck with in a fast changing space. So a lot of it is actually like, can you get your architecture set up for like optionality in the future?
you need to be able to swap out different parts. These are the kinds of conversations that we have.
the hurdles unfortunately are much more like practical considerations. Like literally like, I can't just, you know, turn on an AI thing that looks at all my data. And then an employee can ask the question because guess what? It's all of a sudden going to reveal, you know, secrets in the organization that they shouldn't have had access to, but there were over provision for access like five years ago.
there are a lot of customers where they're now ahead of the technology based on the set of use cases that they have.
I'm talking to the people that are talking to us, which means that by definition, they're leaning in, they're a little bit more forward thinking.
On our end, you know, we, we have a, we have, um, one of our first kind of agentic use cases in, in just the fact that it's not kind of a single, you know, one shot, uh, in the model, um, is just, we extract data from documents. So then you can, you know, say, Hey, here's a contract, here's an invoice. I want to, you know, read the document, put that into a database and then automate a workflow around it. That's, you know, clearly got, at least in our world product market fit, like, like, like m
um no but i'm not trying to ruin your questions only
what one scenario we gave it like our earning script from from one quarter and we said um uh you know if you were warren buffett um how would you improve this earning script and um it's like a random use case like nobody in the entire world would ever have you know asked that question of an earning script but all of a sudden it starts to amp up the cash flow message and the share repurchase message and the capital allocation message and so now you know when you're preparing to go in front of a w
most of the the work that went into to box ai was you know these are like 1am sessions um you know with the the the team or cto on like okay can we how do we solve this and and how do we figure this thing out we hired a we hired an intern at at midnight on a saturday um and and just you know some some kid at stanford that was just like online and ready to rock right away
we had we've been doing seven or eight years of work in ai um and uh that the challenge was every single use case a customer had you know i i want to understand my contracts i want to understand my film scripts i want to understand my you know blueprint files every conversation we had was a different ai model that you had to narrowly you know kind of train and implement for that one use case and so it never really scaled because it would be like you know be like if we were building on the web an
The trend that you just described is actually probably a net tailwind for us. So the more places, the more places that data is going and people are generating content and you have all these different places to store things, actually, the greater the challenge it is for an enterprise. So if you, if you think about you're a bank and, and there's, you know, files going into
And then we, you know, really just acknowledge that for our play, we had to be an enterprise software platform, and build up this idea of having a cloud content management platform end to end for the full lifecycle of your business.
we basically did this like over a three month period pivoted the company and said, we're going to go out to the enterprise market. And that was that was sort of that kind of no hedging decision. And then we basically became an enterprise software company. So that was back in early part of 2007, late 2006, pivoted the company.
we compared that path, which was like, oh God, like Google, Yahoo, Facebook, Apple. It's a race to the bottom... So we kind of saw that trend in 2006, 2007. We then looked at the enterprise market and we were like, oh my God, for some reason, we stumbled into this market that we never knew existed, which is enterprise spending millions of dollars just to manage their documents.
we were the first company of the new era, you know, sort of six years later, right around kind of the Facebook, YouTube sort of web 2.0 period. And we said, okay, let's let you store files in the cloud. And we're going to do a really big idea. We're actually going to give you a gigabyte of storage for free.
they're at least 100 times more dense than than the hard drives we bought when we started the company.
we've obviously been proven right on the cloud over peer to peer, specifically for our use case.
when we started box, we actually were also building a side product called Whirl, and Whirl was going to do peer to peer file sharing. So if you had a, if you had a corporate network, and everybody installed Whirl, you would basically be able to virtualize normally what would be in a server, because everybody would be just sharing files.
the third thing in particular in enterprise software, um, there's this one idiosyncrasy where your customers actually want to literally know like, how are your financials doing? Are you going to be able to manage my data for the long run? And so there's almost a kind of credibility brand transparency element to being public that ends up being uniquely helpful in enterprise software. That's not really the case in, in consumer like Airbnb or DoorDash doesn't really matter if these companies are pu
at a certain revenue scale, let's say a hundred million in recurring revenue, 200 million recurring revenue, you, you have enough predictability, uh, predictability in the business model where, um, you can, you know, operate at scale as a public company, I think with a high degree of forward looking, you know, kind of visibility and predictability and so that's good because that's sort of like job number one of going public is, is really make sure that you've got the business model locked in. Nu
Google which is going to more build purely horizontal consumer grade um in a good way and a and a bad way from an Enterprise standpoint technology and price
I think they're doing an amazing thing on the education front we see them a lot of small and medium businesses but they're not necessarily you know trying to go aggressively and and you know think about it as a core part of their business model
the scary thing about Google Google is probably that they're sort of you know nihilists around the Enterprise they don't actually care about the the business model or the revenue they just say hey here's free applications and you know we're going to go attack Microsoft Without Really you know ultimately caring a lot about the the sort of winning in that space
you'd eventually have Google Apple Microsoft um eventually giving infinite and sort of unlimited space
they're going to go attack Microsoft Without Really you know ultimately caring a lot about the the sort of winning in that space
we have around 900 people total
20 million total users right now yes and about 180,000 businesses uh actively using the service
we actually think it's growing too slowly but but you know we have uh uh we have a lot more to do
we're going after what we think is going to be a TENS of billions of dollar opportunity
as a startup just competing in the consumer space you would have no additional business model that could fund that so that's why we decided to move to the Enterprise and a lot of that is sort of proven out in the in the in the market
we store 15 times the amount of data in the same size hard drive that we than we did um uh you know when we started the company eight years ago so we used to buy 300 gab hard drives now we now we can get like 4 and a half terabyte hard drives or rather it was 200 gigabytes and now it's you know three terabytes or whatever so um so for the same dollars we can store 15 times more data and so we're just driving we're we're reflecting that in our product by by giving more space away for customers um
our business model is very different ... we can afford to give out more for the end User ... the economics of the storage space were going to be very untenable for a startup um to try and compete in the consumer side
we try and work in a compliment way with with Google so usually you know docs and drive are are compared against box on the low end of the market ... if you are a major you know financial services company ... the set of processes you need around your content is going to be very different and that's where we've invested our time and energy as opposed to Google which is going to more build purely horizontal consumer grade
we don't say you can go run box on premise inside your data center ... I don't think we'll be sort of you know trying to go deep in the on- premise World
box notes is probably a um is probably more of a one-off in terms of our investment into the end user side of the application we're most of our effort is is spent towards building the platform
we're not intending to go you know build a complete office suite or build a bunch of other productivity Solutions
we knocked off one horizontal category that we think can highlight um how lot maybe inspire a little bit exactly and and and really just continue this trend of we have an all new set of applications that we're going to use in the workplace
we think there's a huge opportunity for you know 100,000 applications like box notes and what are what's the architecture that they're going to need um those types of applications going to need for this mobile Cloud you know era
you have $280 billion $290 billion in Enterprise software spend when and about 95% of that is on the desktop in the Legacy model so you're going to have hundreds of billions of dollars of of sort of Market um you know and and budget be created for these new applications
we launched a product three weeks ago called box notes which is exactly like this
we would love for there to be you know three major platforms and the business like ours and I think most startups you you gain leverage by there being fragmentation in the marketplace because any one of your you know traditional incumbents can go support their platform very deeply but they can't support all of the the platforms
it's been an amazing kind of Boon for us
we have about uh 40 to 50% of all of our activity on mobile
mobile actually ended up being the real Catalyst for why we are even relevant in the Enterprise
it's basically the exact opposite of Microsoft SharePoint um so it's meant to be simple and easy to use and it's cost effective
we don't have a captive audience like Microsoft does
Microsoft owns all the distribution channels... they have this very large... the vars... the isvs... the SI... they own them... if there's an acronym Microsoft has Monopoly on it... and so a couple hundred thousand of these value added resellers... Microsoft had billions of dollars that they could fund to kill this category... from a marketing standpoint and distribution and sales...
we were not yet trying to compete with Microsoft SharePoint
Microsoft recently got in obviously with with officer 65 and I do think that that Google is much uh much better user experience today than than on the Microsoft side
Google Docs when you compare it to Microsoft's offering of office unbelievable it it solves 90% of the problem
I wouldn't necessarily write out the microsofts and oracles ... these guys they'll make moves ... the big difference is that it won't be as dominant
they just filler bustering until they absolutely have to switch over
they've lost the scale Advantage they've lost the scale Advantage they lost the channel Advantage because when the channel is open like the internet then then there's nothing advantages the channel is open so I can just come and serve myself as a customer right
what's really cool is when you look at the counter example of of how they've tried to do that with things like iPhone right where where you know the there's obviously the classic video Steve Balmer sort of laughing about that that the iPhone doesn't have a a keyboard and how businesses are never going to go for that um that was sort of like that was you know that was fud 101 um and but the the challenge is when you have when you have sort of democracy and openness in these in these channels and
fear uncertainty and doubt yes which is the the uh classic tactic of Microsoft and Oracle which is scare the hell out of the IT people
when you think about like how Oracle or Microsoft or IBM or sap goes to Market in the traditional Enterprise model they're basically building this technology for many many years right they're doing it kind of behind closed doors maybe they'll talk to some customers um maybe they'll kind of get what the needs are and then they'll finally package this
you can kind of think about it as Microsoft SharePoint if SharePoint worked right
it won't be as dominant um dominantly Microsoft Oracle IBM going into the future it will look a lot more like Like An Open Marketplace
I wouldn't necessarily write out the microsofts and oracles and and what I mean Oracle classically just bought right now um a leading provider of uh of you know customers you know supporting the cloud and so these guys they'll make moves
Oracle um if you roll back like 11 or 12 years and and Larry ellon in the Press would actually talk about software as a service and how it was going to be this disruptive new model because he thought that he would be at the center of that that change right what ended up happening is he invested in in netsuite and salesforce.com and they ended up kind of you know owning that and then he spent about five years to seven or eight years sort of filibustering and and you know you know kind of applying
when you think about like how Oracle or Microsoft or IBM or sap goes to Market in the traditional Enterprise model they're basically building this technology for many many years right they're doing it kind of behind closed doors maybe they'll talk to some customers um maybe they'll kind of get what the needs are and then they'll finally package this
we just did the math and then we said how are we going to get to the kind of scale that this category needs and the only answer the only mathematical answer was you got to give it away
that's a pretty bold call... the concept that you would give away a product for free to Enterprise it's fairly R
we think that that fremium in the Enterprise is actually even cooler than than absolutely than premium in the consumer St
Mark was right and wrong... he was right about one and wrong about the other... he was right on was selling to businesses... wrong was the fremium model
like what we're trying to do um like workday that's like the fusion where it's it's how do we take the ideas from the consumer internet and the consumerization of the Enterprise but apply those in a way that the CIO of of you know Proctor and Gamble can feel comfortable deploying
we started box and um as a really really simple way to to you know get TI your content from anywhere and the problem actually that we were solving was was slightly different than than Dropbox it was actually more around how do you make it really easy to share
we're actually launching some products that will um let you be more selective around who can see your content
if you can make your product intuitive enough that gets them to engage and understand
you have to have a a a security model that better understands how work is is is changing and how our information is changing
a lot of what we do goes into okay any device any software make sure the data is safe
the most important thing though for them is not the device it's not even the software it's the data back up that data versions protect that data protect it make sure it doesn't get leaked
we have million users that have done that and they they bring the product into work they solve their problem maybe maybe it doesn't bottle up to be a a big enough need where they need our Enterprise Edition so then they just stay on the free product or but maybe the Enterprise it buyer realizes that they need to move into this new world of of you know it infrastructure and then they want the Enterprise Edition
when you apply that to a business model that is sort of a Next Generation business model of freemium where people can bring their own technology into work it dramatically changes the entire kind of Enterprise selling and distribution and adoption process which is then Bottoms Up
over the past kind of three to five years I'd say has been just this massive transition where you know not only with the cloud but the number of devices that we can work from with the change in work and habits that we have where we want to share we have this new crop of technology companies that are emerging and we we're but one of them
we were specifically trying to solve a problem that we were running into as just individuals with our data and we wanted to access it from anywhere and so we built this product that we didn't think about Bottoms Up tops down we just thought of how do you build technology that an individual can love
you can kind of think about it as Microsoft SharePoint if SharePoint worked right