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Box IPO signals winds of change for ECM software

The Box IPO signals Wall Street's acceptance of cloud-based file-sharing applications and the subscription model. Will users embrace these apps too?

The much-anticipated Box IPO finally took place in January, with the stock price for the file-sharing application reaching more than $20 after opening at $14 a share. Box Inc., a cloud-based file-sharing application, competes with counterparts like Dropbox as well as traditional enterprise content management vendors like EMC's Documentum and HP's Autonomy and, to some extent, cloud storage vendors.

But Box CEO Aaron Levie has been steadfast in saying that the company squarely targets ECM software -- enabling users not just to store files in the cloud but also to edit, share and track files. It has also brought in more ECM-like features, such as metadata tagging to enable better file categorization and search, and new security and compliance features to ward off criticisms that it's not secure enough to handle sensitive data. Box's value proposition has been that it has made document sharing secure and ease to use, unlike traditional ECM software, which can be difficult to implement, costly and difficult to train users on -- let alone getting them to use it over the long term.

So, the question becomes whether Box is now a bellwether for cloud-based applications in general and for ECM software in particular. Ron Miller, a technology reporter and content management expert thinks so.

"It was a test of the subscription model and the cloud model" and Wall Street embraced both, Miller said.

According to John Mancini, President of AIIM, Box's open architecture and usability have also encouraged traditional ECM vendors to become more Boxlike. "Pure-play players that focus just on file-sync and share will get squeezed.," Mancini said. "The big content management players already now have their own play."

But Bill Priemer, CEO of Hyland Software, an ECM software provider in Cleveland, noted in an email response that while these apps like Box have upped the ante on usability for all providers, the jury is still out on whether file-sharing applications can satisfy users' features and security requirements.

"There's no doubt that ease of use is driving the adoption of file sync and share [FSS] tools," Priemer said. "Could ECM learn from FSS in terms of ease of use? Absolutely. Could FSS tools retain their ease of use if they offered the features and security required by enterprise customers for managing their business records? That remains to be seen."

For more on how the Box IPO could disrupt the ECM software market, check out our podcast.

Next Steps

ECM platforms offering a false tradeoff for users

This was last published in February 2015

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Will the Box IPO affect your content management strategy? How?
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When the Box IPO was finally launched, tension eased a bit but in the last few days we’ve been seeing share prices dwindle dangerously. A few papers and news sites have even predicted that the IPO could fail. To be honest, we are worried and have already started rethinking our storage strategy. We will be watching and if stability doesn’t return to the storage company, we may consider finding a new cloud provider.
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Mike,

Thanks for your comments. What other providers might you consider if you were to stop using Box?
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Our content management strategy is in the early stages of development, and it currently uses BOX as an alternative to the numerous “shadow IT” solutions that employees have already started adopting. At this time, since our strategy is still being developed and employees have yet to fully adopt Box, the Box IPO has no significant impact on that strategy, and we plan to move forward with Box. Although we will not begin rethinking our strategy at this time, like Mike28, we will be watching to see the outcome of the situation.
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If we do walk away from BOX (we hope we don't have to), we would most likely end up with either OneDrive or Google Drive. Google Drive has a 10GB file size restriction which is even higher than BOX’s 5GB and the $10/month for 1 TB represents great value for money.
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IPO's like BOX create a new frame of reference for CIOs. It moves the consideration from "we use it OR we don't use it" to:

- Do we have a migration strategy if it goes under?
- Should we now consider SaaS alternatives?
- How will the financial markets treat other pending IPOs?
- How do we backup BOX? Maybe something like Spanning (http://spanning.com/)
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One interesting point: the fact that this article's author sees HP's Autonomy as ECM indicates that there are still those around the industry who really don't know what ECM is. The fact that HP still markets Autonomy as an ECM solution proves that they still don't know that it's not. I just find it interesting.
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Thanks for your comment. HP Autonomy is commonly considered a content management system. While vendors are not always the place to verify, HP commonly refers to Autonomy as a content management platform: http://www.autonomy.com/offerings/enterprise-content-management/legal-content-management.
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