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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.

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