Is Box.net The Facebook Of Cloud computing?
A relatively new player in the cloud computing business, Box.net, is making big waves these days, with many drawing parallels between the company and Facebook. Like the most popular social networking site in the world, Box.net is the brainchild of a college dropout, 26-year old Aaron Levie, who was previously enrolled in the University of Southern California.
The company has recently been able to secure $48 million worth of funds from venture capitalists, such as Meritech Capital.
With a meagre capital of just $11,000 which the founder secured from his friend and partner Dylan Smith, Box.net went live in 2005. Since then, business has grown in leaps and bounds, and now the company boasts of more than 60,000 subscribers.
Box.net also claims that close to 73% of all Fortune 500 companies use their service. The success of Box.net has made industry leaders such as Mozy and Sharepoint jittery. On the other hand, capitalists are taking notice, with many happily writing large checks in the hope that their investment will soon turn in neat returns in the future.
With fresh funds, the company’s value is believed to have increased substantially from its $5 million valuation in 2010. The founder on the other hand, does not envisage Box.net going public until 2013 at the earliest. Box.net offers free online “storage lockers” to both individual and corporate users. Information is stored in the company’s servers, and allows users to use up to 5G of free storage space.
The company makes money from its corporate clients however, by charging them a fee of $15 per user for the privilege of having administrative control over their content.
It’s probably a bit of an exaggeration to say that Box.net is going to be the Facebook of cloud computing. First off, Box.net is not an original concept, unlike Facebook. They simply borrowed the idea from the social networking giant. Also, there are many cloud companies in the market whose business model mirrors that of Box.net.
It’s for this reason that I can’t see this company monopolizing the industry in the near future — if ever. Undoubtedly, they offer a great service, but it’s not much different to that offered by many other providers.
The other issue is that enterprise cloud computing is a different animal altogether, and is very complex compared to the social networking sphere. It takes a lot to get the interest of big businesses.
With Facebook, success came at a ridiculously fast pace. It became a sensation almost overnight, while Box.net on the other hand started in 2005 and have only reached a $5 million valuation by 2010. There’s clearly no comparison. If Levie wants to join the elite mega billion dollar IT league of which Mark Zuckerberg is a member, he is going to have to do a whole lot more.
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