New Products to Help Drive Strong Second Half for Box, CFO Says
Box’s new products should help deliver a strong second half of the current fiscal year for the company, according to Dylan Smith, its CFO and co-founder.
Between the company’s recent release of a new version of the Box Relay workflow engine, Box Enterprise Suites overall and the general availability of Box Shield, its set of new security controls and intelligent threat detection capabilities, late in the current quarter, we can expect it to be a “backend-loaded year” for the company, he said Sept. 10 at the Deutsche Bank Technology Conference in Las Vegas.
“Obviously, it’s going to be an absolutely critical … back half to deliver on a lot of these opportunities and… the promise that we’ve been talking about” for so long, he told attendees.
After all, Box executives have been talking about its new products for quite a while. Shield has been in development for nearly two years and the company introduced that at its annual BoxWorks customer conference last year. Box, meanwhile, had released the original version of Relay with IBM in 2016, but Box has gone on its own with the new version of that workflow engine that automates critical business processes across an organization’s extended enterprise, it pointed out early this year.
In announcing Box Enterprise Suites in May, the company said the bundled offerings “bring together Box’s most valued products and services to enable organizations accelerate digital transformation.” The Suites include: Digital Business with Box Relay; Digital Workplace allowing users to “transform your workplace with seamless, secure collaboration, and lifecycle governance”; and Digital Workplace Global, offering “all the benefits of Digital Workplace plus the ability to address data residency concerns globally,” Box said at the time.
The company has been “very excited by the … initial reaction” to its latest products, “particularly to the impact that Suites is already starting to have in some of our customer conversations, and some of the early excitement around Box Shield, coming at the end of this quarter,” Smith said Sept. 10.
The company will discuss more about Box Relay, Suites and its overall “product roadmap broadly” at BoxWorks, Oct. 3-4 in San Francisco, he said.
Box, meanwhile, is “pretty pleased with the trajectory and where we’re at overall in terms of [the] percentage of our larger deals that have had at least one of our add-on products attached of late, so that’s up quite a bit” year-over-year, he said.
In discussing Box’s results for the second quarter (ended July 31) Aug. 28, company CEO Aaron Levie said that when customers use Box’s “full suite of cloud content management solutions, we see dramatically higher average contract value and better retention leading to greater lifetime value,” adding that a “key indicator of our success in driving this transition is both the repeatability of our $100,000 plus deals and the adoption of our add-on products.” During Q2, more than 80% of its $100,000-plus deals included at least one add-on product, up from only two-thirds a year ago, Levie said, noting the company was “seeing strong adoption of these products across sales segments as demonstrated by our add-on product revenue growing at roughly 50% year-over-year.”
What’s going to be another “big lever” for Box will also be its “ability to deliver more consistent execution in some of our underperforming regions,” Smith told the Deutsche Bank Technology Conference. While Japan has been a pocket of strength, Box has not been as consistent globally as it would like to be, he conceded. “So, that’s a big focus area of ours” now and Box is “laser-focused on driving much more consistency,” he told attendees.