Box Inc. (NYSE: BOX), driven by channel partner momentum, reported record revenue and expanded partnerships with companies such as Google and Microsoft in its fiscal second quarter earnings release.
Indeed, Box’s revenues were up 28 percent at $122.9 million on a year-over-year basis in its second quarter of fiscal 2018. Also, its deferred revenue rose 32 percent under the same analysis at $240.8 million.
During the company's earnings call, Box CEO Aaron Levie specifically pointed to the company's growing channel momentum. In Q2, channel partners such as IBM, AT&T and Itochu in Japan, influenced over 40 percent of large Box deals (valued at over $100,000) and contributed to lead generation awareness product and sales efforts around the world, Levie said.
Box-Microsoft Azure Partnership
The Box-Microsoft relationship also is thriving, he asserted. Under a growing partnership, Box will use Azure as a strategic public cloud platform and Microsoft sales reps globally will co-sell and be compensated for selling Box offerings that use Azure, he said.
"The partnership will also enable future integrations between Azure's artificial intelligence and machine learning capabilities, with Box's cloud content management platform, and will eventually expand Box Zones to additional countries, using Azures 40 data centers around the world," Levie added.
Box also is working more closely with Google Cloud Vision on new advanced image recognition capabilities. "Image recognition has major implications in a range of industries, from insurance companies, automatically tagging and classifying insurance claims, to retailers organizing their digital assets and catalogs," Levie said. "This is incredibly exciting, as it's our first of many used cases for artificial intelligence and machine learning, to help enterprise improve workflows and drive efficiency through discovery and deeper insights into content stored in Box."
During the investor call, Levie also highlighted Box’s new and expanded deployments with Amazon, Delta Global Services, a subsidiary of Delta Airlines, London’s Metropolitan Police, Freedom Financial Network and United Talent Agency.
Box's international sales also are in growth mode. More than one-third of the company's six-figure deals came from international segments, co-founder Dylan Smith.
By the end FY2018, Box projects revenue to exceed $500 million—one step closer to Box’s revenue target of $1 billion.
Still, Wall Street was initially disappointed with Box's revenue forecast -- though investor concerns apparently dissipated over the last few hours of trading on Friday, Sept. 1.
File Sync and Sharing Channel Partners
Clearly, Box is gaining momentum with big partners. But the popularity of file sync and sharing among smaller partners -- particularly MSPs -- remains a work in progress.
Box is quietly looking to work more closely with MSPs. Some partners are familiar with channel-centric alternatives like eFolder Anchor, but overall file sync and sharing hasn't set the SMB channel on fire. Autotask Workplace and Datto Drive also compete in the market, but Autotask appears to be focusing more heavily on endpoint backup while Datto isn't doing much with Drive at the present time.
Additional reporting and insights from Joe Panettieri.
