At the beginning of this year, I wrote a short post outlining a few predictions I have about how enterprise software is going to evolve in 2015. We’re at the halfway point, so let’s evaluate a few of them.
- “Customer success” will become a C-level position in many companies.
- It will be harder to break into–and stay in–the “billion-dollar club.”
- Box will have a successful IPO and Wall Street will finally “get” its business model.
- Cyber-security takes center stage.
These last two are particularly relevant. Earlier in June, Box held its second quarterly earnings call and raised its revenue guidance for the year by $5 million. Since going public earlier this year, Box has consistently improved its key performance metrics, and I think its model is becoming better understood. This enterprise SaaS business model provides Box and other similar companies better visibility into future revenue and the impact of future cost-management activities.
This growing acceptance of the cloud model is driving the fourth prediction, as well. Content and data security has consistently dominated business and technology headlines since the Sony breach. We’ve seen major corporations like Woolworths, NYC Health, Eataly, and even the United States Office of Personnel Management (OPM) compromised, where the personal information of over 4 million government employees and contractors were lost.
Because we all work in an environment where data is in constant motion, it’s more important than ever that companies find solutions that can protect information the moment it’s created and shared. That’s why I’m excited to see Vera, one of our portfolio companies, debut its integration into Microsoft Office 365. O365 is a very fast-growing SaaS application, with 50 million paying business subscribers, and it’s adding millions more a quarter. While Microsoft doesn’t break out O365 revenue directly, we can estimate that these subscriptions are generating well over $1 billion in recurring revenue – a unicorn in its own right.
As more and more companies trust their confidential documents with cloud providers that make collaboration more seamless, there’s a massive opportunity to protect, track, and manage access to that information, even when it travels outside of the traditional enterprise. Aaron Levie, CEO of Box, once said: “If you want a job in 5 years, study computer science. If you want a job forever, study computer security.” Well said!