Aaron Levie, CEO Of Box.net, On The Future Of The Cloud

For this installment of our forward-looking Crystal Ballin' series we speak with the man who founded his cloud-based file-sharing platform in college. Join us for a discussion of meatballs, sex, and enterprise software design.

Most Creative People in Business 2011

Aaron Levie is the young CEO of Box.net, a platform that shared files across the cloud. One of our Most Creative People in Business this year, Levie's company recently scored $48 million in funding; 73% of the Fortune 500 companies use his product. Though Levie's unusual work schedule often keeps him up till 2 AM, he kindly hopped on the phone yesterday at 8 in the morning for the latest session of Crystal Ballin', in which we rope CEOs to harness their area of expertise to peer into the future.

Fast Company: Thanks for doing an early interview.

Aaron Levie: I've never heard birds chirping outside this window before.

Are you ready to don your futurist's cap?

I've never had to be this futuristic this early in the morning.

Crystal Ballin’ is all about forecasting, which suits you, since you deal with "the cloud." So tell me, is the future cloudy? Partly cloudy? Is there a chance of meatballs?

I think it’s extremely cloudy. I'm trying to think of what the meteorological variant would be for that. We are moving to an extremely cloudy world that I think is gonna pose a very significant change to all of our IT systems, to all our business environments, to how we compute and work in general.

I notice you dodged the meatball question.

What was that, an animation movie?

I don’t really know. I think it's a children's book.

I think it’s from a different generation…

How old are you?

Twenty-six. Did I miss my childhood by not knowing what that is? I can relate this more to Arthur if you want.

Please relate this to Arthur.

Actually, I can’t do that.

Let's get back to the topic at hand. Some people think "the cloud" is an overused buzzword, a "phrase du jour." So the cloud's here to say, but will this phrase, "the cloud," necessarily be here to stay?

Once cloud-delivered applications massively outweigh on-premise applications, then you would no longer reference the distribution model as its distinguishing quality. We would almost just refer to it as any website or software we use. Right now term is helpful, since it helps distinguish from applications that are delivered on premise. So I’m pro-"cloud." I should fully disclose that my license plate says "GOClOUD" on it, so I’m biased.

That's one word, all caps?

Yeah. Some people might think it says "GocLoud" or something. That'll be the next word du jour.

One of the things that’s interesting about Box is the way it sort of straddles both the consumer and enterprise markets—even though its focus is on enterprise. What lessons has Box learned there, and do you think that tech companies of the future will need to focus on winning over both businesses and consumers?

Our business model is focused on selling to enterprise, but we go to individuals to help the adoption of our tools. That's the most disruptive change in our model. For the first time in enterprise software history, individuals at any level can adopt technology to help solve their problems. Contrast that with 5, 10, 15 years ago. You call your IT guy, he goes and does a software evaluation...that's a six-month process. Here today as an individual you can sign up for Box.net for free and begin using the service.

So someone in any department within an organization just decides they need help sharing files, they sign up on Box.net, then that spreads virally for the organization—and then once it gets big enough, you monetize that with premium features?

Exactly. Once there's a significant population of users in an organization, we'll usually get a call from the IT buyer. He’ll say: We have all these services. Now, I want a secure way the people can use these tools, I want oversight across the network, I want people to authenticate in ways consistent with other authentication processes we use.

[At this moment in the interview, Fast Company accidentally hung up the phone. A moment later, we sheepishly called back.]

Sorry. You don't have a solution for dropped calls?

I just said one of my best lines of all time...

What was it? Do you remember?

No. It was something about the cloud and enterprise.

So how do you win over individuals within an enterprise setting? I gather it has to do with product design and ease of use—so is there a sense in which enterprise and consumer technology is basically merging?

All enterprise software vendors should absolutely employ consumer design philosophy on all technology. There's so much horrible enterprise software. Enterprise software vendors never thought they were in the business of appeasing individuals At Box, we hire all our designers from consumer web companies.

Let’s talk about sex.

Okay.

In a thumbnail of a video of your site, there’s an image of one cloud that says "simple"—a reference to your product design philosophy—and then off in the corner, in the background, there's a kind of creepy stalker cloud that says "sexy" on it. That caught me off guard.

That's the creepy sexy cloud.

I was wondering about the sexy cloud. Is there anything less sexy than IT infrastructure and cloud computing?

Groupon is way less sexy than IT and cloud computing. So totally. I’m glad you noticed the delinquent sexy cloud off in the distance. He doesn’t get as much attention, so we don’t always put him up front. But we make sure he’s always part of the experience. He underlies everything that we do at Box, mostly in a less creepy way, but basically the thing that he represents that is so significant for us, is that people tend to think that enterprise software and IT and cloud computing is a dead, boring category. You sort of have to listen to long spiels about how your infrastructure can be improved or how you can save money on hard drives, very annoying stuff that really doesn’t make the technology sound fun and exciting. We're much more about the things happening around social and mobility and open tools that are unbelievable in terms of helping personalize the experience. We think all these things make this technology very sexy and important and defining for the next generation of tools in enterprise. We think that's synonymous with sex. The Silicon Valley definition of sex.

I'd like to hear your thoughts on the future of college dropouts, of which you are one. Is college optional? How does college need to change to hang on to young folk like you?

Peter Thiel's experiment, where he's paying people to drop out of college, is an interesting experiment, which he's in a good position to do as a billionaire. I think the future of college is not probably the experience I and my co-founder went through. We got extremely lucky to build an application at a time when the world was really ready for it. I don’t advocate anyone dropping out of college before they think they're really onto something that’s worth it. That said, there's a tremendous amount that needs to be changed about college and higher education. I don’t think that institutions take advantage of all the brain power and all the people and energy and all the things that students could be doing under their watch. Just at Box, when I was trying to recruit people to collaborate on the idea, I had to effectively sneak into the career advisor office of the engineering school and kind of trick them to send out an email to their group of students, just so I could get access to people who were interested in working with me. They made you feel you were breaking the law for wanting to work with another set of people in college, it was a crazy experience.

OK, it's time to really look into the future. What will the cloud look like in one year?

One year from now, I think we’re on the cusp of some pretty dramatic changes for larger businesses using the cloud. First of all there's a massive trend of iPad and Android devices. I think a lot more mobility will come along with cloud computing in the next year. I think a lot of applications delivered over the cloud will become much more social and much faster.

What will the cloud look like in 10 years?

Ten years is the game-changing horizon; that’s sort of the point where we have a Minority Report kind of feel. That's the world where, when I want to pull up my sales report from five years ago, I can do that in three clicks. When I want to see what a colleague is working on, that’s just in my business feed. When I want to know who my latest competitor is, my application tells me that. In 10 years, we see software that is way smarter, tools that begin to work on your behalf.

And how about in 25 years? What will the cloud look like then?

Oh my God, what are you doing. [Long silence.]

Look into the crystal ball, Aaron.

This is a hard crystal ball question because if you look back 25 years, there’s no way to have predicted what we're seeing with computing now. We have all sorts of discontinuous events that occured. The iPad was a discontinuous event. There was no way to draw a linear line to that event. If you think now about the web browser, the iPad, databases, these are things that are extremely hard to predict, and once they happen, they change the whole course of everything. I think we’ll have a number of those things, which I’m in no better position to predict than anyone. I'd be throwing darts at wall, and the wall is in a black hole. But in 25 years, there will be a continued vision of, I want all my data anywhere at any time. I want to securely call up any information. I want my technology to make me way more competitive. I want customizations on tools so they work exactly the way that I want them to work. It will make businesses way smarter, and people will make decisions in real time, much faster. You'll be able to communicate and collaborate across any kind of boundary, with any kind of person. It means rapid innovation for customers, with people bringing products to market much faster. It's just gonna change business as we know it. People will be much happier, and we'll get much better value out of technology.

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2 Comments

  • Geri Stengel

    It’s more and more important for nonprofits and small businesses to be up to speed on cloud computing and the benefits it can offer, especially with predictions, like this one, of approaching cloud ubiquity. It’s actually great for small enterprises, as well as the large ones like Box.net targets, because of cost and expansion advantages.

  • Brad Florin

    Aaron - congratulations on your success with Box.net and the recent round of funding. Your business model looks like a good one that will sustain substantial revenue growth and profits. My first company (Acartus) was similarly focused on software targeted to large enterprises and was acquired by EMC in 2005. Good to see from the interview with David that you know how to have fun too! Brad Florin, CEO of Bizmo