Data Storage Player Prepares to Compete Overseas

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LONDON -- Box, an online business data storage and management company, plans to expand its sales force and team of developers by opening offices in Germany and France in coming months, building on its first overseas foray last summer in Britain.

Aaron W. Levie, 28, chief executive of the privately held company, said he planned to hire about 100 people in sales, marketing and product development in Paris and Munich by the end of the year, creating a base to capture other fast-growing markets for cloud-based data storage, including Japan, Singapore, Australia and Brazil.

In cloud computing, computer servers are linked to handle many tasks, like simplifying the filing and sharing of data online for companies and governments that rent them for far less than it would cost to build their own infrastructure. Box, on the smaller side of the industry, owns 10 data centers around the world and plans to add more.

Box, based in Los Altos, Calif., is in a crowded field: Amazon Web Services is the leader, while Microsoft, I.B.M., Hewlett-Packard and Google are major players.

The company raised $150 million from investors last year to finance efforts to expand internationally to compete with prominent rivals like DropBox, based in San Francisco, which opened its first overseas office last year in Dublin.

"Right now we're in aggressive expansion mode because international expansion is really key to our strategy," Mr. Levie said in an interview in London, where he announced the plans for Europe.

While he would not provide numbers, Mr. Levie said business was increasing significantly in "Europe and beyond."

The planned expansion to Paris and Munich, he said, was part of preparations for an anticipated initial public offering in 2014. Although the company does not disclose profit figures, Mr. Levie said that he valued the company at about $1 billion.

Box, which employs about 700 in its American offices, recruited 40 more people last June for its operation in London. In September, it hired David Quantrell, a former executive at McAfee and Hewlett-Packard, to lead its business in Europe, the Middle East and Africa.

Box says it has 150,000 business clients, and 10 million other users, charging them as little as $15 a month.

No more than 15 percent of Box's revenue comes from overseas, Mr. Levie said, a figure he hopes to double in the next couple of years.

Box said recently that it had signed its biggest contract yet, with the French engineering company Schneider Electric, which will use Box exclusively for its 50,000-member work force.

Other Box clients include EMI Music, Volkswagen, the digital music service Spotify and Heathrow Airport Holdings, which operates Heathrow Airport.

Box says its services allow business clients' employees to organize their work on multiple devices like tablets and cellphones while integrating other software like Google Docs or Salesforce.com, a Web application that helps handle large amounts of customer data.

Hervé Coureil, chief information officer at Schneider Electric, said that cloud-based storage could help companies that operate globally by cutting costs, and by providing a centralized way of tracking how they share files internally and externally.

American businesses have been faster to embrace the cloud, according to the market research company IDC, with Europe lagging because of worries about data security, regulations and legal jurisdictions.

IDC also said that the market for cloud-based services in the 27-member European Union was expected to grow to 10.9 billion euros, or about $14 billion, by 2014, from 4.6 billion euros in 2011.

While the size of the market is still small when measured by revenue and number of users, demand is "hot and growing," said Alys Woodward, an analyst at IDC who covers software and services in Europe.

"It's where an easy-to-use cloud service is going to cannibalize huge, more complex services like Microsoft's SharePoint," she added. SharePoint is a Web platform that helps people collaborate and share information over a corporate network.

About two-thirds of European companies use cloud-based computing for at least some of their needs, primarily to handle e-mail traffic, according to an IDC survey of 1,056 companies last year.

But Box sees an opportunity because those companies are not yet using the cloud to run the bulk of their businesses, including so-called content management services, the segment in which Box is aiming to grow.

While businesses are unlikely ever to switch completely to the cloud and are expected to retain data on proprietary hardware devices, "over time it will be a nice enhancement," said Alan Pelz-Sharpe, a research director at 451 Research.

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This article originally appeared in The New York Times.


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