Box capital last week's S-1 prospectus says it hasn't made a profit, but it doesn't mean the internet is a bubble.

Although the S-1 Prospectus for box funding last week said it was not profitable, CEO Aaron Levie also stressed the fact, but that does not mean that the Internet is a bubble. On the contrary, not being profitable is not a bad thing.

Wind-house Mark Suster, in an article on the profitability of startups, said:

"Even the best journalists are sometimes unable to understand certain issues, and" profitability "is one of them. When commenting on a quality start-up, a lot of reporters always judge the company by the "pity they haven't made a profit". For journalists, and even many entrepreneurs, profitability is a direct determinant of good or bad. They ignore the simplest profit-making relationship with business growth. Businesses typically use the resources of the current fiscal cycle to support growth for the next 6 months to a year. ”

The simplest truth is that you want to invest in your income. It is possible to achieve long-term profitability by focusing on the potential of business growth before profitability.

Suster's article does not refer specifically to box. In Dave Kellogg's comments on Box S-1, he concludes that box gives a very reasonable number to see that box is operating normally:

"In many cases, the fate of the cloud storage company is usually only in two cases-either out of the way or die." By burning money to retain existing customers, attracting new customers, especially corporate customers, and then expanding the customer base on cross-selling and additional sales-the box's cash strategy looks reasonable in the battle against Dropbox. ”

I totally agree with Kellogg's analysis, and the only difference is that I think box is not just about storage and Dropbox competition. They are also competing for a new corporate platform, which means provoking a client battle with Microsoft.

Windows: Old Platform

Office software is clearly better used in Windows systems when all computers are pc,windows. And office are also used in Windows environments for businesses, and there are third-party software and business applications (LOB apps). Since most businesses use PCs, this means that Windows is absolutely dominant in the enterprise.

The appearance of the browser, gradually break this single big situation. Especially in the past few years, with the popularity of smartphones and tablets, only a small fraction of computing devices are using Windows:

The figure above shows Microsoft's share of the PC industry and directly reflects Microsoft's market share of equipment/software. Multiple devices and multiple operating systems are gaining popularity, but they get the same data.

Data: New Platform

Storage-only business models don't work. Even Aaron Levie said in his Twitter store that the final cloud storage would be free and unlimited.

Only data is priceless and cannot be replaced. It is the essence of a unique institution. This, combined with regulatory factors, is tightly controlled by the IT department for the use and acquisition of data. This is also the main aspect of Box's attempt to differentiate itself from Dropbox, which focuses more on consumer orientation.

Meanwhile, Box launches Android and iOS apps. Leading the industry in terms of capturing smartphones and Tablet PCs.

The picture explains why, for box, the most far-reaching news of the week was not the publication of S-1 documents, but the box's developer assembly. Just because this Windows is no longer the main platform does not mean that the market needs for the platform is diminishing. What the market needs is a platform that is able to link all computing devices and data together without limitation of time and space.

This demand undoubtedly increases the bargaining chip. This must be a large, faceted platform. box, for example, requires all of the data to support a variety of devices, as well as a large number of developers. The market scale and the ability of liquidity determine the development strategy directly. Because the target is the enterprise user, the market scale does not need to worry, then from the developer's point of view, constructs the bigger platform, is particularly important.
In this way, it is not so bad that the strategy of absorbing new clients is extravagantly.

Microsoft's killer

On the day of the box's developer conference, Microsoft unveiled the Office for ipad, an office software designed specifically for the ipad. Microsoft has not been a big part of the iphone, especially the ipad. Important corporate data from Microsoft Office can only be read through a third-party editor. Box values this, allowing the ipad version of box to read Microsoft Office files directly.

Office for IPad is designed specifically for Microsoft's cloud services. Today, the easiest way to get Microsoft Office data is to use Microsoft's data tier. You can open the stored file in box or read the data through other cloud services and office software Yes, but it's a one-way road. All your edits and changes are only available on the ipad, or in the Microsoft Cloud Account (OneDrive, OneDrive Pro, or SharePoint).

It is worth mentioning that the name of the difficult SharePoint, especially for the end user. Access SharePoint from the box side without full access to critical data. Microsoft's Office software can only bring a good user experience when it is used in conjunction with Microsoft's cloud/platform.

Is Office really important?

Steve Ballmer and his mania for Windows ignore the fact that the operating system itself is fading to doom. And Satya Nadella, the new CEO from Microsoft's cloud business, is still using Microsoft's original strategy. While he puts forward "mobile and cloud First", Microsoft is still trying to support other platforms with Office, except that the new platform for Windows is cloud and mobile could.

To be sure, Microsoft's office will gradually fade out of the public eye. Companies will transition from using stand-alone applications to products that can support instant collaboration. How the transition and the size of the collaboration requirements will be a key factor in determining whether Microsoft and box can succeed.