Box’s ‘Significant Losses,’ Stiff Competition Make Future Uncertain Post IPO

Enterprise cloud storage and file sharing provider Box made its IPO filing public Monday, kicking off discussion over the significant losses the company has posted in the past few years.

“Listing Citrix, EMC, Microsoft and Google as its core cloud competitors in its S-1 registration statement is saying something both about Box’s ambitions and the state of the market as it emerges into its early adulthood as a company,” Yankee Group principal analyst Chris Marsh noted, commenting specifically on a ZDNet article. “However, having posted significant losses in the past few years and with little in its verticals-focused strategy pointing to how it can avoid such losses in the future, it’s difficult to see how it can compete in the longer term without either being acquired by one of its much bigger rivals or expanding into adjacent markets.”

Box reported losses of $168.8 million on revenue of $124.2 million for the fiscal year that ended Jan. 31. The year prior, it reported revenue of $58.8 million and losses of $112.6 million. Marsh said that while Box has the capabilities to challenge its competitors, but may not have the fortitude to do so as a standalone vendor.

The company hopes to land up to $250 million from its IPO and did recently receive a private funding round worth $2 billion. Box says 34,000 companies pay to use its platform and 25 million people have accessed their materials.

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