Seeking what its CEO Aaron Levie describes as an “end to the storage wars” that have erupted recently between cloud storage and service providers, Box today announced that its business customers will now have unlimited storage.
The move comes amid recent price cuts on storage at Google and on Microsoft’s Windows Azure and Amazon Web Services. The cuts had spurred worries about risks to Box’s long-term business strategy. The company is aiming for an IPO in the fall.
Levie wrote in a company blog post that the cost to store a gigabyte of data has come down by a factor of 22,000 over the past two decades, to the point that it is more or less negligible. Generally speaking, the cost of storage infrastructure tends to drop by about 50 percent every one to two years.
The move applies to Box’s Business Plan customers, its mainstream offering for businesses with five users or more. Its Enterprise Plan, a customized service tier for larger companies, has had unlimited storage for some time.
“We’ve reached a point where customers aren’t going to be paying for storage, but instead for the value of services that come with that storage,” Levie said in an interview with Re/code.
Levie has previously outlined a long-term business plan that has Box building itself out as a platform upon which companies build their own customized cloud applications.
Levie said that when storage limitations were removed for companies in the Enterprise tier, they found it easier to offer Box company-wide. “We’re seeing more enterprises roll Box out across the entire organization because they have fewer complexities to worry about,” he said. Unlimited storage was a factor in landing customers like GE, Procter & Gamble and others.
As a practical matter, offering unlimited storage essentially does nothing to Box’s operational cost, mainly because customers don’t use up all the available space for storing data at once. “Our underlying cost for the storage is going down by a factor of two every one or two years,” Levie said. “Every time we have benefited from the decrease in our cost, we have added the difference back into the service.”
The move coincides with another move by Box to integrate its service with Microsoft’s Office 365, the cloud-friendly version of its office productivity suite. Box customers using Office 365 within the Office 2013 desktop application will be able to save and share documents from Word, Excel and PowerPoint directly into their Box accounts. Box also integrated with Outlook 2013 to convert emailed attachments into Box shared links.
Box last week updated its IPO filing with the U.S. Exchange Commission. The company is expected to price its shares sometime after Labor Day and will begin trading on the New York Stock Exchange. The move followed an injection of capital from the private equity firm TPG. It had previously filed for an IPO in March and was expected to price in April, but the offering was delayed.
Levie tweeted about the move with his usual flair for fun.