Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Box Expands to Europe, Hires Infrastructure VP Away From LinkedIn

There’s always something interesting going on at Box. Last I looked in on it, the fast-growing enterprise cloud service start-up had just moved into new headquarters in Los Altos, Calif., though employees there were trying to coin the name “South Palo Alto.”

That issue remains tabled for now, for there are issues of a more global concern at hand. Box will today announce its first global expansion, with the opening of a new office in London and a plan to hire 100 employees across Europe by the end of next year. Greg Strickland, Box’s VP of business operations, was named to run the London office as VP of global operations.

It’s sort of a funny thing. While other companies complain and their executives buy antacids over their “European exposure” — stemming from the sovereign debt crisis, the troubles facing nations participating in the euro currency union and a regional recession that seemingly has much of the continent by the throat — Box CEO Aaron Levie says business for Box in Europe has been solid.

“We’re kind of an international company by accident,” he told me by phone last week. About 40 percent of Box’s user base comes from outside the US, and much that is in Europe. The continent accounts for a “double digit percentage” of its annual revenue, he says.

Box is proving the relatively new adage of the cloud, that IT executives find it easy to trim their budgets by moving some services and applications to pay-as-you-go-type services in the cloud that can replace things that used to run on-premise on dedicated, underutilized hardware. “Cloud services do well in down cycles,” he says. It was true in the U.S. during 2008-10, and it’s true of Europe in 2012.

And it’s more than Europe. While the company doesn’t break down its business by geography, about half of its traffic comes from outside the U.S. Box now boasts 11 million individual users and 120,000 businesses, among them global players with a strong European presence like Procter & Gamble and O2 Media.

Box also said it has expanded its strategic relationship with Palo Alto neighbor Hewlett-Packard, aimed at small and medium businesses. HP is only the biggest among Box’s several partners and investors. and SAP are both investors and partners, while NetSuite is a business partner.

Separately, Box announced that it has hired LinkedIn’s Stefan Apitz as its new VP of operations. Apitz was the one who oversaw LinkedIn’s infrastructure during a time when it was growing like crazy, which is exactly what Box is doing.

One early piece of business is already done for him: Box has just flipped the switch on a new data center capacity Las Vegas, adding to two facilities already operational in California. (Box also uses Amazon Web Services for things like fault tolerance.) They’re not Box-owned data centers — it’s not that big yet — but leased space in existing data centers. But Levie says a big part of Apitz’s job will be to oversee the growth in infrastructure internationally.

Then there’s also the murmuring in certain circles about the possibility that Box will go public in 2013. “There’s a certain amount of potential for that happening next year,” Levie told me. “But right now we’re getting as much done as we can as a private company.”

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik