Box caters to nonprofit organizations

It's launching a new unit called Box.org and offering special pricing to qualifying customers in this sector

Bryan Breckenridge is executive director of Box.org, Box's charitable and philanthropic unit

Bryan Breckenridge is executive director of Box.org, Box's charitable and philanthropic unit

Box wants to deepen its presence among nonprofit organizations, so it's launching a new unit called Box.org focused on their particular IT needs and challenges, and is also introducing special pricing for qualified customers in the sector.

Box will offer the first 10 licenses to its cloud storage and file-sharing service free to nonprofit organizations, and any licenses above that initial amount at 50 percent off, said Karen Appleton, senior vice president of Global Alliances at Box and head of Box.org.

"This is a huge part of our vertical strategy and of our plans for expansion," she said.

Adding a unit for the nonprofit sector could be seen as another step in Box's corporate maturity process. The 9-year-old company is no longer a scrappy startup. It has about 1,000 employees, has raised hundreds of millions of dollars from private investors and is now poised to go public. Having a philanthropic arm seems an important step for the company to take as it enters a new phase.

Because nonprofit organizations tend to have fewer IT resources, know-how and personnel, they collectively lag in adoption of cloud computing, so Box sees a big opportunity for its product in an underserved market.

"The nonprofit sector has yet to embrace this [cloud computing] shift," she said.

Appleton and Box CEO and co-founder Aaron Levie have been talking about Box.org for years and decided that "now is the right time for us to resource and go after this in a meaningful way."

"It's a way for us to make a meaningful impact in the life of other people and on help non profits achieve their mission," Appleton said.

Box already has about 1,000 nonprofit organizations as customers, including the World Bank and the International Rescue Committee, so it is adjusting their prices accordingly. Box has three fee-based tiers for its service. The Starter tier is $5 per user, per month; the Business tier is $15 per user, per month; and the Enterprise tier is $35 per user, per month.

As the company's charitable and philanthropic arm, Box.org will also be involved in other initiatives beyond courting nonprofit organizations. For example, it will be in charge of coordinating employee charitable initiatives and corporate social responsibility projects.

Box.org's newly appointed executive director is Bryan Breckenridge, who has held similar positions at Salesforce.com and LinkedIn. The unit will be supported by an advisory board whose members include Dalila Wilson-Scott, president of the JP Morgan Foundation; Julian Jaeger, director of partnerships at the Clinton Global Initiative; and Stephanie von Friedeburg, CIO of the World Bank.

Box closed its fiscal year Jan. 31 with revenue of $124.2 million, up 111 percent year over year, and a net loss of $168.6 million, compared with a net loss of $112.6 million in the previous fiscal year. It has about 34,000 paying corporate customers, 40 percent of them Fortune 500 companies. However, only 7 percent of its 25 million end users pay for the service.

The company filed for an IPO in March, but earlier this month the Wall Street Journal and Bloomberg said Box had delayed going public due to the stormy climate on Wall Street for technology stocks. Both articles were based on comments from anonymous sources. In response, Box said it never had a set date for going public and that its plans all along have been to do so whenever it makes the most sense.

Juan Carlos Perez covers enterprise communication/collaboration suites, operating systems, browsers and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.

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