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Box IPO is a Lesson in Business Sustainability

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The Box IPO has been expected for months, and its announcement yesterday brought back memories from IPOs of the past. Business Insider said it best, with editor Jay Yarow highlighting that “we're getting an old-school IPO.”

What’s the reason behind this sentimentality? Box is not expected to make profits for the foreseeable future; unlike recent years when companies were expected to have a sustainable business model before entering the public arena. Even Facebook had a more sustainable revenue stream when it went public, despite the issues that arose on its first few days of trading.

Box has one expensive business model, losing $168 million in a 12-month span, far greater than the revenue it brought in over the same time period. Some reporters are speculating that it’s the cost of hosting web storage for their free users, and its race to the bottom for costs, against Google and Microsoft, that is dragging down their revenue stream.

At Accellion we believe the big opportunity is with on-premise private cloud file sharing - it makes economic sense, as well as providing customers greater control over private data. Accellion provides software that enables corporations and government agencies to run their own Box or Dropbox service for their organization. This increases the data security for these organizations, since they have not handed over control of their data to a third party vendor, and it also creates a very efficient business model for Accellion, which is sustainable in the long run.

From firsthand experience as CEO, taking a company public is hard work, and hundreds of variables are taken into consideration when a company and its investors decide when they’re ready. While I have a different perspective on what the most sustainable business model is, I do hope that Box’s public offering is successful, as this kind of business growth in our market is good for everyone involved.

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