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Microsoft & Box: Frenemies Look to Alter Cloud Storage

Microsoft and Box are both partners and rivals in cloud storage, and the relationship got more complicated when the companies signed a new deal Tuesday.

For Box, the deal allows the company to sell its cloud content management through Microsoft Azure, giving the company access to the second biggest public cloud in the market. Box will gain access to Redmond's artificial intelligence and machine-learning tools, and can then start incorporating those features into its own offerings.

Microsoft now gains deeper access to Box's enterprise customer list, which includes about 60% of the Fortune 500. Also, Microsoft is now part of Box Zones, an effort to bring cloud storage closer to the data.

The deal also means the companies will co-sell Box with Azure.

"From leveraging Azure's footprint of 40 data-centers world-wide to help customers keep their data stored in-region to taking advantage of Azure's AI technologies -- like video recognition -- we're also incredibly thrilled to be exploring other innovations for customers," Aaron Leview, the CEO of Box, wrote in a blog post on June 27.

Despite the agreement this week, Microsoft and Box are still competing for some of the same users, especially when it comes to document storage, since Office 365 now offers some of the same features, and Microsoft provides OneDrive as well.

Additionally, Box uses Amazon Web Services as a backup to its own servers and data center, and Amazon's recent purchase of Whole Foods means that Microsoft's biggest rival in the public cloud owns a significant Azure customer. (See Amazon Steals Big Microsoft Customer With Whole Foods Purchase.)


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Charles King, an analyst with Pund-IT Research, sees the deal as providing immediate benefits for the two companies. For Microsoft, it's a way of gaining access to customers already used to using cloud and convincing them to move more of their infrastructure over to Azure.

For Box, the access to Microsoft's AI and machine learning tools gives it a way to add a layer of intelligence to its offerings -- something the company previously lacked.

"It opens a path for Box to utilize Azure-based solutions, including machine learning and AI to enhance its offerings and develop new services," King wrote in an email to Enterprise Cloud News. "This isn't to suggest that Box will use Azure exclusively or not pursue its own AI and ML efforts. But having ready access to Microsoft's technologies should allow the company to hit the ground running and deliver related solutions more quickly than it could alone."

King also noted the Microsoft deal complicates Box's relationship with AWS and Google since it appears that Azure now gets some preferential treatment. In late 2016, reports indicated that that Google was eyeing an acquisition of Box but now "the new deal may also complicate any interest Google is rumored to have in acquiring Box," King added.

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— Scott Ferguson, Editor, Enterprise Cloud News. Follow him on Twitter @sferguson_LR.

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PaulChau 7/24/2018 | 12:44:10 AM
Useful changes Nobody would mind if the changes to be made are for the better of the cloud technology. If this is guaranteed, then we as users are bound to show our acceptance and move on. We would not want to hinder a good effort in making this particular technology even better for our daily usage for sure.
JohnMason 7/7/2017 | 3:22:49 AM
Re: AI I'm fairly confident that Google will only get better in that regard.
JohnMason 7/7/2017 | 3:20:34 AM
Re: AI I would have to at least partially disagree there. Google Voice has been doing acceptable transcriptions of my voice mail, no complaints.
kq4ym 7/6/2017 | 4:55:56 PM
Re: AI I've been using the Google products for years and that may explain why I would tend to use them over competitors and wonder if the companies are taking that psychology in consideration when they attempt to gain market share from others. Box may have been forced by the market to"gain access to Redmond's artificial intelligence and machine-learning tools," as one of the reasons for the link up.
Joe Stanganelli 7/2/2017 | 12:34:27 AM
Re: Getting into the shadows @daniel: But why Box specifically over, say, another competitor?

I mean, what you describe certainly sounds plausible. I'm just curious why Box gets the honor. Maybe because it offers the most value as a company for the valuation?
Joe Stanganelli 7/1/2017 | 1:44:54 PM
Re: AI @John: I will say this... Google Docs is exquisite for collaboration. It has its weaknesses, but hot damn what a nifty tool when you want to work on a document in real time with someone else.

It's especially great for creative collaboration. Here's a piece I wrote for a once-sister site of Light Reading, once upon a time, about an experience I had with Google Docs for this purpose: (link)
Joe Stanganelli 7/1/2017 | 1:08:05 PM
Re: AI @John: What hurts Google in this regard, IMHO, is its terrible transcription.

From what I have personally witnessed, the company just doesn't have its act together on interpreting the words people are saying -- particularly when compared against competitors.
Michelle 6/29/2017 | 7:33:30 PM
Re: Getting into the shadows There are so many intersections for modern tech companies, it's difficult to keep up. I think this is a very interesting agreement and I wonder if they made specific requests to keep from stepping on one another... 
JohnMason 6/29/2017 | 1:35:20 PM
Re: AI Also (I almost forgot) Google Drive has been at least as good as Box for my uses.
JohnMason 6/29/2017 | 1:34:16 PM
Re: AI My experience with the most customer-facing AI (the personal AI assistant) is that Google's is light-years ahead of MS's or Apple's, if that small exposure is indicative of the larger situation regarding sophistication of AI software.
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