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Box CEO Aaron Levie: Riding The Waves of Enterprise Disruption

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Aaron Levie, CEO and co-founder of Box, launched the company from his college dorm room in 2005 with the help of CFO Dylan Smith. What started as a college business project with the goal of helping people easily access their information from any location (better known today as the Cloud) has turned into a solution for the enterprise market that is focused on incorporating the best of traditional content management with the most effective elements of social business software.


In a recent interview, Levie, named one of the Top 30 Entrepreneurs Under 30 by Inc., tells us that the amazing thing about the technology industry is that our waves of innovation and disruption follow almost the exact same patterns each generation, they just involve more people and a much larger and more addressable market. After studying Oracle, Sun, and IBM, Levie says that you can start to build an understanding of the kinds of decisions technology companies made that led them down a certain path. "History repeats itself in the technology industry" says Levie. The devices tend to be more modular and smaller and get closer to the end user, but the disruption that occurs is similar and consistent over time.

Levie says that the wave we are in now began with the many companies that became very successful in the client/server era (which became the disruptors of the companies that became successful in the mainframe or mini-computer area) which today are being disrupted by the cloud and mobile computing companies (like and Workday) - the next-generation, best-of-breed software companies.

So, what does this "new wave" of disruption mean for IT?

Levie gives us these 8 tips for IT (and companies) to ride the waves of disruption and be relevant in the new enterprise:

1. Shift From Managing Systems To Services - With the way that people work changing and with more and more companies deferring to the cloud, the role of IT must change in order to be relevant. Levie tells us that instead of managing servers, systems and storage back ends, IT will become more about managing services, integrating services and adding value around services.

2. The Name of the Game is Integration - According to Levie, "If the last decade of the enterprise was defined by mass collaboration, then the next decade will be defined by mass integration". The previous era of enterprise technology and software was about how to put together and manage all these systems, something that is now being provided by cloud vendors. If the things that enterprise IT used to deliver are now being delivered by the vendors themselves, then enterprise software companies need to deliver a new layer of value which is about integrating services and getting the most out of their information in the enterprise. It's about taking these best-of-breed technologies and getting them orchestrated across the business in a way that was never possible in an on-premise client/server software type of world.

3. Make Your Technology (And Processes) Simpler - In a FastCompany post, Levie sums it up: If you want to spot the next great technology or business opportunity, just look for any market that lacks a minimally complex solution to a sufficiently large problem. Because you can now write software much more easily and distribute it on a mobile device and because of this new emphasis on end-user design in the enterprise, there is no way any complex software company is going to be able to survive. You have to make your technology simpler; it has to be able to compete on the merits of design and end user experience. Any company that is not competing in this way is going to be disrupted. Levie says, "If Jeff Bezos', CEO of Amazon, line is 'My competitor's margin is my opportunity', then in the enterprise software world it's 'Our competitors complexity is our opportunity.'"

"If you're not the simplest solution, you're the target of one." - Aaron Levie

4. Pay Attention To Where Customers Are Going - "Every software company and CEO has to pay attention to what they need to do to always remain as competitive as possible," advises Levie. For Box this means watching the disruption that they have caused onto other companies and seeing what happens or what could happen to their own business.

Companies need to think in terms of how to build the best value proposition for all parts of the market. CEOs need to spend time with industry partners and customers, and also with CIOs and IT buyers to determine what vendors they are finding to me more or less relevant. You have to pay attention to where the customers are going and what they are looking for and then fit that into a model of technology disruption and technology change, like Geoffrey Moore's Technology Adoption Lifecycle, and start to try to identify where you are as an ecosystem.

5. IT Must Take on the Role of Information Enabler - If you follow the pattern of what is happening in IT and technology, there are a couple of major changes that are causing disruptions to IT. The first is that the vast majority of the workforce is technology literate and are used to a world where you can consume technology on demand, over the internet. Secondly, there are longer any servers to manage or systems to back up and security should come with the network. Where does this leave IT? According to Levie, the first scenario is that IT gets disrupted and goes away - although this is not what he believes should happen. The second scenario is that IT becomes more important than ever, just different and more condensed with the value of IT being about being information enablers, not technology enablers.

What this means is the role of IT will be about having different business lines and different product organizations, and making sure that all individuals are able to get the most out of information and the most out of platforms. IT will need to orchestrate connections and seamlessness between these products, get the technologies to work together, ensure that all people in the business have access to information and enable the business to be as effective and productive as possible.

6. Respond at the Right Time - Levie says the biggest challenge in software and technology is that you often have to respond to a transition before all of the data would suggest that you have to do that. If you respond after all the data is revealed, it's too late, but at the same time, if you respond too early you won't be successful. You need to respond at the right time to be successful. For helping to determine what the right time in the market to do something disruptive is, he recommends reading the third book in Clayton Christensen's Innovator's Dilemma trilogy, Seeing What's Next. I would also add to that a recommendation for Christensen's latest book and a personal favorite, How Will You Measure Your Life?

7. Be More Open - In this new era, Levie often sees that the needs of IT and the end user are not 100% aligned on a regular basis when it comes to security, privacy and control. Often times the business wants to block certain kinds of collaboration that can occur within his product which creates a tension with the end user who wants to be able to share openly in a simple way. IT leaders must face the reality that you have to be willing to trade a little more openness for the benefit of users actually using the software more. As a result you are going to get more analytics and more visibility, and then a lot more control and security will follow.

"We used to have this myth in the old enterprise that if you locked down your information things would just naturally be more secure, but that opened up new potential security vulnerabilities as people went around the implemented system, bringing their own thumb drives, using ftp and putting things on their own cloud storage services," says Levie. "IT has a choice: Either be naturally more open and have sanctioned tools that make them more secure, or be closed up and have unsanctioned tools that they can't keep track of and that gets used around their purview."

8. Collaborate With the Business - Levie feels there needs to be a more bi-directional relationship between IT organizations and executive teams. In deciding what types of tools to adopt, IT should communicate with business executives or Line of Business (LOB) leaders to see what their problems are, what products in the market might solve them and then collaborate on what should be implemented in the business. I personally know Box's CIO Ben Haines - one of the most collaborative and social CIOs in the world - and he clearly exemplifies an IT collaborative leader.

After all this great advice, I felt I owed it to Levie to give him one piece of advice that in my opinion could make him a lot of money. Levie was all ears, but was quick to shoot me right down when I told him he should publish a book called "Levie's Tweets". In all seriousness, as a long-time follower of Levie, I can tell you that his tweets are extremely insightful. He may not have taken my advice, but hopefully you'll take my advice to follow Levie on Twitter - you won't be disappointed.

You can watch the full interview with Aaron Levie here. Please join me and Michael Krigsman of Asuret every Friday at 3PM EDT as we host CXOTalk - connecting with thought leaders and innovative executives who are pushing the boundaries within their companies and their fields.