What Box’s $250M IPO Means for Channel Partners

Box didn’t forget to mention its channel partners in its initial public offering (IPO) prospectus, a document made publicly available yesterday.

In its S-1 filing with the U.S. Securities and Exchange Commission (SEC), the cloud-based file sharing and sync service company first noted channel partners on page six, where it pledged to expand the company’s “sales reach through channel and strategic partners.”

The company acknowledged it participates in an “intensely competitive” market, summarizing the cloud-based enterprise collaboration services market as fragmented and rapidly evolving, “with relatively low barriers to entry for certain applications and services.”

According to Box, if the company is unable to compete with its competitors, its operating results could be harmed—possibly due to its competitors having “established marketing relationships and major distribution agreements with channel partners, consultants, system integrators and resellers.”

While the company views competitor channel partners as a potential risk factor, it also recognizes the need for its own channel partners to grow its business. So what’s Box’s plan?:

• Leverage existing relationships with channel partners to market, resell, integrate with or endorse its services.
• Identify partners and resellers, and negotiate and document relationships with them.
• Capitalize on the system integrator and developer ecosystem to create applications that will integrate with the Box platform.
• Avoid acquisitions of Box partners to prevent a decrease in the number of current and potential customers. 

In the SEC filing, Box broke down its partners down into three categories: channel partners, strategic partners and developers.

Box’s channel partners include value-added resellers, solution providers, direct market resellers, system integrators, distributors and service providers, among others. Some of its partners are Ingram Micro (IM), CDW (CDW), Insight Direct (NSIT), SoftChoice, AT&T (T) and SHI International Corp.

To accelerate the company’s sales reach globally, and generate long-term, profitable revenue streams, Box will leverage its “partners’ strong customer relationships.”

When asked to provide additional comment on how Box plans to work with its channel partners, the company declined to comment.

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