Good morning, Data Sheet readers. The moment has arrived! The roadshow site for the highly anticipated Box IPO is live. Hat tip to my fellow newsletter editor, Dan Primack of the awesome Term Sheet, for alerting me before I even got to sip my first cup of coffee. I’m sharing some quick details below. Plus, it sounds like there’s a massive IBM restructuring under way meant to bring new urgency to its cloud computing strategy. Much to mull on a winter Friday.
If you find this newsletter useful, forward it to colleagues and business partners, and tell them to sign up! Did you miss one? Here’s an archive of past editions. Incidentally, if you don’t receive the aforementioned Term Sheet, sign up for Dan’s daily magnum opus PLUS Caroline Fairchild’s sibling newsletter about powerful women. Enjoy your weekend!
POLICY & STRATEGY
Box begins IPO roadshow. Looks like the time is right. Or at least more right than it has been. After months of delay, the enterprise collaboration and file-sharing startup is talking up details of its initial public offering between now and Jan. 22 (when it expects to more officially price the offer). According to its prospectus, Box will offer 12,500,000 shares of Class A common stock at an anticipated price of $11 to $13 per share. Translation: it hopes to raise at least $137.5 million. The lead underwriters are Morgan Stanley, Credit Suisse, and J.P. Morgan.
As a private entity, Box is valued around $2 billion. It delayed its first attempt to go public last June, when share prices for other cloud software companies trended south. At the time, Box’s 29-year-old co-founder and CEO Aaron Levie told Fortune: “We’re kind of waiting for complete stabilization now, and I think you’ll see us going public from there.”
In mid-December, Box finally refreshed its S-1 registration papers, so people were pretty much expecting this development. "We believe our platform can become the cloud-based content layer that spans organizations, applications and devices to enable users to get work done more efficiently—when, where and how they want," the company says in its mission statement.
As of Oct. 31, the company had more than 32 million registered users—including paying business customers with more than 48% of the Fortune 500. Its revenue for the nine-month preceding period were $153.8 million, up 80% from the previous year. The thing that people tend to zero in on, however, is its enormous sales and marketing budget. It was an eye-popping $152.3 million for the same period.
In his letter to potential investors, Levie notes:
We design our software with the passion and attention to detail that you’d expect from leading consumer companies like Apple. Similar to Facebook, we release updates to our product continuously, which allows us to act on user feedback to improve the Box experience and respond to opportunities with agility. We support our customers with the greatest care and attention, delivering Zappos-like support. And we’ve created an open ecosystem much like salesforce.com, leveraging the talents and skills of tens of thousands of developers outside of our corporation to build value on Box.
One thing that will be crucial, obviously, is where Box sets its price.
When data management innovator Hortonworks and analytics upstart New Relic picked the same Friday in mid-December to chance public market debuts, both greeted the weekend boasting billion-dollar capitalizations. That was on par with their pre-IPO private equity valuations, which normally isn't something to brag about. But on a day when the rest of the NASDAQ index gave up 1% of its value, both newcomers overshot their pricing targets by more than 40%. That's because they were smart enough to lowball their offer ranges in the first place.
Time will tell if Box likewise gets its timing and pricing right.
TRENDING
Huge IBM reorg in the works? Word is some of the historical walls between the company's hardware, software, services and research divisions are tumbling down—at least the stuff that pertains to cloud computing technology. No official details, but Bloomberg reports that senior vice president Robert LeBlanc will lead the new dedicated "IBM Cloud" group. The Register, Bloomberg
HP exec defects to Apple. Apple has confirmed its hire of John Solomon, who was senior president with Hewlett-Packard's printing and personal systems group. Word is the South African native will be in charge of boosting Apple's sales into corporate accounts. Re/code
Big fight brews over net neutrality. Telecommunications companies, federal lawmakers and high-tech equipment providers aren't so certain the FCC really has authority over regulating Internet traffic policies. Certain business elements have protested the idea for months because they believe it will stifle innovation. But FCC Chairman Tom Wheeler now looks ready to support it, and a vote is scheduled for the end of February. Just in case, several Congressional Democrats this week re-introduced legislation that would make paid traffic prioritization deals illegal. eWeek, IDG News Service
Did China just surpass the U.S. for quarterly iPhone sales? Investment analyst Steven Milunovich from UBS projects that Apple sold approximately 69.3 million smartphones during the fourth quarter. About 35% apparently went to the local Chinese market. And that means, there were more sold there than in the United States. ZDNet
Google, auto insurance broker. The Internet search giant apparently is building a comparison shopping site where U.S. drivers will be able to buy policies. Apparently, it's licensed to sell in 26 states. Wall Street Journal
RadiumOne founder isn't giving up. The digital marketing technology company's board rejected founder and former (fired) CEO Gurbaksh Chahal's buyout offer. So he just raised it 25%. Re/code
A special mark-your-calendar note. Hewlett-Packard just set March 18 as the date for its next annual meeting, probably the last one before its splits in two. You can be sure we'll be covering it closely.
STARTUPS & DISRUPTORS
Easier to train than humans? Rethink Robotics has raised another $26.6 million led by GE Ventures, along with the likes of Goldman Sachs, Bezos Expeditions, and a half-dozen other venture capital firms. The company makes an industrial robot called Baxter that sells for around $25,000. Its total funding is now around $100 million. Gigaom
MY FORTUNE.COM BOOKMARKS
Could these 2 women help solve Silicon Valley’s diversity problem By Shalene Gupta
Read Starboard’s full letter to Yahoo CEO Marissa Mayer By Fortune Editors
UCLA's business school embraces the tech boom By John A. Byrne
The $3 billion startup that wants to help you to make medicines in your own body By Dan Primack
Texting and driving? Your next car may come with a punishment device By Chris Morris
The shale oil revolution is in danger By Shawn Tully
FOR YOUR INNER TECHNOPHILE
7 consumer products that actually make sense for businesses. Lenovo's "stack" of speakers, hard drives and other gadgets complements its famous (formerly IBM-logoed) notebook computer portfolio. Intel's new voice and gesture control technology screams robotics applications. Plus some other cool stuff. ZDNet
ONE MORE THING
Why is Britain's 88-year-old queen suddenly so hip to technology? Queen Elizabeth II just sent her first tweet in October. Now, she's granted a "royal warrant" (basically her personal seal of approval) to British high-performance technology company Scan Computers. What does this mean? Who knows, but it should do wonders for the company's marketing messages. Fortune
MARK YOUR CALENDAR
National Retail Federation: Technology showcase. (Jan. 11 - 14; New York)
IBM ConnectED: Collaboration and digital experience. (Jan. 25 - 28; Orlando, Florida)
IBM Interconnect: Cloud and mobile strategy. (Feb. 22 – 26; Las Vegas)
Gartner CIO Leadership Forum: Digital business strategy. (March 1 – 3; Phoenix)
Microsoft Convergence: Dynamics solutions. (March 16 – 19; Atlanta)
IDC Directions 2015: Innovation in the 3rd Platform era. (March 18; Boston)
Cisco Leadership Council: CIO-CEO thought leadership. (March 18 - 20; Kiawah Island, South Carolina)
Gartner Business Intelligence & Analytics Summit: Crossing the divide. (March 30 – April 1; Las Vegas)
Knowledge15: Automate IT services. (April 19 – 24; Las Vegas)
RSA Conference: The world talks security. (April 20 – 24; San Francisco)
Forrester’s Forum for Technology Leaders: Win in the age of the customer. (April 27 - 28; Orlando, Fla.)
MicrosoftIgnite: Business tech extravaganza. (May 4 – 8; Chicago)
NetSuite SuiteWorld: Cloud ERP strategy. (May 4 – 7; San Jose, California)
EMC World: Data strategy. (May 4 - 7; Las Vegas)
SAPPHIRE NOW: The SAP universe. (May 5 – 7; Orlando, Florida)
Annual Global Technology, Media and Telecom Conference: JP Morgan’s 43rd invite-only event. (May 18 - 20; Boston)
HP Discover: Trends and technologies. (June 2 - 4; Las Vegas)
