Welcome to Episode #278 of CxOTalk.
I am Michael Krigsman.
I'm an industry analyst and the host of CxOTalk.
I'm so excited because digital transformation
is one of those buzzword terms that we hear
a lot about.
But, today we're speaking with somebody who
is working with the senior execs from the
largest organizations in the world on these
business and digital transformation topics.
Before we begin, I want to say a heartfelt
thanks to Livestream because they provide
our video streaming infrastructure.
If you go to Livestream.com/CxOTalk, they'll
give you a discount.
One other heartfelt request: Please tell a
friend right now to watch and also like us
on YouTube and Facebook.
There's a tweet chat that's going to be taking
place right now using the hashtag #CxOTalk.
Join us there, and you can ask questions of
our guest, Aaron Levie.
He is the Chief Magician and the CEO of Box.
Aaron Levie, how are you?
This is your second time here.
Thanks for joining us.
Hey, thanks for letting me come back.
I'm glad to be lucky number 278, so this is
feeling good.
Hey, 278 is the magic number.
I've always felt that way.
[Laughter]
[Laughter] Aaron, tell us about Box.
Yeah, I guess just a little bit of brief background
and history of the company and then I'll take
you into today.
We started Box about 13 years ago.
The idea was really simple.
We wanted to make it very easy to store, share,
and collaborate on information from anywhere,
any device, any location, and be able to work
with anyone.
We first started focusing on really kind of
consumers and small businesses, professional
end users.
What happened was end users started bringing
the technology into the workplace, so bringing
it into enterprises.
Companies like Proctor & Gamble and others
were initial adopters.
We realized that our fate was much more aligned
to powering how companies worked and share
and manage information as opposed to solving
all of the consumer side.
Those problems, we decided to let Google,
Apple, Facebook, Microsoft, and Dropbox kind
of take on the consumer market.
About 11 years ago now, we pivoted to the
enterprise.
Our entire focus became, how do we build a
modern content management platform that could
replace and retire the legacy infrastructure,
the network file shares, the storage technology,
the document management systems, the DRM tools?
What if we could take all of that technology
that companies were spending millions or tens
of millions of dollars and, globally, tens
of billions of billions of dollars on?
How do we take all that technology, compress
it into one system, and then customers have
a single platform where they can store, manage,
share, and govern their information from?
That's the path that we've been on now for
a little over 11 years since we pivoted to
the enterprise.
We're now in about over 67% of the Fortune
500, so companies like General Electric, Proctor
& Gamble, or Eli Lilly use Box to be able
to do everything from, how do they share,
work, and collaborate within their organization
to how do they end up powering business processes
and deliver better experiences to their customers
when those business processes--
Right.
--deal with information, content, and documents?
That's what we've been up to.
Apparently, this has worked out pretty well.
[Laughter]
[Laughter] It probably always looks a little
bit easier from the outside, but I'd say once
you're inside, you get a sense that it's constant
chaos and we're always dealing with lots of
fun ups and downs.
It's been certainly a lot of fun.
We've been able to achieve more than our wildest
expectations in terms of the impact that we've
had.
What I think is most exciting and hopefully
we'll be able to talk about it is when we
look at what we've accomplished thus far.
We see ourselves as being very, very early
in the potential of what we can do with the
cloud, what we can do with how we power the
future of what work looks like.
We're certainly happy about what we've done,
but we know that, in many respects, we're
just getting started.
One of the things that I find most interesting
about Box is you essentially replaced established,
on-premise systems and processes with this
new type of software.
When you think about digital transformation,
you think about the future of work and, as
you said, where this is all going, how do
you place it in context?
What's the trajectory from your perspective?
Yeah.
I think the way that we think about, and every
couple of years we sort of step back and we
say, "Okay.
What is happening in the world, and how do
we make sure that we're aligning our strategy
and our technology to the broader landscape,
the broader set of changes?"
That was the very way that we started the
company in the first place.
When we started the company in 2005, we looked
at, okay, we want to work from multiple devices.
We want to be able to share with people all
around us.
Storage technology is getting cheaper and
browsers are getting way faster and better,
so we could actually use the Web as the conduit
by which people could access and share their
information.
Those were the big megatrends that we looked
at in 2005.
When we look at 2018, the megatrends have
multiplied pretty significantly in terms of
all of the things impacting businesses.
Companies want to be able to work in a much
more real-time way.
They want to be able to work with much flatter
hierarchies, so people can share up and down
the hierarchy of the organization much more
rapidly.
Organizations are working with a much larger
number of partners, globally, so they want
to be able to instantly collaborate no matter
where somebody is in the entire world that
they're working with.
We know that manual processes are going to
give way to more AI driven processes.
How do we use automation, whether that's machine
learning or artificial intelligence, to begin
to advance the business processes that we're
doing as opposed to a much more manual approach?
We know that product experiences are going
to become much more digitized and personalized
and much more automated for customers.
When you look at all those big megatrends
and then you add in cybersecurity threats,
you add in compliance issues, globally, we
see this as sort of shaping what the future
of work looks like.
We imagine a workplace and an organization
where people have access to all of the information
they need to do their job.
They're able to share and collaborate with
anyone they need to be able to connect to,
to be able to present their ideas, or to be
able to accomplish their tasks.
We believe that teams are going to be much
more agile so that you can make decisions
much more quickly.
We know that the sort of blurring of the inside
of an organization and the outside of an organization
is happening, so you can share just as easily
with an external partner as you can an internal
colleague.
We want to build a technology platform that
supports that future of work.
What we also are very cognizant of is that
it's not just going to be Box that is a part
of that future of work.
We know that companies are going to use Slack.
They're going to use Facebook Workplace.
They're going to use Okta.
They're going to use Office 365.
They're going to use Google Docs.
Our job is to find a way to be the place where
content can go when you want to be able to
govern it, secure it, manage it, and collaborate
around it.
But, we know that you're going use content
in lots of different places--
Right.
--where you're doing your work.
That's sort of what we see as the future of
work, and our job is to just go out there
and evangelize it and make sure that, unlike
the '90s or the 2000s, the world doesn't end
up with just one homogeneous technology stack
that largely is coming from maybe one or two
vendors and you're not getting the kind of
innovation that we know is possible when you
have a plethora of amazing solutions.
I want to remind everybody, you are watching
CxOTalk.
We are speaking with Aaron Levie, who is the
CEO of Box.
Use the hashtag on Twitter, #CxOTalk, and
you can ask questions right now.
Aaron, when you talk about the future of work,
it's very ecosystem driven.
Yeah.
Yep.
Maybe elaborate on that, please.
Yeah.
[Laughter] I think any CIO or IT leader watching
will certainly recognize this, but every time
you get a pitch from a technology company
that's a platform, in particular, you always
get that pitch where the company that's talking
to you is sort of at the center.
There are all these spokes of all the other
companies that sort of integrate with that
technology.
Yeah, I'm going to slit my wrists over that
kind of pitch.
[Laughter]
Yes, exactly.
Okay.
Got it.
[Laughter]
Yes.
That is what everybody has pitched all day
long is, "We are at the center of the universe
and all data flows into us."
I don't want to be too hypocritical because
we have that pitch too.
So, I'm making fun of us and everybody else
in the industry.
I think what's interesting is, and it's mostly
just because I don't think we've figured out
how to show this graphically.
What's interesting is I don't think anybody
is in the center of the future of the IT stack.
What's happening is we are all sort of nodes
that connect to one another, and so you have
to think about it more as a constellation
almost where we want Box to be the place where
content goes.
Slack is a logical place where channel-based
communication goes.
Facebook Workplace is a place where, if you
want more of a social stream or be able to
publish or broadcast information, that kind
of data would go.
Office 365 is obviously where a lot of office
productivity, email, et cetera would go.
We are all hubs and spokes to one another.
I think the reality of the future of the IT
stack is that it's not really a stack in the
traditional sort of layered sense.
It's much more of a Web or interactions interoperability.
Our job is to go and help customers and work
with partners to be able to deliver that as
a reality.
I think what's interesting is that the industry,
the cloud and SaaS industry has done a really
poor job of helping customers think through
this architecture.
There has not been the reference architecture
designed for, what does the best of breed
IT stack look like?
Where does Workday fit in?
Where does Service Now fit in?
Where does Salesforce fit in?
How do we make all these technologies work
together?
As you can tell, I'm a little bit too passionate,
probably, about IT stacks.
What we get really excited about is thinking
through, what does the modern IT environment
look like?
We have thousands and thousands of customers
that have that representative set of technologies.
We internally at Box use Workday, use Salesforce,
Office 365, Google Suite, [and] Okta, so believe
we are the best exemplar of what that modern
SaaS ecosystem can really deliver.
Our job is to hopefully kind of drive that
reference architecture and make sure that
our technology works with the rest of the
industry in the process.
What does this imply then for the CIO and
for the skills, the talents, and capabilities
that IT needs?
Yeah.
This has been a ten-year journey so, fortunately,
a lot of this has already been showing up.
We spend a lot of time.
I don't know if you've seen this.
I'd be curious.
We're seeing a new role emerge in a lot of
organizations.
It's titled differently depending on the company,
but largely the person who used to be the
head of end user computing or head of infrastructure,
we're starting to see evolve to sort of the
head of workplace technology, the head of
workforce technology, the head of employee
experience technology.
It's this role that's certainly responsible
for, but finally thinking through the deep
implications of, what does a much more collaborative
environment look like?
What does a much more end user productivity-oriented
environment look like?
In many cases, they have a counterpart in
HR that they're working with around employee
experience, and that's blowing our mind because
it's incredibly exciting.
Just as we saw that the CMO and the CIO were
pairing together three, five, or ten years
ago and that rise to the martech stack, we're
now seeing a very similar trend happening
within cultures where, if you have a CHRO,
head of HR, or head of people that is driving
cultural change that is, okay, we want to
be able to be more agile, we want smaller
teams, we want to be able to have up and down
communication and communicate that's very
flat fundamentally, that only works when you
have a technology stack that can deliver on
that.
The funniest thing that I tend to see is when
you have a CEO of a big corporation or a head
of HR of a big corporation and they're pontificating
about the new way that they're going to be
working, the new way they're going to be innovating,
the new agility initiative that they're going
to be driving.
But, then you go and ask them, what is actually
in your IT stack to deliver that?
It's the same technologies that they've been
using for 5, 10, or 20 years.
We just know, instantly, that there's going
to be a massive disconnect between the culture
change that they're trying to drive from the
technology that's going to enable that culture
change.
You fundamentally cannot have an open, transparent,
fastmoving, and agile culture if your technology
stack is in on-premises environments, doesn't
support real-time work, [and] doesn't let
you instantly collaborate with people around.
That's what we're seeing a lot of.
Back to your question.
I'm good at going on long tangents.
I apologize.
[Laughter]
But, I think what the CIO, what the IT leader
needs to be thinking about is, just as we
saw that movement in martech or sales technology,
which is all about business performance and
driving growth, I think there's going to be
this employee experience tech stack that is
this modern set of tools that drive the kinds
of cultures that I think most organizations
are trying to deliver, much more open, much
more transparent, much more fast-moving, much
more agile cultures.
Being able to deliver on that and knowing
that it's about creating a pairing between
how we're going to work, the technology we're
going to use to work, how those technologies
come together, and being able to deliver that
kind of end user experience that traditionally
has been an oversight in most IT organizations.
Right.
I think that there's nobody who would disagree
with this goal of creating a newer, open,
better user experience, better collaboration,
but I think inside large organizations, the
challenge they have.
You just put your finger on it.
There's a disconnect between the intention
and the reality.
Yup.
The question then becomes--you talk with all
these different customers--how can they bridge
that gap?
How can they move and march towards that goal
that you're describing?
Yeah, well, the way that we see the disconnect,
and again I'm one small data point relative
to the amount that you'd really want to do
to build up the full analysis on this.
What we tend to see is there will often be
a mismatch in the speed at which IT is coming
to this conclusion or the organization is
coming to this conclusion.
Sometimes you'll have the technology team.
You'll have an early adopter, innovator in
the IT team say, "Hey.
We're going to go to Slack, Box, Quip, these
modern technologies," but the CEO or the head
of HR hasn't come along for that journey.
And so, now this is a technology-driven initiative
as opposed to a business-driven initiative
or organizational driven initiative.
Conversely, I'll meet with plenty of CEOs
of very large companies that will say, "This
is our culture.
This is how we're going to be changing.
This is how we're going digital.
This is the future of our business."
But, unfortunately, I know very well the underlying
technology that their CIO is delivering, and
I know how much of a disconnect there's going
to be between the message that that CEO might
be saying and the underlying technology that
they're going to have to get there.
Unfortunately, it really just comes down to
people and process at some point.
If you don't have the CEO, HR, technology,
ideally the entire executive team in the room
saying, "What are we trying to drive culturally?
What do we think the business outcomes will
be when we drive that cultural change?
And, what is the technology that we need to
get there?" you don't have the level of alignment
or cohesion that you need to really deliver
on this.
Then it becomes a bunch of platitudes and
maybe the spirit is there, but you're not
going to actually get the change that's necessary.
Okay.
Then let's talk about this cultural dimension
because I think that is -- go ahead.
Go ahead.
The only thing I wanted to say, because I
may have presented it as too bleak, [is that]
we have seen, I would generally say more often
than not, there is a significant amount of
pent-up demand within the organization, though,
for this change.
We used to think it was demographically driven,
so, "Oh, the millennials want to work in this
new way."
But, I think it's in all of us that we want
to have more autonomy to make decisions.
We want to be able to share and collaborate
with people around us.
These are pretty innate ways of wanting to
work.
It's just that millennials are the first,
I think, maybe class of demographic that know
that this is actually how it should be done
and that it's possible to do it this way because
they grew up with technology that did not
hold them back from being able to share or
communicate.
I think, if you sort of went through work
not having instant, innate access to these
kinds of tools and technologies, then it's
a little bit of a leap to say, "Well, how
do we actually enable that way of working?"
Millennials, literally, when they went to
high school, when they went to college, this
is how they worked.
They enter the corporate world and it's like,
"Holy shit!
I can't share.
I can't communicate.
I can't work with the people around me.
I know this is wrong."
A lot of the pressure has felt like it's coming
from millennials, but this is true of every
demographic in the workforce.
To me, any time that I hear of an organization
that says, "Oh, we have these tenured employees.
They've been around here for 20, 30, 40 years,
and they just work differently."
They work differently because the technology
they've had to work has not allowed them to
work differently.
I think everybody innately wants to get there.
This is why we're fortunate.
We have a product that will tend to get adopted
pretty rapidly by all demographics within
the organization.
It's just because there's so much pent-up
demand to be able to work in brand new ways.
We have a question from Twitter, but I want
to jump in before I ask that.
Okay.
You said that the culture, in a sense, follows
the technology.
But, at the same time, the technology is an
outgrowth in many companies of the culture.
Yeah.
And so you end up, again, with this kind of
non-virtuous cycle.
How can organizations interrupt that?
Well, I guess maybe I'm taking it a little
bit differently, but I love your take.
I see it as actually virtuous.
I believe that they're inextricably linked
almost like swim lanes.
You can't have one without the other.
The more that you have the two working in
tandem, that's really where you start to see
the flow of the organization be able to be
really at its best.
It's when those two things are really humming.
I guess I see them as very complementary and
highly virtuous because, when you have a culture
that is ready for openness, ready for collaboration,
ready for agility, and then you have technology
that enables that, then the culture leans
in even more on that dimension.
Then there's new innovations and new technology
because you're bringing that feedback back
into the technology.
And so, we're improving the technology at
the same time.
I think these cycles are working really, really
well in tandem right now.
I guess I see them as highly complementary.
Okay.
Fair enough.
We have a couple of questions from Twitter--
Okay.
--on these points related to the culture.
Zachary Jeans asks -- and he's a regular listener,
so thank you, Zachary Jeans -- "You want to
make the change.
You have that intention.
Open data in organizational structures sound
great."
Yeah.
But, what about the politics, the internal
politics that interfere with these good intentions?
Yeah.
This is where it gets really fun is if you
have a culture that's built on isolating information,
being able to amass power in the organization
because of information and being able to keep
that to yourself where transparency might
reveal mismatches or disparities in either
execution, performance, or other issues, then
you will have cultural resistance to these
technologies.
I think, like anything, organizations will
change in very different ways.
It's important to get, fundamentally, leadership
onboard to be able to drive this.
You won't get there if you don't, again, have
the leadership team that has bought into these
ideals.
What I do know is that maybe it's 5 years
from now, maybe it's 10 years from now, maybe
it's 20 years from now.
What I know for a fact is that it will be
really hard to have a successful organization
or culture without these fundamental principles.
It's more of a matter of survival, to some
extent, and partly because the best people
will go to the organizations where these are
the cultures.
It will just be impossible to survive because
the people that are political, the people
that isolate information, the people that
can't handle transparency will just be the
less successful people and they won't be able
to attract the best talent, which will just
inevitably, eventually mean even if they're
riding on the coattails of their prior culture
and their prior era, they won't be able to
build successful companies.
I think the proof will be in just the numbers
of these, in the business results of these
companies.
Hopefully, you can get your organization there
by showing the evidence of how much better
performing these types of cultures are.
There's a great book, and I think the principles
in this book are awesome.
Obviously, companies will implement them in
different ways.
There's a great book called Powerful, by the
former head of HR from Netflix, Patty McCord.
What's really cool about this book, and I
highly recommend every single CIO and every
single IT leader reads this.
It's a book only about culture and HR, but
it reads as the other half to a technology
book.
It reads as the sort of adjacent set of information
to, what would your organization look like
if you ran a technology stack that was of
this sort of modern, open, transparent, and
fast-moving ilk of tools?
What kind of culture would that set of technologies
be able to result in?
It's faster decision making.
It's more autonomy.
It's information that should be available
to everybody.
She talks a lot about making sure that everybody
in the company has a high degree of business
acumen about the business model.
All of these kinds of things only come when
information is disseminated because, in organizations,
information is power, but it should not be
exclusive power.
It should be power for everybody to be able
to make better decisions, to be able to use
better judgment.
I think so many companies have grown up on
this idea that we are going to isolate and
silo data and silo people.
Partly it was just because we had no alternative.
You could not have had an open and transparent
company in the mainframe era, so it's no wonder
that that's how cultures eventually got built
out.
Today, that's not the case.
That's why I think we'll see this evolve a
bit.
Of course, Patty McCord also wrote the famous
Netflix Culture Deck--
Yep.
--that so many companies have copied and emulated.
Now, Aaron, what about innovation and the
relation of all this to innovation?
I'm also interested about your relationship
to the culture inside Box.
Yeah.
How you innovate and so forth.
Mm-hmm.
Yeah, I think the way that we think about
this is making sure that we are building up
a culture that is fast moving.
We have a few fundamental values that we live
by.
One is 10X-ing it.
We want to make sure that people are constantly
thinking about all new ways to deliver on
product experiences, on business processes,
[and] deep in the stack technology innovations.
The ways that you derive that and you are
able to deliver that is, a couple times of
year, for instance, we have hack-a-thons where
everybody stays up for 24 hours.
People will come up with ideas that wouldn't
have normally been on the product roadmap.
There are prizes and hundreds of people participate.
That's often, actually, what contributes to
our long-term product roadmap.
The ideas that people will come up with and
build prototypes for in 24 hours are the things
that then we make as production ready innovations
maybe a year later.
We had a technology that we announced last
year at Box Works called Box Skills.
This technology was basically taking machine
learning and AI technology from Google, Microsoft,
IBM, and others, and allowing that to be incorporated
into Box for our customers.
That came out of a hack that took 24 hours
to build maybe about a year and a half ago.
It became a one-year plus project with five
or ten people that is now one of the core
technologies of the future of our entire company.
What you want to be able to do is create environments
where people can come up with those ideas,
but it only works if you actually go and implement
them.
It only works if people see that there is
a payoff in the form of actual delivery of
what they innovated on.
That's one of the many mechanisms that we
have.
We try and have a culture, again, where people
are sharing ideas with one another and we're
communicating the best ideas possible.
We're always fighting, again, I think, the
traditions of companies, which is, you come
into the organization; you're 22 years old;
you're the most junior person in the entire
company.
But, that doesn't necessarily mean you don't
have the best idea that is going to give us
the next billion-dollar business model.
You're always fighting this tendency, which
is that new person coming in and saying, "Well,
how do I actually get my idea to a decision-maker?
How do I actually filter that up or feed it
to the right people?"
The best thing I can try and do is just make
sure to hammer that home at every turn that
if people act like an owner, if people really
are communicating with one another, were candid
with one another with our ideas, that's going
to be the best way that we can create a culture
where sustainably we're going to out-innovate
the competition.
Now, I'm just hitting you rapid fire with
questions without a break here.
Sure.
No problem.
[Laughter] Let's talk or go back to this IT
stack, and let's try to connect the dots now
between the new IT stack, this culture shift,
set of goals, cultural goals that you were
just describing, the role of the CIO, and
where CIOs fit into this world.
Okay.
Yeah.
Should I just talk based on that?
Yeah, yeah, yeah.
Whatever, however you want.
Okay.
Well, I think we need to think about how do
we take this set of technologies, again whether
it's Slack, Facebook Workplace, or Box, and
how do you marry that with the cultural change
that that organization is trying to drive?
Often it will come from a few discrete or
distinct business initiatives.
Sometimes that might be that a company is
trying.
Let's say it's a retail operation and that
company is trying to communicate with all
of their retail environments.
They want to be able to make sure everybody
is aligned with maybe its new promotions,
new policies, or new cultural efforts.
Something like Facebook Workplace then all
of a sudden becomes maybe the tool to go use
to make sure that that company can disseminate
that information.
We often get brought in a lot of times when
a company is facing the need to do much more
internal and external collaboration.
Maybe your partner ecosystem is changing.
Maybe you have new partner relationships that
you're trying to drive.
What you want to do is make sure that there
is way less latency between sharing internally
and externally.
Box will get brought in to be able to help
with that.
I think the CIO has to be highly tuned into,
how is the culture needing to change; what
are the business initiatives that relate to
that cultural change?
I think that often what gets missed when you
go and look at Silicon Valley, for instance,
and you say, "Oh, we want to be like Google,"
it's important to think about which parts
of Google are you trying to be like.
Well, it's not the Ping-Pong tables that make
Google Google.
It's not the volleyball.
It's not the high-end chefs that make Google
Google.
Those are amenities because they have this
amazing business model.
The things that at least once made Google
Google were:
• 20% time, letting people go out and spend
extra time building innovations that would
not have normally come from the standard product
roadmap.
• A high degree of autonomy where, if you
had a great idea, you could go and present
it to somebody.
• A massive degree of information sharing.
Google is notorious for being quite public
internally with how the business is doing,
how they can do better.
They have weekly Q&A sessions with the founders.
Those are the things that made Google Google.
The volleyball is sort of a superficial façade
on top of all that.
I think we sometimes miss that.
The only reason that you would want to wear
sneakers or jeans to work or have open environments
is merely because, when you create a more
casual environment, it lets people's guard
down, so they can be more creative, and they
can share ideas with one another better.
It's not that the jeans are the thing producing
the innovation.
We have to think about the system that all
of these components tie into.
You'll see the CEO who thinks that they're
getting really cool because they're now being
more informal, but it's not that interesting
because if the system itself is not using
that informality to drive more creativity,
then you didn't really accomplish anything
from learning that lesson.
I think what we have to do is really think
about, what is it about our business are we
trying to change?
Why are we trying to change it?
Then, look to what are the underlying root
sort of system-level things that drive that
change that we're trying to accomplish?
Maybe it's getting closer to our customer.
Maybe it's being able to hire a new type of
talent in the organization.
Maybe we think that we are getting really
slow at breakthrough innovation, so we want
people to be more creative.
Maybe some organizations don't have to change
at all in this dimension because that's just
not a challenge.
They just want to get better logistics.
I think it's really important to understand,
where is innovation, where does this culture
of innovation relate to your business model,
and how do you design a work environment?
How do you design a way of working that will
facilitate whatever that business outcome
is that you're trying to drive?
Interestingly enough, you just gave the most
succinct and clearest definition of exposition
of digital transformation that I've heard
in a long time.
Cool.
But, you never used the term "digital transformation."
Is there a reason for that?
No.
I felt like it was a long enough explanation
without that.
[Laughter]
[Laughter]
I didn't want to add more words.
You know it's funny.
Now you're going to create another tangent.
It's funny that you bring digital transformation
into this because I think everything that
I did just discuss is obviously what I think
people are trying to do when they talk about
digital transformation.
I think the challenge is digital transformation
often sort of leads people to going straight
to, "Okay, I need this modern mobile app.
I need Uber or Airbnb for my business."
That is often the necessary result of digital
transformation, but the way of getting there
is not that you just build an app, or you
create an Airbnb for your business.
It's actually thinking through, what is it
about digital companies that allow digital
innovation to occur so effectively?
It tends to be the case that a digital company
and, in this case, I'm just going to think
of the Airbnb of the world or the Spotify
of the world, a digital company is run, usually.
This is obviously stereotyping to some degree.
It's usually run in a more flat way with more
knowledge sharing, with faster moving, smaller
units that are able to work in their own specific
domain, and that is usually the thing that
enables a digital company to be successful
because oftentimes it comes from, in many
senses, the way that we build software, which
is small teams building projects.
That kind of ripples through the culture where
it's almost hard to separate the GitHub mentality
of software development, which is everything
is out there right there, I can see every
single change that ever happened, from the
kind of culture that a software organization
would expect, which is, I want to see everything.
I want to have access to all of the information,
so I can make the best decision, or I can
go look through the history of how we got
to that decision.
These cultures are kind of inseparable, the
software culture, the digital development
culture from how the rest of the company have
to operate, the speed at which we have to
operate.
That is, I think, why you can't accomplish
digital transformation without tying into,
how is the workplace going to function; how
is the business model going to change; how
are our underlying business processes going
to relate to that transformation?
That's we spend a lot of time thinking through
those components.
We only have about ten minutes left, and we
have about two hours' worth of conversation
that I'd like to have to continue.
We'll have to do another show just on digging
deeper into digital transformation.
We'll do 352, the show number.
I love it.
Okay.
[Laughter] But, we have to talk about AI.
Ah!
Of course.
Just as a transition point, how should CIOs
think about investment in new technology versus
existing technology?
As it relates to AI?
Well, in general, but specifically I'm thinking
about AI because it's so new.
Yeah.
Yeah, I mean I think it's really interesting
because I would say, three years ago, we didn't
really have to think through the data question
as much around your architecture.
I think that's what's sort of fundamental
to AI is now you really have to understand,
what data do you think is going to be really
important to driving your business in the
future, because that data will probably be
improved by machine learning or, depending
on the type of data, some form of artificial
intelligence.
If you have an architecture design that doesn't
let you apply machine learning to that data
or you're not using vendors that are very,
very focused on making sure that you can apply
machine learning or AI to that data, then
what you're doing is you're making decisions
today that will be severe technology debt
five years from now or ten years from now.
Really understanding the architecture of,
how can you work with that information, how
do you work with that underlying data, and
making sure it's set up in such a way that
eventually AI will be able to be applied to
it.
That'll be different for different companies.
If you're an industrial company, then you're
probably wanting to think about, how is IoT
data going to be able to be used against machine
learning, so I can improve my customers' maybe
health checking of their infrastructure?
That is going to have a particular set of
decisions that you're going to want to make
about your architecture.
If you're in the retail business, then you
want to be really thoughtful about, okay,
where is all this commerce data going?
Where is data about my customers going?
You might want to make sure that it's not
going into a place that is going to become
a black hole for you to be able to work against.
Being able to think through where, in my business,
machine learning or AI is going to have some
of the most impact, and make sure that you
have an IT architecture that doesn't preclude
you from being able to apply AI or machine
learning to whatever form of data or whatever
form of business process is going to be most
relevant to this kind of automation.
That's the first thing is making sure that
you're designing a future-proof architecture.
I don't hear this a lot, but maybe we'll kind
of put it into the design case more.
I don't hear the word "future-proof" enough.
I think that a lot of the ways that we design,
for instance, RFPs, the way that we do IT
decisions is very, very rearview mirror oriented.
It is, what has this technology delivered
thus far, and that is sort of what the RFP
usually delivers.
I think, instead, we need an RFP design and
a mindset that is much more about, what will
this technology deliver in the future and
not in the next 6 months or 12 months, not
the near-term roadmap that you can see?
Fundamentally, what will this technology be
able to do in five years or ten years?
For that, you're not looking at the code or
the features that have currently been developed.
You're looking for the principles of the company
that you're working with.
You're looking at where they sit in the value
chain of the ecosystem.
Are they going to be a vendor that is a neutral
platform, or are they going to build out all
of the technology themselves?
How do they value openness versus closed systems?
You want to understand the philosophy of the
organizations that you're working with just
as much as you want to understand the current
technology that they've written.
I don't hear this enough from IT organizations,
and I think it's a big miss because I see
a lot of IT organizations that will make short-term
decisions that almost immediately become debt
that they're now baking into their IT architecture
because they've gone with a vendor that maybe
today could meet today's RFP, but where the
trajectory of that innovation is going to
naturally asymptote because, fundamentally,
either the values of that organization or
the architecture of that technology is built
on has an obvious asymptote.
One example I'll just give you to kind of
make this as real as possible: we, four or
five years ago, would see a lot of customers
say, "You know I really want to be able to
share and collaborate on files, but I have
to leverage my existing storage technology
because I've already made an investment there.
And so, I'm only going to implement software
that works with my existing storage technology."
What we would tell customers is, "If you do
that, you have to recognize that, basically,
the software that you're implementing is frozen
at today's innovation."
This is a period of time right now in particular
where there's constant change in the cloud.
There's security change.
There's compliance change.
There's privacy change.
There's machine learning change.
You might be thinking you're getting a good
value because you're going to leverage your
existing storage technology but, in fact,
you're basically freezing the amount of innovation
you're going to get at the moment you make
this decision versus going with a platform
where, every week, there's new innovation.
Right.
Obviously, I'm referring to us, but this could
be true of any kind of category of technology.
Being able to really think through, where
are the curves actually going, and where do
we see the innovation actually heading?
I would say one final thing on this.
Unfortunately, my analyst relations person
is going to beat me up after this.
I think, unfortunately, analysts need to also
be thinking through how can we improve our
frameworks to think about forward trajectory
as much as being a snapshot?
I don't think that we see this enough in the
waves or the magic quadrants is helping customers
understand that technology is not static.
This idea of having a dot on a static sort
of thing is actually sometimes, in a fast-moving
environment, really, really unhelpful for
making technology decisions.
I would argue that we need something more
like either a quadrant for the principles,
the values, or philosophies of an organization
so you can see this organization is high on
the openness and fast change dimension.
This one is on the closed, static dimension.
I can understand, if I'm making a decision
based on some particular kind of architecture
design, what company is going to deliver against
those values more?
That's one thing.
Or, some kind of quadrant or wave where you
can actually see the trajectory of that vendor.
Their momentum is very obvious, so I can see
that this one company, actually, in the past
two years, has moved that far.
This other company has moved that far.
So, I should be making a momentum-based decision
as opposed to who has the most technology,
because the vendor that went that far, maybe
they have 100 times more features than the
vendor that went that far.
In our traditional way of thinking about it,
the vendor that has the 100 times more features
is the obvious winner, but I want to bet on
momentum.
I want to bet on the trajectory and an innovation
curve that a company is on because I have
to make future decisions right now.
That is something that's not exactly in the
mindset of a lot of IT organizations [and],
unfortunately, research firms as well, and
I'd like to change that if we can.
Yeah.
The other problem with analysts is they are
very siloed, and so you get a very narrow
kind of thinking that doesn't always or even
often consider the interplay across these
different dimensions you were just describing.
Yeah.
By the way, just to be fully clear, I'm very
sympathetic to the fact that making sense
of our complex vendor universe is not a trivial
task.
We don't make it easy on anybody.
I don't know that there's a better way other
than if we could try and incorporate a little
bit more sense of velocity.
Velocity in sort of future-proofness of IT
decisions, I think, would be really, really
helpful to incorporate into how we think about
technology.
But, I'm not suggesting that I've got the
magic bullet on this one.
I know we're pretty much out of time.
Oh, no!
Do you have a minute for one more question?
Yeah, sure.
Coming back to AI, let's try to link up now
AI and the future of work.
Yeah.
There are so many ethical questions.
Can you try to weave that story together as
you see it?
Yeah.
I'll at least share our premise first, and
then we can add the ethics in.
Our premise is that right now a tremendous
amount of time and work -- and I'm going to
just focus on knowledge work for now because,
otherwise, it's too amorphous and broad.
There's so much time that is spent in knowledge
work today that is really very rote tasks
that humans do very poorly.
By poorly, I mean inefficiently where there's
just a lot of stumbling of interactions, where
we're having to look at something and make
a very quick decision, but it's actually a
factual decision that we're making.
It really shouldn't require any sort of mental
bandwidth, but we're having to use it up.
I don't know the ratios.
Maybe it's one hour a day per person.
Maybe it's four hours a day per person.
This is calendaring.
This is aligning people with the right information.
This is searching for data.
This is finding facts about the business.
We spend a significant amount of time at work
on things where, if you didn't think about
how you would accomplish it for one second,
we know, for a fact, computers can do.
A computer could instantly get me and a colleague
into a room at the right time and the next
available time.
We know a computer can do that.
A computer could tell me, if I asked it, what
was our revenue in Q3 of last year.
A computer can do that.
We know that a computer can do that.
It can connect to Salesforce.
It could have voice recognition.
The question is, what if we got back all of
this time from scheduling, messaging, asking
for questions, and getting data?
What if we could put that time into being
able to do either more fulfilling work or
just the work that we are better and more
capable of doing than a computer?
That's going to be creative tasks.
That's going to be working with customers.
If I just look at one function in our business,
just a random function, our customer success
team as just one random team, the customer
success team, their only job in life is to
make the customer wildly successful with Box.
But, if you looked at how many hours a day
they are not in front of the customer, but
instead, they're in systems pulling data,
doing messaging, trying to run reports, all
of that time is time that they're not with
a customer.
If we could automate all of that, it's not
as if we've automated the customer success
function away.
We have automated the technology and data
parts of that job so we can actually go and
spend more time with customers.
I think, when you look at the vast majority
of, at a minimum, knowledge work, very few
jobs in a discrete job sense are going to
go away.
Many tasks will go away.
Many tasks will change or disappear.
But, the ultimate value of the job doesn't
change.
In fact, it will often, more often than not,
lead to that job being able to be performed
much better.
I think that we are nowhere close to the jobless
future that I think is sometimes pontificated
about, even when you come up with the glaring
examples like, okay, there's the executive
admin that now can be automated.
What will that mean?
Well, in fact, what it probably will mean
is that a large portion of people that previously
could never have had an executive admin now
can have some kind of AI and human sort of
facilitated assistant that will actually make
the market for admins much larger.
There are a lot of these things where I think
the size of the market for many job functions
will actually increase because they will now
be more efficient to be able to deliver to
a much larger portion of people.
I think we have to be very thoughtful about
ethics.
I am not a crazy libertarian around let's
just wait to see what happens; innovation
is king.
We need to be highly thoughtful about it.
But, let's not go super pessimistic to the
point that we actually don't use these technologies
to make all of our lives better, both on the
employee side, as well as the consumer side.
I think we are, in the largest sense, the
highest level, not getting into specifics,
in the largest sense, we are only at the beginning
of the benefits and the improvements of machine
learning or AI.
We're nowhere close to some of the consequences
of it.
That does not mean we don't need to be thoughtful,
but there's nobody in the world that could
argue that our customer success rep should
be spending more time in tools and data than
with the customer.
And so, let's go and automate the things that
are just the drudgery of our daily lives at
work and make it, so we can actually do better
work.
That's what we're really excited about.
Okay.
Very sage advice.
Well, this has been a very fast 45, 50 minutes.
I'd like to thank Aaron Levie, who is the
Chief Magician and CEO of Box.
[Laughter]
Aaron, thank you so much for taking time.
Thank you.
Thank you so much.
Take care.
Everybody, thank you for watching.
Don't forget to like us on Facebook and subscribe
on YouTube.
We will be back next week with the Chief Digital
Office of Uniqa Insurance.
He's also a board member of that company.
It's a huge insurance company in Europe.
Thanks so much, everybody.
Have a great day.
Bye-bye.
