Can Box Survive A Microsoft Attack?

Cloud storage company Box Inc BOX had a spectacular IPO today. The company opened for trade above $20, significantly higher than its IPO price of $14 per share. Re/Code’s Kara Swisher was on CNBC to discuss Box’s valuation and the competition it faces from Microsoft Corporation MSFT.

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Did Box Price Itself Right?

“I think it’s a very tough market, because the enterprise market – the enterprise search market – all the big players are in it and Box had a lot of trouble going out,” Swisher said.

“So, I think initially they tried to go out several times and they had to pull back and be conservative in what the valuation was and it was smart for them to do that, because can [you] imagine if they had overestimated? [...] It would have been a death knell for this company. So, they had to do it just right in terms of going out in the market.”

Isn’t Microsoft Going To Crush Box?

“I think that you are thinking that a lot of these companies have other businesses and maybe they can’t focus as much as Dropbox can,” Swisher said.

“These companies have managed to build pretty significant businesses in the middle of other people’s businesses. What happens is big companies, they don’t have as much focus, they have lesser people [sic.]working on these things at the companies, they are not in their core areas.”

She continued, “Now, this happens to be a core area for Microsoft and also for Google and Amazon. There’s all kind of big players here and that’s the big danger of these companies. Many people thought Box will get bought by Microsoft, for example, or Dropbox or something like that. And it didn’t and these companies want to stay independent.”

“Now, the question is: Can they differentiate themselves and offer products that are better than what big companies do?”