A variety of articles around the web (good listing of the different articles by John Mancini of AIIM) in regards to the June 12^th purchase of the EMC’s ECD division (that includes Documentum) by OpenText including our own Analysis and Predictions.  As different vendors position themselves to benefit by the disruption of the purchase, we thought the recent play by Box in Life Sciences was worth a deeper analysis.  This post will present our thoughts on Box for Life Sciences.

Box – Making the Play for Documentum’s in Life Sciences Space

Yesterday we noticed an ECM and Life Sciences article from Box:

Box Inc.: OpenText & Documentum Acquisition – The Impact on ECM in Life Sciences

Cutting through the marketing fluff, summary points from the article include:

• Box’s 650 Life Sciences organizations including GlaxoSmithKline, Boston Scientific, Allergan and AstraZeneca to name just a few.
• Several Life Sciences customers use Box for: sales enablement and the distribution of approved promotional materials in the field, conducting investigator site feasibility surveys, and to provide controlled access to SOPs for manufacturing operators.

Box would like to position themselves as a “modern content platform that helps retire and replace legacy ECM solutions, storage infrastructure, and file sharing tools as companies move to the cloud and go digital.”    For Life Sciences, Box would like to:

• Build out a Leading Life Sciences EcoSystem….by working with several ISVs and SIs…to securely create, collaborate, manage and distribute both regulated and non-regulated content in Box.
• Integrate Seamlessly with other Productivity Solutions: Box has invested heavily in integrations with Office 365, Google Docs, Slack, and Salesforce.com to help customers change the way they work.
• Addressing Data Residency Requirements – meeting stringent data residency requirements to operate in certain countries and regions. For now, Box operates in Germany, Ireland, Japan, Singapore and the United States with plans to add additional countries in the near future.

Box Play for Documentum’s Life Science – TSG’s Take

We do have some experience working with Box within one of our Life Science customers – Alfresco and Box – An Integrated Approach for Collaboration and Approval

A couple of relevant points for consideration:

• Box loves to tout the “huge numbers of clients” – in the past we have always heard 95% of the Fortune 500. We have no doubt that Box does indeed have accounts at 650 life science customers but, for life sciences, how many of those customers are using box for basic collaboration versus true, controlled/regulated content – an area that Documentum has dominated.  As a company that started in the “freemium” space, how many are actual paying customers?
• Most Life Science regulated clients aren’t asking for the seemless integration with Slack or other collaboration products. While they are nice to have’s, they are more relevant for Box’s existing collaboration users.  (marketing and sales)
• Box has a considerable way to go in regards to building out a Life Science and partner ecosystem. With Life Sciences, it isn’t just whether you have a solution, it is how many of the other Life Science customers are using it.  With all the integration required around managing regulated content (Publishing systems, Learning Management Systems, etc.), partners are key to providing the integration links and “feet on the ground”.
• Box, built in the freemium space to go after more of the collaborative SAAS model, was never focused on partners providing services for clients to do the tough integration work. See a Forbes article from 2011 where Box founder Arron Levie mocked Microsoft about services around SharePoint as “Good for Microsoft partners. Not so awesome for customers”.
• Box has considerable competition in regards to Veeva Vault for a cloud based compliant solution for Life Sciences. Veeva dominates the CRM with Salesforce space and, having grown up in Life Sciences, has a considerably more robust solution and client base.  Veeva has struggled replacing Documentum, for a variety of reasons including price, integration, partners and the cloud in general.  We see no reason that Box’s less mature solution wouldn’t experience those same issues.
• Of the different ECM solutions, Documentum’s Life Science solution is the most robust and something they have been investing in since 2013. See our thoughts from EMC World 2016.  Multiple vendors including CSC, as well as ours at TSG, have solutions that extend Documentum’s repository with alternative interfaces and approaches.  Box needs to add their solutions as well as partners with extensions to compete with Documentum.
• In 2015 Box had 303 Million in revenue in their 2016 fiscal year with a loss of 134 million. ECD as a division had 600 million in revenue in 2015 with a gain of roughly 200 million.  It is hard to see Box having the revenue/cash stream to really invest more than marketing in a Life Sciences vertical.

Summary

Overall, we would say Box’s push for Life Sciences is more of a marketing push then it is a serious threat to Documentum.  We have mentioned many times here before, success in collaboration (what Box has now) requires the ability to allow users unlimited flexibility and management.  That flexibility makes it difficult for the same infrastructure to be successful in a more controlled, compliant and validated environment when users can’t have unlimited flexibility.  SharePoint is the obvious example of a collaboration solution that was going to replace Documentum (see our thoughts from 2010) and never was successful.  We see no reason that Box would be more successful turning cloud-based collaboration into the type of true controlled ECM needed for Life Sciences.

Let us know your thoughts below: