While
reading online about cloud computing for these blogs, I came across an article
that described Cloud computing going public. This time I am not talking about
public as a type of cloud processing; rather I am talking about public stocks
and trade. Aaron Levie is the CEO of Box Inc., which is now a publicly traded
stock on Wall Street. The thing that stuck out to me was how successful his
company is, because they aren't. They are millions of dollars in debt and
they’ve got a cash wound that will not stop bleeding. The are also operating a
type of system that gives all Class B share holders 10 votes for each share of
stock but those who come in the IPO only get one vote per share. This helps the
company raise money without seceding any power of the company. The over lying
problem with this company isn't that they are messing up as an organization,
it's that the market is over populated and it hard to make profits. Levie was
bod enough to leave an interview saying that they have a history of cumulative
losses and they don't expect to be profitable in the foreseeable future.
Source:
http://tech.fortune.cnn.com/tag/aaron-levie/
Picture From: http://gigaom.com/2012/09/25/nasdaq-brings-wall-street-data-to-amazons-cloud-with-new-service/
The idea of a newer business not being profitable in its start is not too much of a problem. Most business are not profitable starting out because of their excessive borrowing and debt accumulated to help the company grow. The fact that they are selling equities in order to raise money just helps to increase the cash they have in order to grow and to hopefully raise more money to make more money. I do agree that the market for cloud services is over populated. Box is just one of the many cloud sources available and many people have a substantial amount of paid space elsewhere. Having an IPO may be just what is needed for them to distinguish themselves from other competitors.
ReplyDeleteMartin English
They are not a new company though and there struggles are real. I wrote about this topic because of them having an IPO. I think that is their only hope in ever becoming a profitable cloud computing company because of the market being over populated as you already stated.
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