Hi, everybody. Welcome to Box's Financial Analyst Day. I wanted to thank you for spending time with us and learning about our business. Before we start, I wanted to go over some forward-looking factors. During the course of today's presentation, forward-looking statements regarding our expected products and services. These are based on our best judgment based on actual events. Please refer to the risk factors of documents we on Form 10-K. For information on actual results to differently those set forth in the forward-looking statements. These forward-looking statements are being made as of today, August 30, 2018. We disclaim any obligation to revise them. In addition, during today's group discuss non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from our GAAP results.
When we post today's presentation in the IR section of our website, it will include disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results. With that out of the way, I wanted to share with you a little bit about my time here at Box. I joined Box at the end of December 2014 to help build out the investor relations program. In my second week at Box, I jumped on a plane to spend two weeks with three executives to tell investors about our mission. At the time, we had only one main product, and we had a strong ecosystem of partner integrations, but no strategic. However, we had an ambitious vision, which was to enable enterprises to work more productively and securely in the cloud on any device. We wanted to build a platform designed to deliver enterprise content collaboration into any application.
Fast-forward a quick three and a half years later to today, that vision has not changed. However, our company has evolved into fulfilling that vision. Nearly doubled our number of customers to 87,000. We have seven products in our portfolio. We have strategic partnerships with IBM, Microsoft, Amazon, Google, Apple, and more, along with over 1,400 integrations. We are in 69% of the Fortune 500 with customers like Walmart, GE, The Coca-Cola Company, Ameriprise, SunTrust, Allstate, McDonald's, and the list goes on and on. We've just begun on the next chapter of our vision as we recently evolved from selling a product to selling a solution to some of the largest enterprises from the most regulated industries.
With that, we'll be spending the next couple of hours talking about the vision for the digital workplace with our CEO and Co-founder, Aaron Levie, which will be followed by a customer panel with our friends from Ameriprise, SunTrust, and Allstate, hosted by our Chief Product Officer, Jeetu Patel. Stephanie Carullo, COO, will discuss our go-to-market strategy for solution selling, and Dylan Smith, our CFO and Co-founder, will finish up with how we're driving growth and leverage in the enterprise. With that, I'd like to welcome our CEO and Co-founder, Aaron Levie, to the stage.
Thank you, Alice. I appreciate that. Is this mic going to work? Cool. It's all good. All right. Maybe just a quick survey just so I have a sense of how much depth to go through. If you don't mind making this slightly interactive, who was in the main keynote yesterday? Okay. I'll try and do a slightly abridged version, but certainly for the live cast, we want to make sure everybody gets a good sense of things. We made some significant announcements yesterday around our product strategy and where we're going as a platform. I want to kind of recap some of those key updates, why we made those decisions, how our product has been evolving, and how we are continuing to work and transform our customers. The good news is this will not be 4 and a half hours like it was yesterday morning.
This is truly the synthesized ideas of what we talked about. Box, as you know, our mission is to power how the world works together. We now have 87,000 customers, and 69% of the Fortune 500 is using the product. Especially, I think earlier today in Jeetu's keynote, we talked a lot with some of our leading customers around how they're transforming their businesses, both in their digital workplace and how they're working in a modern way, as well as their business processes, and that's incredibly exciting to see. We're seeing that organizations from Coca-Cola to the Met Police in London to Raymond James in financial services, Amgen, Eli Lilly, Pfizer, Johnson & Johnson, and so many more in life sciences are using Box to fundamentally both, again, change how they work as well as change their business processes.
What all of these companies have in common is they're beginning to retire legacy systems. They're beginning to shut down legacy infrastructure. They're beginning to modernize the end user experiences that they're delivering to employees. More and more, we're seeing them embed Box into their digital business processes. What we tend to see across all industries is that fundamentally, digital transformation is affecting every business. We know this. This is what every vendor obviously is discussing, but we see it in 3 distinct ways. The first is employees need a modern digital experience for how they get their work done. They have to have much more engaging experiences within their organization. They have to be able to more easily share and collaborate. We just had a conversation with Stewart Butterfield, the CEO of Slack, around what does agile look like at scale in a large organization?
We need modern tools. We have more and more CIOs coming to us saying, "We care way more about the end user experience of the software that we're delivering to our employees." In many cases, they're even partnering now with the people organization, with the HR organization around how do they deliver these modern ways of working. We're seeing a fundamental transformation in the digital employee experience, which is a space that we've obviously played in now for about 13 years since the founding of the company. More and more, we're being embedded into more of the modern digital business processes of our customers. This is where Box is being used as a back-end system for business process automation, where more customers are developing applications on top of our platform.
It's really about making sure that you can accelerate business processes that extend the front office and the back office. How do we connect the customer-facing experiences that an enterprise has with their back-end systems and employee-facing experiences? How do we begin to move customers off of legacy document management systems and storage infrastructure so they can modernize that approach to their architecture? Eventually, coming later this year, of course, the ability to pull in AI services and really extract insights and data from the information that they're working with. Finally, customers care about this and enterprises care about doing this in the context of all of the security, all the privacy, all the regulation challenges that they face.
Whether it's GDPR from a geographic specific requirement or industry specific regulation like GxP or HIPAA compliance or FedRAMP in the federal government, our job is to make sure that we can meet all of the compliance requirements of our customers because they're facing an unending attack of challenges from a privacy and security standpoint. When we think about digital transformation, we think about from these three perspectives. How do people work in the future in a modern way? How do we enable the business processes to be connected to how those employees work? How do we do so with a level of security, privacy, and compliance that is unmatched by any other company in this space?
We think that fundamentally, if we're going to transform our companies in the digital age, that the way that we manage, share, and work with our information. When we go into most organizations, and we have initial conversations with them about their digital transformation initiatives, the first starting point is: how are you managing? What tools are employees using today to get their jobs done? That will instantly tell us where that customer is on their journey and their ability to go and transform. What we see in a lot of organizations is this fragmented architecture of content management. It's really due to sort of four or five eras of technology emerging most enterprises are dealing with. You have legacy network file shares that emerged roughly in the early '90s.
You had document management systems that began to get used to do better document life cycle, better document workflows. Products like Documentum, SharePoint began to emerge. End users wanted to be able to share files and collaborate. Content management systems, end-user level consumer file-sharing tools like Drive, Dropbox, OneDrive kind of got pulled into organizations. Enterprises said, "We have to begin to interface directly with our customers" and a line of business applications and other modern applications started to get developed on infrastructure as a service. Finally, as we become more and more productive in the cloud, we're using products like Slack, Quip, Salesforce, Workplace, and we now have this modern cloud stack for productivity.
When we go into most organizations, we say, "How are you managing your unstructured content, financial records, media content, presentations, All of the intellectual property that goes into designing a new product. Where is all that data going?" They end up showing us an architecture that looks something like this, going into 10, 20, 30, 50 different systems. Most of those systems are running on premises, but more and more of the end user use cases are moving to the cloud. Obviously, this is an area where we got our initial start 13 years ago at Box. What we know is that this content fragmentation is fundamentally preventing our customers from being able to transform. It means that you can't secure your data easily. You can't govern your information across all of your systems.
The use cases that you have for each one of these products is completely different. We're hopping between systems as we're getting our daily work done. When you look at that from an end user level, we don't see a single business process that extends past just a couple of people that won't interact with multiple systems and silos where content is going. You have the creation process that has some set of data silos. You have internal collaboration that has another set of data silos. You external collaboration sharing with partners. You have data moving through email. You have data moving into consumer tools. Customers want to be able to publish that content. Maybe it's for internal purposes or external. You have another set of content management systems that are in the enterprise.
Finally, for regulatory purposes or compliance, you might archive that information. You have to make it discoverable in the future. As we think about most modern business processes, we can't imagine how you can do that with this architecture, where your content is stored in three or five different places, where employees are hopping between different systems to be able to get their work done. It just doesn't work. One question that we get a lot from customers, and obviously the market generally, is, "Well, what about Office 365? It must just solve this problem." In fact, actually, in some cases, Office 365 makes this problem worse. Fundamentally, OneDrive, which is their end user file sharing and synchronization tool, is really meant for the personal file management tasks of all the daily work that we do.
The moment that you want to be able to share externally, the moment you want to be able to do true document management, you begin to use SharePoint. Beyond that, of course, if you wanted to build a custom application, you would use Azure. Three reasonably fine products on their own. The challenge is most workflows span all three of those use cases within a business. As a user, I'm hopping between different systems. I don't know where the latest version of a file is. I can't add security, governance, and compliance in one source of truth across all of my data. If I'm a developer, I can't instantly write to one API to find where my data is and then embed it into an application. We think this is a major problem.
We think this creates massive inefficiencies in how work gets done and our business processes. We asked ourselves, and this goes back about 10 years when we pivoted in the enterprise. We asked ourselves, "What if enterprises have one platform for both their content management and their business process?" The business process piece has come in in a more significant way over the past few years. It really started out, what if we had one platform for our content, and what if we could eventually connect that into how the business workflow actually happens?
We said, "If we're going to deliver this single platform, it would have to do a set of things that no other platform can do in one place." We identified a series of capabilities or characteristics that we felt like Box would have to deliver on in a best-of-breed way if we were going to be able to build this singular platform. We asked ourselves, why was it that for so many years when Documentum tried this or SharePoint tried this or other platforms tried this, why were they not able to deliver on this idea and vision of a singular platform? It was because the data ended up being trapped inside of the organization. You couldn't do external collaboration. You couldn't have a single source of truth for content that integrated into best-of-breed applications.
Fundamental to our strategy and what you'll see at BoxWorks throughout yesterday as well as today is we have nearly every major technology company as a partner that shares the stage with us. Companies like Apple, Slack, ServiceNow, IBM, Microsoft earlier this morning, and the list will go on later today with Jeetu's next keynote later this afternoon. Fundamentally, we have to be able to integrate deeply into all of the applications our customers are using. You have to be able to integrate deeply with the best-of-breed ecosystem. You have to be able to automate the business processes and workflows that span the front office and the back office.
This one is really unique in the digital age because we have more and more customer-facing experiences, digital applications, whether on mobile or the web, that enterprises are building that have to tie into an internal system or internal workflow that an employee is going to engage with. My customer might be uploading documents in a claims process or in a wealth management process. An internal employee has to work with that content, be able to access it, mark it up, and share it back to that client. You don't want to have two different environments that people are working from or two different data silos that people are working from in that process. We have to automate and connect our front-office process with our back-office process, our customer-facing experience with the back-end processes that we have.
With the rise of ML and AI, we realized, well, we have this unbelievable weapon, which is the ability to take the power of computer intelligence and apply that to content and extract insights and data from our unstructured information. With Box, we store tens of billions of files, and every single one of those files is some critical insight that could be valuable, whether you want to search for it or if it gets prompted to you or you build a business process around it. We know that with the tens of billions of dollars being spent in R&D every year from all of the major technology vendors, we didn't want to be in a position where we had to compete with all the leading AI providers to be able to do this.
We wanted to instead flip the model and say, "If you like Azure Cognitive Services, you can pull that into Box. If you like IBM Watson, you can pull that into Box. If you like Google Cloud Platform, you can pull that capability into Box." That's really where Skills was announced last year, and this year we had some pretty significant updates on that. We want to be able to have a neutral, open platform that takes the best-of-breed AI services from the ecosystem and pull the power of that technology into the platform. Finally, we have to be able to do this with a level of security and compliance for every industry and geography without sacrificing simplicity.
Whenever we talk to any of our customers, still one of the singular biggest reasons why they decide to standardize on Box is that native security model, whether it's our encryption key management, our advanced permission architecture, all of the reporting that we do, all of the advanced security classification features that we have, and some of the announcements that we made yesterday. That ability to have one source of truth for content that you can secure centrally is a really powerful idea, and especially being able to deliver that in highly regulated industries where we're seeing a lot of growth, where there's really no alternative to being able to move to the cloud.
We said we have to do these five things in a best-in-class way, and that allows our customers to have a single source of truth for content that again works for a significant portion of their unstructured information and the business processes around that. That's the platform that we've delivered, and I think everybody has a good sense of that. This ability to have a layer of intelligent content services, a layer of advanced security and compliance offerings, and then we build our applications on this platform. Nearly every application, every feature that shows up in one of our apps is built on our set of APIs.
When you look at our mobile app or we have a Box Drive product that lets you do file access stream from the cloud, those are built on our public APIs, which means any other developer, any other customer could have built those. We integrate into 1,400 applications. Again, this is very core to our DNA. I think a lot of companies talk about interoperability and integrations. This is steeped in the culture of Box that we are a partner-centric, partner-first company when we think about innovation. Almost every product we build, we instantly think about the implications to the partner ecosystem as we create it.
In almost every product conversation, we're already calling partners and saying, "How can you embed yourselves into what we're doing from an innovation standpoint very early in the process?" That is what gives us the ability to go more deeply integrate into our partner applications than probably any other company in enterprise software, and especially within cloud content management. One of the kind of great examples of this is Google, where we had an update to the partnership that we announced yesterday that I'll be talking about in just a few seconds. More and more, our customers are building custom applications on top of this platform.
This is the big idea of if I store one file, whether that's from Box Drive on my desktop, whether that's uploading it from a mobile device, whether it's creating it from the web, I want to be able to have that file accessible not only in the third-party applications that I'm working in, but any custom application I'm building for my enterprise. Now I can have one source of truth, whether it's a custom app, I'm building maybe some HR application, where that content can then flow into the end-user experience of Box, where an employee can log in and get access to that file, mark it up, do a task, kick off a workflow. That ability to be looking at that singular object, that singular record, no matter what system you're working in, is what more and more of our customers are relying on.
This is certainly why Gartner named us the leader in content collaboration platforms, and we're the only company that shows up with a single product on both content services platforms, which is sort of the modern ECM Quadrant from Gartner, and content collaboration platforms, which is the sort of modern EFSS Gartner Quadrant. This ability to have in one product, not one vendor showing up in two Magic Quadrants, one product showing up in two Magic Quadrants, is something that we're really, really focused on. Forrester sees the same thing around what the future of work looks like with cloud content management.
The reason for this, when you look at it from a feature comparison standpoint, is there's not a single vendor that has the functionality you would need to be able to span the internal and external enterprise, mobile access, platform access, AI from different service providers, all in one product. When our customers are having to evaluate the market, what they're doing is they're saying OneDrive, it might be fine for end user file sharing. SharePoint might be fine for document management or collaboration, but the ability to have all of those capabilities in one source of truth for content is what fundamentally doesn't exist in the rest of the market. This is what gives us the ability to have the most comprehensive platform. As Alice mentioned, we're really just getting started with this vision.
I want to reinforce that everything we do is from the perspective of architecture. We want to architect a platform that offers a single source of truth of content, then deliver all of the services and advanced capabilities around that content that let our customers completely transform their businesses. Everything that we do from a functionality standpoint, from a partnership standpoint, from an innovation standpoint, is built on this premise of one source of truth for content. When we say we're just getting started, now we're at a point where we can build off that foundation that we've created. At BoxWorks, we've obviously taken this even further, the idea of what CCM can do. We are going after a $45 billion market.
We believe that that market is comprised of everything of on-premises storage infrastructure that we see as moving to the cloud, document management systems that we can replace, not all systems and not all use cases, but a healthy chunk of them. Security services that are wrappers around content management or storage infrastructure, governance modules and other extended functionality around workflow, around content. We're going after a pretty massive market that we think is fundamentally shifting from on-premises systems to the cloud, and we're trying to build out the leading platform. We built the leading platform. We're trying to continue to scale that as we go forward. At BoxWorks, we made 3 major announcements. The first was enhancements to how customers can deliver a digital workplace.
This is the idea of being able to work in real time with anyone from any application on the content that is pertinent to you. That's what we've been doing from a digital workplace innovation standpoint. Again, this is largely, if you're thinking about our history in the EFSS space, this is largely relative to the sort of modern forms of enterprise file sync and share. Then we said we want to be able to connect the work that's happening at the end user level to more of the business processes within the organization. How do we automate those processes? How do we embed Box more deeply into other systems of record? How do we be able to bring AI and other intelligence into Box, so that way you can structure unstructured information? This is really what we see as the future of digital business.
Finally, what has been always core to Box, but where we're going to be driving even more innovation from, is the ability to have advanced security and data protection in the cloud. As I mentioned, digital workplace is all about working in a fundamentally modern way. This is where most customers call us and start their engagement initially with us. They all of a sudden say, "We need to have better employee experiences. We need better modern end user tools that they can use. We want to be able to work in real time globally. We have way more partners than ever before, so we have to share externally in a very secure way. I don't want to have to train employees on how to use software.
I don't want to use tools that are too hard or too cumbersome to be able to leverage." This is where, again, we really got our start. When we think about the digital workplace, it's not just about content. It's about communication. It's about editing that content. It's about publishing content into different systems. Our partnership ecosystem is central to being able to drive a digital workplace. We've got a great partnership with Office 365 for real-time co-editing online. We mentioned yesterday and updated on our partnership with Apple, deep integration with iWork, and yesterday we highlighted where we're going to be going with our partnership with Google, which is an incredibly significant partnership for us to be able to offer choice in the enterprise around the productivity suites that customers have. We also integrate deeply into Workplace. We're advancing our partnership with Slack, Salesforce.
We integrate with ServiceNow that we announced, and so many more applications that we're integrating Box into to be able to have one source of truth for content. As we look at these partnerships, one big update that we did, as I mentioned, was with Google. We are seeing more and more large enterprises clearly move things like Exchange to the cloud with Office 365, but ultimately want choice when it comes to letting employees have the best tools to be able to do their work with.
We're having a surprising number of conversations, some in large banks, some in healthcare institutions, some in life sciences, that are saying, "Yes, we're going to be moving to Office 365," but there's some class of employees, maybe it's the millennials coming in, maybe it's a division that they just brought on board or a new acquisition, where they want to be able to offer some choice at the productivity suite level, where they want to be able to have employees use Google Docs or Google Sheets or Google Slides, where they want to be able to work in real time with those set of capabilities. We're the first platform that in one source of truth for enterprise content management, you can connect to Office Online, to iWork and Apple, and also to G Suite.
That ability to take a Google Doc stored in Box, open it up instantly, do real-time collaboration within Google, and have all of the data saved back to Box, which means I have one permissions architecture, I have one security model, I have one governance model. If I want to add classification to that, I can very easily. That is what we're delivering with Google. Google, in fact, had to re-architect many of the capabilities within Google Docs to be able to enable this for our joint customers. It was a pretty significant technical feat to be able to enable that. We're really excited about the Google partnership. We are rolling this out in beta today with our customers, and it will be generally available later this year, and we'll be talking more about that later this year.
We also introduced an all-new activity stream for all of the activity that's happening with your content, and deeper integrations for how you can get access to those applications directly in Box. When you're looking at a file in Box, we want to make it easy to do things like share in Slack, share in Salesforce, share in Facebook Workplace. Also as activity happens in those applications, publish back into Box the events that are going on. Now when you're looking at a piece of content, you can see the timeline of how that file traversed or traveled through different applications that the customer was using. Maybe it was shared in a Slack channel, maybe it was published to a Salesforce record.
You want to be able to look at that singular document and know exactly what's happened so you have an unbelievable amount of context in where that content has been going. When we've been showing this to customers, they've been blown away because previously they used to have to replicate files into all those different systems, and they don't end up with a source of truth that says, "This is the most recent version of a file. This is the regulated copy of the content." We can go to an auditor and say we know exactly where our information lives and how it's being accessed. That was a really big update and continues to advance our partner ecosystem. Across digital workplace, we announced an all-new activity stream and recommended apps that will be coming next year, early in the year.
We announced Box for G Suite and the update to that partnership. Beta is available now, general availability later this year. We're working on some more announcements on that front. We did an update on Box Feed, which is now in beta, that lets customers be able to have better discovery of content directly within Box. As we look to digital business, as I mentioned, this is all about how do we embed Box more into the business processes of an organization? How do we automate structured and collaborative work in one place? The ad hoc processes and the structured processes all can live in one system. How do we capture insights using AI? How can you build on top of Box to be able to create engaging digital experiences?
We believe that transformation requires that companies actually go and digitize their business processes. On one hand, you have to modernize the way you work, modernize your innovation, make sure you become much more nimble and agile. On the other hand, your processes internally also have to equally modernize. We have a lot of work in this space. We partner with IBM to co-develop Relay. We partner with Pega to integrate into Pega's BPM systems. We made a significant announcement last week with ServiceNow, and we had CJ Desai, the head of product from ServiceNow, on stage yesterday to talk about our partnership with ServiceNow. We want to make sure no matter what business process system our customers are using, what workflow platform they're using, we can take content from Box and embed it into that application.
We know that there's a huge opportunity to automate more of the end-user tasks and the collaborative work that's happening on a daily basis. When we look at a lot of the business processes in Box, it's things like weekly pipeline forecast, content submission, reviewing digital assets, being able to do sales training distribution, document redlining and contract management, the ability to have a release tracker for how our product's rolling out. All of these tasks that end users are doing millions and millions of times a day on Box, we said, "What if we could bring more automation capabilities to that?" Once you do a repetitive process multiple times, we can actually help you go and streamline that so it's a lot more efficient. What all of these processes have in common is they fundamentally combine collaborative work and structured work.
The idea of at this specific day, an event kicks off the need to redline or work on a piece of content, where a bunch of people have to go contribute, which is collaborative, then that document gets finalized, gets shipped to our general counsel, who has to approve it, and then ultimately that gets tagged with metadata and then gets distributed out to a number of people. This is the real work that's happening in every single enterprise every single day. It's just not automated. People are having to make up for lack of automation and use a bunch of social systems and other ways of communicating to be able to move the process along.
We said, "What if you could have the ability to move events through a pipeline, and as different tasks get accomplished, whether those are, again, collaborative tasks or structured tasks, you could have that all in one place?" Now, five or so years ago, we launched a feature called Automations in Box, and it did this in a very rudimentary way. Recently, about a year ago, we said we have to go and advance those capabilities because customers want way more from that technology. We took a hard look at the problem. We brought on a team recently, with a small tuck-in acquisition that we did with this company, Progressly. We fully staffed the effort. We said, "What if we could now automate basically any capability within the platform?" A sort of if this, then that framework for anything happening in Box.
If this file gets uploaded, move it to this person, add this task, apply this metadata. Once it gets approved, move it along on its journey. That's the all-new Box Automations and Tasks in our platform. That's going to be available early next year. We're going to be getting customers on the beta of the new version, hopefully sooner than that. It's really this idea of how do I automate the collaborative work that's happening? This is the 90% of enterprise work that we have not been able to bring automation to. We know that we're going to constantly be trying to improve and make more efficient our business processes and loan processing and claims management. We have a lot more innovation that companies can do there, especially when you pull in AI.
What about the 90% of unstructured work that has a certain degree of repetition to it? How do we begin to automate that work, make that more streamlined, make that much more efficient for every knowledge worker and every business process in our organization? That's what the new Automations and Tasks is going to be able to deliver. Finally, on the digital business side, we know that the winners in the digital age are going to be companies that extract the best insights, the most knowledge from their data. This is really what we're seeing in the AI space. The ability to take insurance images and pull out the appropriate information, healthcare data and be able to see signal from noise, retail and be able to see trends in a market or capture intelligence from content that we're working on.
We know that most of our information today is unstructured. Most of our data is unstructured, and this is the hundreds of billions and trillions of files that are being created that are images, videos, documents that we don't know much about. We know the only way to do this at scale is with AI and machine learning. Last year, we announced a new technology called Box Skills, and the whole premise of Box Skills is: what if we could have a framework that would make it incredibly easy for anyone in an organization, that is technical at least, to be able to pull in the power of AI from any major cloud AI provider, IBM Watson, Microsoft Azure Cognitive Services, Google Cloud, AWS, and with a few lines of code, be able to actually go and bring intelligence to their content.
Box Skills effectively enables that. We abstracted away a lot of the system capabilities and actions you would have to take as a developer to be able to move content securely from the Box Cloud to a public cloud AI provider and be able to extract the appropriate metadata, apply it back into the Box user interface, and be able to work on it in a really simple way. That's what the Box Skills framework is all about. What we announced is Box Skills Kit, which is the developer kit that lets developers go and actually build these skills.
This is a really powerful way that any developer is going to be able to take any of the innovation happening in the AI space, the tens of billions of dollars in R&D, and be able to bring in the power of that technology into content in Box that leverages the privacy, security, and compliance of Box, but pulls in the AI from any major vendor. That's Box Skills Kit. We are also working on efficient ways that we can lower the friction and even reduce the time it takes to get going with Box Skills Kit. How do we make it, within a few clicks, easy to be able to deploy AI directly within Box using these partners as well?
That's something that we're working on, but Skills Kit has been what customers have been asking us for the ability to actually take AI services and customize it and tune it directly for their business, which is ultimately how they're going to be able to get the most out of these technologies. That is generally available in December, and we're really excited about that one. Automations in Box early next year, Box Skills Kit GA in December, and then ultimately custom-trained AI models with Skills Kit with custom skills is going to be coming next year as well. The ability to pull in auto-training services into your content, that's also going to be coming in the next year.
Finally, we haven't talked about a lot of this recently because we've been working in the background on a bunch of this technology, but we wanted to do a pretty significant update on the future of data protection and security within Box. We know that implementing security and data protection today calls for a completely different approach. If you think about the enormous amount of data that we have, the ways that we're working with that data, all of the new challenges that we're facing, we know that perimeter-based security doesn't work. Even rigid non-perimeter cloud security doesn't really work in the digital age. The boundaries of our organization are blurring, so we're sharing with an enormous amount of external partners and colleagues, vendors, clients, contractors. We know that attacks are gaining in sophistication as represented by this image of an attacker.
I saw that for the first time yesterday. I was like, "That's a little awkward." Okay. It's just the classic like hackers don't wear masks. They're just on their computer. They don't need a mask. They usually tape their camera if necessary. We know that attacks are gaining in sophistication. This is pretty important, and there's more access points than ever before. People are working on more mobile devices. They're working in more applications. We know that there's so many different ways that information is being worked on. We know that you can't use rigid, typical policy-based security to be able to secure this enterprise. If we go to some of our organizations, maybe Jeetu will talk about it in a few minutes. We have some customers that work with thousands of external constituents, firms, not just individuals, different organizations.
Yesterday, we introduced Box Shield to our customers. We wanted to give a little bit of a heads-up and a preview of where Box Shield is going and what it is because we have a lot of customers that have been asking to jointly innovate with us in very regulated industries, highly security-conscious organizations that wanted to be early in this process. We wanted to give a preview of where we're going with this technology, which is the idea of bringing intelligence to security within Box.
The way that we're solving it, and last year we introduced Box Graph, is taking the map of activity that's happening in Box, all of the users and who they're connected with and the uploads that they're doing and the devices that they're accessing from, and the applications that they're working in. That has built a model for each enterprise that we work with that lets us effectively see the patterns of how work is happening. Which means by extension, we know when anomalies begin to occur. By looking at the patterns, we can then say, "Okay, this is actually an aberration from typical behavior." A user is accessing a type of content that typically that user or users like that user have accessed before.
When somebody logs in from one device and very recently they logged in in a location that would've been impossible to be in both of those places within those timestamps, we can then detect that very easily. If I'm externally collaborating with a firm, that is the first time that we've introduced that external collaborator into our network, that has a higher sensitivity associated with that type of work.
We said, what if we could actually begin to provide more signal from the noise that event logs and traditional logging systems are providing, more signal to the security professionals that are using Box and managing Box to be able to say, "Maybe you should look at this higher risk activity that's happening in the system." This is something that basically every single CISO on the planet has been asking us for when we go and talk about, which is, I don't want to just know every download, every upload, every access that somebody has done. I need that for forensics. I need that post facto. I need to be able to see that from an analysis standpoint. I want to be able to have more signal. I know that not all of my content is created or treated equally.
Those are the areas that I want to tune Box to be able to alert me on that type of activity. This is what Box Shield is all about, and we're going to be launching with two major capabilities. The first is anomaly detection and the second is smart access policies. Anomaly detection, again, lets you create rules for different types of pattern of work you want to be alerted to. Smart access lets you create classification policies to be able to have additional levels of security on highly restricted content. If you are a defense contractor, you might want to ensure that certain intellectual property isn't being shared outside the enterprise as compared to other content that can be.
You want to be able to classify your data intelligently and then have smart policies get kicked off because of that. That's what Box Shield is all about. Eventually, we'll be enabling a content firewall feature that gives you even more advanced security protection as content is being accessed and worked on. The only kind of guidance I'd give at a high level from a pricing and product standpoint is we are treating this initially as an add-on product. We were thinking about this in the realm of a governance. We are working on better ways that we can get this in the hands of as many customers as possible. Just hopefully you can appreciate some need for flexibility as we think about how we're going to bring this into market.
We think this completely bolsters and transforms our security story. We are working on the ultimate pricing and packaging of this product. The mission is every single, especially large organization on the planet, we want to make sure is leveraging this to be able to help secure their enterprise. There's certainly no guidance from a revenue standpoint and its contribution to Box. When you look at all of that, our digital workplace and how we're enabling a modern way of working, especially with third-party applications, digital business processes, and how do we actually go and begin to re-engineer the underlying process within an organization, bring more automation to that, and the future of security and compliance and data protection, especially as we go more and more global. We are delivering the most comprehensive platform in cloud content management.
We hope that you've seen that today and hopefully yesterday. We're really excited to be on this journey with obviously our shareholders and our partners, ultimately all of the customers in the world. That's cloud content management from Box. I'm going to hand it over to Jeetu, that's going to lead a panel hearing directly from customers on how they're transforming with the cloud and with Box. You'll hear some from Stef. We'll open it up for Q&A after Dylan. Thanks, Jeetu.
Thank you, Aaron. I'm going to go at a little bit of a slower pace than Aaron, we'll make sure we cover the same amount of content. What we thought we'd do is, rather than just talk a whole lot about ourselves, we thought we'd have our customers tell you about what problems they're solving with us and specifically what their journey has been as they've gone through. We've got three customers that I'd love to have on the panel. The way that we'll do this, we'll have the first 20 minutes or so with or maybe 25 minutes in Q&A that I've got a few questions I wanted to make sure that we can set a baseline for, and then open it up to Q&A for all of you as well.
This is a pretty big commitment from some of these customers to do this in this kind of audience. Typically, customers shy away from doing this. I really appreciate it. Why don't I just invite all the customers up on stage? We've got Ameriprise, and Scott from Ameriprise, who's the VP of App Dev there. We've got SunTrust, and Ken from SunTrust, who's the SVP and CIO I'm sorry, CTO. We've got Mike Antognoli, who's from Allstate. Three gentlemen. Three great customers that we've actually had a chance to work with, over the course of the past few months and years.
What I thought we'd do is we'd start out by maybe each one of you just sharing a little bit about what your role in the organization is, and specifically, what you've been doing and how your industry has been changing a little bit in a few seconds.
Okay.
Go ahead.
Thank you, Jeetu. Hopefully, everybody can hear me all right. I've been with Ameriprise 22 years, and all of that has been in technology. As far as my role and responsibilities, I'm responsible for application development for primarily focused on our advisor tools and capabilities. We have 10,000 advisors that are located all across the U.S., and ultimately, we want to ensure that they have the tools that they need in order to appropriately service and onboard new clients for our organization. Your second question was,
How is your world changing?
Well, regulations and regulatory environment obviously causes a fair amount of scrutiny.
Yeah.
Just ensuring that we have the appropriate controls in place to ensure that we're protecting the data of our clients and our advisors as well, that's definitely a major objective that we're trying to accomplish. Also just the digital movement, right? We're trying to become more and more efficient. We've got roots in paper, and unfortunately, that's the world that we live in, and I'm probably not alone making that statement. We're constantly trying to push the envelope and become more and more of a digital organization.
Great. Thank you. Ken?
Yeah. Glad to be here. Been at SunTrust about five years now. My current role is the consumer CTO that covers our consumer bank, which is primarily based on private wealth management, our retail, and all the omni-channel associated channels with the retail side, as well as mortgage. I also play an enterprise role for all of our client-facing digital across all of our businesses and also for all of our marketing technology. I've been in that role about a year now, but beforehand was involved in architecture and chief architecture to bring Box into the bank. For us, I mentioned it a little bit earlier today, the changing landscape of customer expectations and client expectations are leading us to really looking at technology differently.
When Aaron was talking about a lot of the different silos and all the different logos and how all this stuff has to stitch together, it's real for me. When we start looking at all of the different partners that we use, we're trying to look to make sure that we're leveraging partners who are more open. We're looking at architecture differently. We're looking across businesses more different than we ever have before. You can't really scale, especially for a bank our size. We all have to have apps, we all have to have certain things available to our clients.
We look for scale busters and things like the cloud and APIs and microservices and all of those terms are critically important in getting from the legacy to the future state of our architectures, and how we're going to expose that to our clients is top of mind.
That's awesome. Mike?
My name's Mike Antognoli. I lead the mobile product team at Allstate. My team's responsible for consumer mobility at Allstate. The insurance business has changed a lot. We're undergoing digital transformation similar to all firms in terms of trying to reduce costs and increase engagement, simplify. Those are all important themes, especially for insurance, because it tends to be unnecessarily complex, and it's a low engagement industry. Our digital programs are aligned towards that. Mobility has really kind of transformed insurance the last few years, and that's with the rise of telematics, and then also the use of photos and videos in property claims and insurance claims, and inspections.
We're going to talk about those use cases in a little bit. Scott, you've been a customer of ours for quite a while.
Correct.
The progression has been pretty remarkable, where you started as a journey with using our basic kind of content and collaboration products, and then over time, you've actually migrated a lot of data over to Box. You're using it in a much more sophisticated way. Can you just walk through the journey that you had with Box?
Absolutely. It's been an evolution.
Yeah
of sorts. It started in 2013. As you said, we basically rolled out our file sync and share capabilities from Box. We rolled out to all our advisors and staff. We were doing that to primarily address a corporate risk. Those advisors and staff, as I said, were a paper-based primary organization over the years. With that, we had advisors that were storing paper files with all of the client PII information in their filing cabinets. They were storing them in boxes, and who knows where those boxes ended up. As we tried to move them more and more towards electronic documents, they would then just save those documents on their laptops, which could then be exposed to theft and risk as well.
We really saw the advantages of being able to provide our advisors this cloud solution, a secure environment in order to store all of their documents associated with their clients. As we brought that on board, we got pretty decent uptake, but we were looking to try to get even a deeper lift out of our advisors. Many of them are franchisees. They can kind of dictate how they run their own businesses. In order to do that, we discovered that we kind of partnered with them a little bit, right? In the past, the only way they could get their new business set up was to send us forms overnight. We'd have to scan those in, run them through the back-end processes, and establish the account. They were spending money to do that as well.
We basically developed a new tool that allowed them to send documents electronically from their office, their desktop, to our home office. Basically, what we did is when we built and integrated it with Box and said, "The only way that you can do this electronically to get your faster return, and input into the home office and to save the cost is you got to leverage the Box Platform." That sealed the deal for us. They jumped right on board. They loved the faster uptake and account opening processes. That was a big win for us in 2014. 2016, we'd been collaborating, working with Box, around governance.
Because we are highly regulated, we had very large repositories for our books and records, FINRA compliance capabilities, we saw an opportunity in working with Box to be able to, again, consolidate those tools and capabilities and save money at the same time. In 2016, we purchased the Box Platform. We migrated dozens and dozens of terabytes of content off existing platforms, put them into the cloud on Box in a very safe and secure manner, that met our regulatory compliance. That was huge.
How much data did you migrate?
Roughly 110 terabytes. The latest one engagement that we've had with Box has been with Platform. That started in 2017, that was then focused more from our client side. We had a tool in place that was sitting on SharePoint. We had some challenges and some obstacles with that particular platform that allowed clients to actually share content with their advisors in a secure manner. We saw an opportunity with Box to, again, replace that existing platform with a more robust, more feature-based, secure solution and at a lower cost. We implemented that just early this year, and we now have, I think we've crossed over 500,000 clients that are leveraging that particular platform in about eight months.
Wow. You started with basic collaboration capabilities, you made sure that you actually were able to retire some of your legacy systems, add governance, make sure that you build applications and platform. Now, you've been able to take out a fair amount of cost from retiring your legacy CM systems, your network file shares, that kind of things in nature. Pretty comprehensive kind of journey.
The value's been across the board.
Yeah.
Not only from an experience perspective, a productivity perspective, but as you said, to the shareholder, cost save.
The announcements that we've made, are these relevant to the kind of things that you folks are going from a direction standpoint on the kind of innovations we're making in the product itself?
Yeah, I would agree with Ken. The comments that Aaron made is that you guys are thinking, Box is thinking in the right direction, right? The being able to pull all the pieces together. It just doesn't, for us, being a very large organization with a lot of history and a lot of skeletons in a legacy environment, it takes time to move things forward. I love the fact that Box is willing to partner with us and make the tools available, to kind of allow us to take advantage of those options.
Prior to Box, what were you using for doing all these things?
Particularly on the legacy side, we had, for the repositories, we had IBM FileNet, and then we had another large repository that was homegrown.
We were able to replace that.
The app dev work is probably with a bunch of different tooling that you might have had, but you were just building custom apps.
Correct.
Yep. Ken, what use cases are you focused on primarily as you think about SunTrust and where you saw the opportunity with Box?
Yeah. We've been a client now for almost a year officially. I think we're coming up on a year. The easy use cases are some of the things that you hear about, right? It's the file shares and the get off the SharePoint and the things like that, and those are all things that are in our pipeline and we're looking to work with. However, when you think about the whole components around putting business process and how do you establish better collaboration and workflow throughout your applications and stringing applications together, the first use case that we're really excited about is more along where you're really bringing your client and our back-office and middle-office teammates together.
We've got, what we think is a bespoke experience on a client portal that's more of a tailored digital experience where we expect to leverage Box almost as a client vault for all of our clients' documents. Right now, we have it live, our portal with our private wealth clients, but that will extend into our business, our wholesale banking, and business banking clients. If you think conceptually, especially in the wholesale business where you have the ability to go in, interact with the bank just as you normally do for a number of different ways that we would transact and do work with them, but then to be able to upload all your information seamlessly, very easy, but then allow that to automatically push workflow down into the different systems.
We, again, to use some of the logos on the page, we're a big Salesforce user. We've been a Salesforce client now for 15 years. We do a lot of loan origination on our Salesforce platform with our nCino partners. Being able to receive a document from a client and automatically kick off that workflow and send those documents directly into Salesforce and then be able to originate a potential loan or renewal or what have you, that is literally handoffs that we don't have to worry about that are automated workflow, that all start with the ability to interact with our client in a very different way, in a way that is secure and we don't have to worry about all the things that you talked about around files being shared or saved down to desktops or sitting in a drawer somewhere.
To also then be able to take that same file and send it across to different other systems, it's a pretty powerful vision in where we're ultimately wanting to head.
A year is a long enough amount of time. How would you gauge the relationship's going? What's the progress level that you think is being made internally?
I think the relationship's been fantastic. I think you mentioned the regulatory environment. We're no stranger to a regulatory environment in the financial services industry. I think when you think about the progression around the usage of public cloud and SaaS capabilities, the regulators continue to get more and more open and understanding about how some of these things are used. I think the biggest part that's been super helpful for us is just the work that your team has done to come in and help, not just educate our regulators and our teammates on how we can leverage the product, but even some of our own internal risk and audit teammates, so that way they can better understand how the product is used. I was sharing a story the other day.
We had an opportunity and had one of our auditors come and say, "I think we could use Box to fix this." Which two, three years ago, you would've never even thought that an auditor would say we should use cloud storage to solve a potential security problem. That's just a very different world.
Is that kind of shift starting to happen where as we're getting more and more mature in the cloud now, that people are now starting to say it's okay? As banking has been one of the slowest movers in moving into the cloud.
Yeah.
Are you starting to see that shift happen now?
Yeah, I think so. I think a lot of banks have taken a very strong kind of hybrid cloud or more private cloud approach. SaaS has always been big. We've done deals obviously with Salesforce and Workday and we're working with ServiceNow at the moment, and a lot of other of those big SaaS providers, which is great. I think you see more discussions around people leveraging, whether it be Microsoft, and we have a relationship with them.
Sure.
Amazon was our first kind of public cloud foray there. I think you're going to see people start to leverage it more and more. As the security continues to just get more and more beefed up, people start to realize that it's probably more secure in certain areas for certain workloads than if you had your own data center itself.
I know that this is something that is, as we build our partnerships out with the different collaborative editing tools, are you subscribing to the theory that, hey, while we might have a relationship with Microsoft, there are other people that might have different use cases for which they might want to use Google or iWork? Are you starting to see a lot of choice that you want to provide to your users?
Yeah, Aaron's comment about millennials, and I actually fit in that category, I'm right there on the cusp. I don't think I act like one all the time, but that's okay.
Me too.
Yeah, it's all good.
I'm a millennial. I'm 22.
Yep, exactly. I've got a whole design team, right? If you think about it, I don't think a lot of banks had a design team before in a consumer banking world. We just built products or integrated software.
Yeah.
My design team walks in the door, they all are looking not like me or not like 90% of the bankers in our offices, they want Macs, and we don't have Macs.
Boxers?
They look more like Boxers. They want Macs, they want Slack, they want this tool, they want that tool. They don't want to use anything we have. Anything.
Except for Box, of course.
Yes, of course.
Sure.
The reality is that we have to give them choice, right? I think I mentioned it earlier when we were talking, the war on talent is real.
Yeah.
You're either going to get with it, or you're not going to be around, or you're going to put suboptimal products out for your clients.
What you're saying is this is actually far more strategic from the standpoint of you won't be able to attract the right talent if you don't have the tooling in place.
Yeah. It is. I give you guys a lot of credit, the open concepts that you guys are working with, specifically in that AI space.
Yeah.
I remember sitting in the offices last year and starting to talk about the Box Skills and how you're looking at that. That's the exact type of approach and strategy that we want to have around. We want to be able to consume best of breed. We don't want to be locked into any given specific area. It allows us to move at speed and a pace that we wouldn't be able to do before. That strategy's fantastic.
That's awesome. Mike, now you're doing some super creative stuff at Allstate. You and I met about, I think, a year and a half ago when you were starting to think about this stuff. Can you share with everyone, how is insurance as a business changing? What do you do at Allstate, and what specifically are you doing with us?
We started looking at Box about a year ago, and we came to BoxWorks last year. We became a customer just in 2018. Our primary use case for Box is a little bit different, in that we are opening up our customer-facing mobile app to allow customers to upload content of their property. Photos and videos of their home, the contents inside their home, and we're going to store that in Box. Then we're going to share that with the back office when appropriate. We were really looking for a solution that was customer-centric, something that could go into a consumer-facing application at scale, but then also work with our back office systems. We really liked the things that were happening with Box. It was easy to use.
It's funny, I listen to Ken's stories because I'm also an employee of a financial organization, and some of those same themes that you mentioned are true for the mobile app developers and the designers that we have that work for us as well. It seemed like a great fit, a great solution. We were on a third-party vended solution before, and we had file storage Rackspace. We're in the process of converting that over to Box, and so far, so good. Our developers really like it. The Allstate policyholder will not even know that they're using Box. It's going to be seamlessly integrated into the Allstate mobile app.
We just saw it being a really good fit for what we wanted to do with property photos and videos, and all the different file formats that Box supports is a huge plus, and just really strong usability and ability to integrate into the rest of our systems as well.
The app that you've built, Box is fully white labeled. You as a user wouldn't even know that you're using Box in the background, but you didn't have to rebuild any of the encryption, sharing.
Exactly.
-security, all those capabilities.
Exactly.
You're just relying on APIs.
Exactly. Our developers like to build custom things, just like anywhere. The speed to market was so much better with a solution that passed security, that worked already, that already had UI components and already had a lot of that for them to develop on, is much faster and easier than us starting from scratch and building something 100% custom.
Prior to this, if you didn't have Box, what would you have How would your developers What kind of efficiencies did they get as a result of having these set of APIs for content?
Great question. They'd have to develop the APIs in addition to the front end. We'd have to work with our legacy storage and file-sharing tools inside of Allstate, ultimately, from a consumer-facing standpoint, I knew that's not where we wanted our content to go, because over time, that's all going to migrate to another place, because we're using a lot of legacy infrastructure and a lot of legacy file sharing and content storage places. I wanted to maybe jump ahead to where the marketplace is going, as opposed to, first of all, developing our own APIs was going to be custom, maintaining that custom code is too much work. We can't afford to do it. Last thing I wanted is our content to go into the legacy repositories. Like I said, all that stuff's going to change in the next few years.
Ken, I forgot to ask you this one, prior to using Box, what were the set of tools that you were using to get some of these things done?
I think we were collecting them all. We had every version of FileNet that you could possibly have. We did a lot on SharePoint. Even some people would use local OneDrive type stuff and not even really use it the right way.
What was your calculus, given that some tools like OneDrive and all of those are free, compared with the fact that you had to pay money for Box? Why did you decide to go that route?
I think it's features, functionality, security, all of the reasons that we talk about.
Is neutrality one of them? Where just business model-wise, we have a structural advantage from that standpoint?
I think the fact that you guys are taking, I mentioned it earlier, the open approach to everything. We're trying to be an open bank, right? As we continue to try to move towards open banking, we should probably eat our own dog food and not say, "Okay, we're going to make penny-wise and pound-foolish decisions." We want to put the best tools in our teammates' and our clients' hands as possible.
Yeah. We have about 10, 11 minutes left, so what I thought we'd do is we'd also open it up to questions in the room. I could keep going as you've witnessed over the past two days, but it'd be great to get some questions from the audience. Sir? I think we might have to get a microphone. How about I just run to you?
Thanks. Ittai from Oppenheimer. Just had a couple of questions on migration. As you first adopted Box, can you go through details on the complexity of moving something from a legacy system into Box? The complexity, both from an operational standpoint, but also the costs, the hidden costs that are associated in moving into Box. One of the challenges we have heard from customers all the time here when we talk to them is that the transition from a non-Box to a Box Platform is not simple. It's complicated. There's risks involved. There's hidden costs involved. Help me get my hands around that.
I guess I'll start with that one. For our content migration from primarily IBM FileNet and our internal back-end solution into Box, to a certain extent, we sat down and really were focused on trying to, ultimately, our primary driver for that and our funding mechanism was to generate the cost save. Obviously, we wanted to bring in the benefits of governance and all the retention rules and policies, and the compliance with our regulators. In order to really get us off the ground, we had to come up with some significant saves to essentially fund the effort and kind of self-fund it. In doing that, we didn't do a full, what I would call migration. We just migrated the content. We basically took the content that was sitting in a back-end repository.
We had applications that had front ends that accessed the documents, really from more of an end-user perspective. We didn't touch the end-user perspective. All we did was really uplift and shift the content from one repository to Box. Basically, we leveraged Box in this particular scenario from a governance perspective as an alternative storage solution. Then really the cost that we had to incur was leveraging the Box APIs that were available to us to write services so that those front-end applications, when they wanted to do a search or they wanted to view a particular document, they would call a service layer that would then access the Box APIs to render the information coming back. We were very efficient from the standpoint of being able to. The time-consuming thing was just moving the content.
To write the services and build the interfaces didn't take us that much time. It was basically a 12-month project, and 6 to 9 months of it was to complete the migration. It really worked very well for us, and we didn't touch any of our end users from an impact perspective. That was kind of the way that we tried to be creative in creating a project and a funding mechanism in order to move forward.
Other questions? One over here.
Hi. Thanks, guys, for your time. Phil Winslow, Wells Fargo. Have a question about Box Skills. Obviously, you're just coming into a GA here, what are your thoughts on Box Skills in terms of applying it into your implementation of Box? Each of you has had some sort of legacy ECM tool. When you think about their AI strategies of sort of spin your own versus Box's, I don't know, call it BYOML or something, the BYOAI in the chain together multiple clouds, how do you think about that as well?
Maybe Mike and Ken can start with that. Either one of you.
Yeah, I can just tell you my thoughts on image recognition and that kind of technology. We have developers and IT people who want to develop that themselves using Watson or Google Cloud. I say maybe that's fine, and they put together the POCs and they do it on their own. If we're just going to get it as part of a product extension for a product that we're already using, and it leverages the best of breed across all those different AI tools, then I'd rather just ride the roadmap up of where the industry's going from a leader like Box or someone else than try to maintain our own custom. I look at it as a big plus. We haven't used it yet, so it's early days coming out. Thank you for building it. I think we'll get to it at some point.
I think it's just a matter of time before everyone's using these types of things.
Yeah. I'll answer it with a slightly different lens, right? I don't have the same budget as a lot of the larger institutions might have, right? I look at where am I going to spend my precious dollars that I have to make sure I'm creating a competitive advantage for the bank. If I have the ability to consume capabilities from some of these providers, whether it be Google or Amazon or whatever, to your point, and not have to build something, I'd rather focus and double down on really building something that's going to lead to a much better client experience than ultimately build stuff that's commoditized.
I think the idea that not only do I not have to build it, but Box themselves figured out a way to ultimately be the place where they can connect their clients to other solutions that are already there is a fantastic value prop for folks at least our size or even smaller.
Other questions? There's one over here.
Thanks. Yeah. Ken, your comments about the war on talent and some of the newer recruits not wanting the services that you have, can you be more specific? What are some examples of those vendors, applications or services that you're using? Because I think that's pretty important to understand the changes.
Yeah. Anything that runs on a mainframe. It's funny, I was telling my wife that I want my kids to grow up and go and learn COBOL because I think honestly, if you were a kid in college right now and you could do some COBOL, you might be able to demand quite the salary. That's true. It's a lot of the stuff that's running on these old mainframe solutions I think certain products, and I won't tell you which ones, they're older than I am, especially in the financial services space. You think of a lot of us and competitors, they're running a lot of siloed applications, big cores on the back end.
I think at first you saw cloud attack more of the front-end applications and more of the user and then work their way through the middle office with things like Salesforce and other workflow solutions come into play. I think you already see it right now in the industry, where now you've got companies that are attacking those big, nasty legacy core processing components and looking at leveraging cloud capabilities to do that. Nobody wants to come in and work on a system that was from 1970.
Ken, would you also say that it's not just the mainframe applications but there's a lot of client server applications-
Oh, yeah
if you look at the millennials, that's not the pattern of work in which they want to work in, which are very heavy interface, and they want something that's mobile and lightweight and something that can be very collaborative.
Go to any bank and I guarantee that the majority of the banks, if you ask them how do you originate a loan in your bank, they probably have 16 different loan origination systems.
Yeah.
The majority of them are not ones that are very flexible. They're not API or microservices driven. They're legacy. Integration and it's just point-to-point stuff that's not what they want to do. Even, I would say more so on the analytics side. When you start thinking about data and analytics, there's not a lot of people that are itching to leverage things like SAS grids. They're wanting to use R and Python and more of these open source tools because that's what they're learning in school, and there's power behind those tools. You've got to figure out a way to not just change what's on the glass for your users and your clients, but truly, what are you exposing to your internal employees.
Even if you give them a foosball table.
Doesn't work
It's not good enough.
Foosball table and mainframe are a bad combination.
Yeah, it's not. You're living a lie.
Yeah.
We'll take another maybe one or two questions. One question, maybe. No.
There's one at the back.
Of course. Aaron has a question.
Who was the auditor working for Box?
I-
Who was the auditor that was using Box?
We will not go there, but good try.
I do have one question, though.
Mike.
One thing, Ken, that you did with your team was actually you took a tour of Box, and you actually went at a deeper level than just our product or functionality, but how we built software, how we operated. How do you see just like when you think about your next generation of vendors and the deeper partnership with them, how do you see that changing? Maybe Scott and Mike feel free to chime in also, but I do think that's actually a changing current of we're going deeper from a partnership standpoint with customers and really culturally being a lot more integrated in that sense.
Yeah. I will tell you, we were still kind of dating at that point in time. I came over to the office, and I think we were in the middle of really looking at our IT strategy and how we are looking at infrastructure as code, and how are we leaning into DevOps and changing and delivering in a more agile fashion. What was really fascinating was just to be able to pick the brain and understand the journey and the transformation that you all had at Box, where you're going from your own data centers to leveraging cloud, to looking at APIs and microservices, to moving into DevOps. Last night I was bothering Jeetu at the hotel as soon as I landed and asking him, "What do you call your software engineers?
How do you look at the progression in talent, and what are some of those product managers do, and what are the differences between this level and that level?" I think that's been really helpful. I spent a couple of minutes talking about Kubernetes with one of your guys last time, and containerization strategies. That's the piece that's really cool is that you're not just selling me a product, you're actually interested in our transformation. Personally, I haven't seen Aaron in a while, and the first thing he said was, "Hey, how's the DevOps thing going?" Because that matters. That means something as a client, and I thank you and the rest of your team for that.
Well, I have to say on behalf of everyone at Box, I'm sure the audience as well, we really appreciate you being so candid and transparent and open with us. Thank you for taking the time to come out all the way to the event. Big round of applause. Hopefully you have a great rest of the event.
Great.
Thanks so much.
Thanks.
Cheers. Mike, thank you. Next up is Steph.
Hi, everyone. Thanks, Jeetu. You sort of did my job for me, I think, I appreciate that. Good afternoon, everyone. I'm excited to be here again. I'm going to dive right in and take us through our strategy, then head over to Dylan before we do questions. Let's talk about solution selling. As you just heard from three of our clients, I've spent the last 48 hours with over 50 or 60 of our CIOs, enterprises are all embarking on this digital transformation. You heard from three that are fairly advanced in financial services. The reality is they're all at different stages. I sat with a group of clients yesterday at CIO Works. We had a manufacturer and a very large food organization, both at the very beginning of their journey.
They've got a lot of legacy systems, they're trying to figure out what that story looks like for them. We all know that the future of work is going to look radically different, you heard from these three gentlemen that they've seen it within their own organizations. As we spend more time with enterprises, there is no doubt in our mind that cloud content management is the solution that's essentially going to revolutionize the way they do business. What I'd like to do today is sort of give you an essence of some of the things that we've been doing. Really it is about putting the customer first. It was really nice to hear Ken speak at the end about the interaction and the engagements that we have with our clients. We have over 87,000 customers.
They're at the center of everything we do. They're core to our strategy and the priorities that we set for ourselves every day. As I think about it, I sort of bucket it into three areas. From a market reach perspective, we obviously work with clients of all shapes and sizes across all industries and government. We really look to do this across all geographies as well. They're looking for us to continue to drive and help them sort of develop these strategies as they go and embark on these journeys. We've got to go deeper with our engagements. It was funny to hear Ken talk about the auditors and the extended enterprise seeing the solutions of Box. The reality is we've maintained and nurtured great relationships with CIOs and IT teams and CISOs over the years.
The fact of the matter is we've spent the last few years going deeper into these organizations and building relationships across all lines of business and across the extended enterprise. We know that when we do this, we're actually solving for problems. That's what we're trying to do on this journey. This is not about file sync and share. You just sort of heard it very clearly from these three clients, but we hear it every single day. I'm on the road constantly, the reality is they're thinking about content as sort of the core essence of their strategy. Going deeper is critical for us to be able to help them on that journey. They're asking us, who are these best of breeds?
The reality is we feel very fortunate to be partnering with so many of them and really building these deep integrations. Together, we're helping customers on their journey, we're helping them transform the way they work, both inside their organizations and more broadly across the organization. What I wanted to do, not realizing that the three clients would do this for me, I wanted to try and illustrate for you this evolution that we're seeing from being sort of a single product, single-threaded, to really selling solutions. I thought I'd just pick one of our clients, this is a Fortune 100 customer. It's a technology company. I wanted to show you sort of the evolution of our engagement with this particular organization. About five or so years ago, we started a proof of concept.
At the time, it was around secure external collaboration. It was within a very specific sort of line of business within their organization. Very quickly, it started to go viral. As we went in, we continued to develop deeper relationships, the CIO gave us access to other parts of the organization, very quickly we started to see widespread adoption of Box. They recognized that there were more use cases that were becoming more prevalent. The next two use cases that they identified was the opportunity to do more around their partner and vendor management, which is a really big piece of their business. Together with their developers, they built some really cool apps using Box Platform to essentially just revolutionize that entire part of their business, really fundamentally change the processes and workflows that they were using.
We continue to grow this as we've gone further and further in the organization. They're now not quite wall-to-wall, but just about. In the last 12 months, with all of the security breaches and cybersecurity and ongoing regulatory sort of demands on the customer, they saw that it was important to purchase governance as well. We're continuing to drive this solution sale. This is what they're expecting from us. We're doing this in conjunction with our partners, but we're spending a lot of time really thinking about how do we help them sort of really shift within their organizations. What I wanted to do is really sort of take you on the journey that we've had for the last 10 or 11 months since I last saw many of you.
When we were last up here, I shared with you sort of what I consider to be our four key pillars to really drive in growth. Just a reminder for everyone, I said to you we wanted to 2X, 3X ACV. We want to continue to drive retention across our customer base. We want to extend our reach, both in terms of international markets, but more importantly, our partner ecosystem. All importantly, we wanted to make sure that we were driving the efficiencies across our organization. Let me jump in and give you a little bit of an update on what we've been doing. We'll start with ACV. We've seen some really good progress.
The first half of the year, our $100,000 deals grew nearly 30%, which is a really good leading indicator in terms of our strategy and our evolution to solution selling, and the overall growth that we're trying to see around ACV. What we did, in essence, in a very structural and operational way, we made some changes in order to really start to drive that evolution. The first thing we did was we looked at incentives and goals, we made some changes to the compensation plan. By doing this, we put additional focus on our key thresholds, so 100K, 500K, and above $1 million. We really started to drive the sellers thinking about going deeper and wider and really thinking about selling solutions. At the same time, we made it critically important to continue to drive add-on products.
We built that into the plan to drive that behavioral change. The second thing we did is we added some sales specialist resources. As we continue to add to our portfolio of products, we wanted to make sure, having done this for a long time, you've got to take sellers and customers on this journey. We brought some specialist overlay resources in who could go deeper in governance or in GxP, or in Platform. That has really started to get some traction. We did some work to pipeline development.
We've revisited some of the methodologies and models that we had in place to really help us focus on the different types of personas in our organization, to really start to drive to the right context in our customers and to deepen these engagements and generate some new logos and new business for us as well. As a result of doing that, we've been able to really continue to drive our executive programs and just start to strengthen the relationships more broadly across our customers. These efforts have really started to shift and accelerate the evolution to being really a solution-selling organization. On top of what we saw with the big deals, we started to see other really positive indicators. From a product add-on perspective, as you can see, 70% of the deals over 100K had product attached to it.
Even our smaller deals still had nearly 50% product attached. This is work that I'm doing in conjunction with Jeetu and other people across the organization to really holistically start thinking about how we continue to drive deeper with our customers. That led to an increase in our add-on product bookings as well. Year-over-year, we saw a 60% growth in the first half. We know that we're starting to get traction. Again, just speaking to our customers, they're looking for us to continue to help them as they rethink sort of the organization and the processes within them. That's a little bit about ACV. Retention. We've done a lot in retention as well, really trying to ensure that we're driving greater adoption and usage of our products in all of our customers.
Within customer success, we continue to fine-tune our model in how we best can service our customers and really drive that user growth. As part of that effort, one of the things that's really enabled us to actually continue to go deeper is our Box Consulting. I think last year I mentioned that we were going to double down in terms of our consulting, and it really is driving those partnerships in order to really increase our retention rates. As you can see, again, we saw an increased attach rate of consulting services, doubled it year-over-year in the first half. We had over 700 engagements in the first half around implementation, change management, which is really critical.
I heard a little bit about this Our customer panel, this is really top of mind, I'll share a little bit more in the partner ecosystem section, then just digital transformation. A lot of this happened as a result of some of the new offerings we brought into market. We announced Box Transform earlier in the year, Box Shuttle, which is our data migration service offering. Both of these services have really helped us work more closely with our customers as they embark, and they continue to accelerate their digital transformation journeys. We also made structural changes to the comp plan for consulting as well.
We sort of put it up as sort of right in lights, next to product add-on, and really the solution selling, because quite frankly, we believe there's a tremendous opportunity for us and for our partners to really help customers, especially around change management, and some of the work that we're doing around digital transformation. We decided to make a structural change there as well. The next area is reach. When I talk about reach, I think about it in two different ways. I think about our international markets and the investments that we've made there. Then I think about our partner ecosystem that really sort of gives us that extended reach and differentiation. We'll start with our international markets. As you can see, they're continuing to represent a larger slice of the pie for us and up to 24% of our total revenue.
We've seen some really interesting things happen over the last few months. We made a leadership change in EMEA. We're really excited to have Chris Baker come on board. He's been on board now for just under a month. We're excited to have that new leadership. We introduced some great new products. Multi-Zones was incredibly well-received both in EMEA and in Japan. Then we felt really good about being one of the very first SaaS companies, if not the first, to be GDPR ready back in May, the day this went live, so to speak, in EMEA. We've continued to really put the right foundation in place to accelerate our business in Europe. We put a new leader in place in Australia. Then Japan, what can I say? Japan continues to go from strength to strength.
Katsan has built an incredible team on the ground there, and they continue to drive into the enterprise with very large global brands, and we've seen this acceleration. We recently had our version of BoxWorks, Box World Tour in Japan, which Aaron spoke at a couple of months back. It was incredible. We had nearly 4,000 people. They have close to 400-500 partners actively wanting to work with us. It's a really, really great story. We have clearly been able to articulate our value proposition in that market. We continue to go from strength to strength. We'll continue to see more of that in the future. Then the other side of reach is our partners. I'm just going to build this out.
You've probably, for those of you who have had the opportunity to be at the conference this week, you've heard a lot about the importance that we're putting on our partners. They're really a critical piece of the puzzle for us. I think I went through this last year, just a refresher for folks. We have 5 different partner types, not sort of atypical. It's very typical of most tech companies. We've been able to continue to focus on strengthening our relationships in each of these categories, our technology partners, our SIs, our resellers, service providers, and then the strategic partnerships that we have with Microsoft and IBM.
They are a critical part of our success story to driving to solution selling because quite frankly, as you heard from the panel today, our customers are looking for us to bring other partners to the table to help them solve for problems. As we go deeper with these use cases, be they either horizontal or vertical, they are looking for best of breeds as they create their own technology stacks. We feel very proud of the work that Niall and his team is doing in really driving this, and you'll see more to come on this over the next months. In terms of some of the things that we've been doing and the results, as you can see, 40% of our bookings was influenced or touched by partners, which is sort of a record high for us, and it's 32% year-over-year growth.
They really are becoming a key part of the story. We've had tremendous amount of success in recent times with some of the ISVs and the system integrators, I think the folks on the panel mentioned a few of the partners that we've been playing with, they're really key to helping us solve for some of these problems. The integrations are critical. We made some terrific announcements this week. You heard about some of the work we've done in recent times, G Suite and Quip, continuing to work with Apple and Microsoft. Of course, the skills, the importance of skills as we move forward and really continuing to further deepen our partnerships with our cloud providers.
Just to give you an example of kind of what the landscape looks like for a customer and why our role becomes critically important for them on this journey. This is Jones Lang LaSalle. They're one of the world's largest real estate and property developers. As we've worked with them for a long time, they've been a great client of ours. This is kind of their modern technology stack. This is what's helping them be successful. Just very quickly, they use Office 365 for everyday collaboration. They use Adobe Sign because they have hundreds of thousands of contracts being distributed all over the world as they sign up new properties. They use Salesforce for their account managers, their property managers. They all manage their customer relationships through Salesforce. They're using Tableau for insights and analytics.
Their reseller was AHEAD, they use a really great little niche systems integrator, CodeLead, who partnered with them to develop a real estate application that really is changing how properties are managed. This is pretty typical, quite candidly, therefore for us, it's a tremendous opportunity to go deeper and wider and really start to think about expanding our footprint and really moving towards this solution sale. Lastly, efficiency. We've continued to really focus in on some of the primary productivity drivers. I've spoken about a number of them, sort of the changes we've made to really driving our pipeline model, the big deal on the product add-on consulting attach rates, the partner influence deals. As you can see, we're headed in the right direction. We're making really good progress on this front.
I feel good about the strategy that we put into place when I last spoke with you. If I sort of bring it all back together, it sort of starts and finishes with the customers. They are trying to navigate these waters, and the job of the CIO has definitely not gotten any easier in the 25 years I've been at this. We try to put them at the center of everything we do, from engineering up. As we think about what they're looking for, we're here to help them and serve them in whatever industry they're in, whatever country they reside in.
We're going to continue to deepen our relationships, and we're going to bring our best-of-breed partnerships to the table, because I truly believe, and what we continue to hear from our customers, is that cloud content management is going to revolutionize the way they do business. It's going to fundamentally transform the way they work. We have this incredible opportunity that we're going to continue to capitalize on. That is a brief summary of what we've been doing. I'll hand over to Dylan, and then we'll take some questions at the end. Thank you.
Awesome. Thanks, Steph. Cool. I'm Dylan Smith, Box Co-founder and Chief Financial Officer. Today, Aaron gave a recap of our product strategy as well as a lot of the announcements from this week. Jeetu discussed how this is showing up in customer environments, leading a discussion with some of our customers, then Steph shared how we've been delivering these new solutions into the market. What I'll talk about today is how all of this comes together and flows into the numbers and our financial model, with a focus on how we're driving growth and overall leverage in the business model. First, wanted to give a recap of financial results from the first half of the year. As a reminder, Box has a January 31st fiscal year end, so we're currently in FY 2019.
That means we wrapped up our second quarter on July 31st, and we reported those results just a couple of days ago. While we're still fairly early in our solution-selling evolution, we've had a really solid start to the year, as Steph just discussed. Overall, our revenue growth in the first half was 20% year-on-year and 22% on a like-for-like basis. Our billings growth rate in the first half was 17%, and when adjusting for the impact of the enhanced developer fee that we've talked about, that growth rate would have been in the low 20s as well. On the bottom line, we delivered a $0.12 improvement on non-GAAP EPS, and we're committed to delivering positive non-GAAP EPS in the fourth quarter of this year. We've also seen strong progress on our cash flows, improving cash from operations by $18 million year-on-year.
If we look at, because our cash flow is fairly seasonal based on billings, if we look at the trailing 12 months for the business, we've generated $55 million of cash from operations, which is roughly 10% of revenue over that time period. Our free cash flow has followed a similar trajectory, although the improvement's a little bit less because we did have some facilities-related CapEx in the first half of the year that we didn't have the year prior, and we've seen an increase in capital lease payments as well. Overall, these results demonstrate the strong momentum that we've been seeing in the business. Today, we've shared why we believe that we are so well-positioned to go after the massive cloud content management market opportunity in front of us.
Steph joined a year ago this month and has really helped us accelerate our evolution in terms of how we sell these solutions and the traction that we've made around cloud content management. Today, I'm going to double-click into some of these metrics that sort of represent how we think about a successful evolution on those dimensions, as well as how our customer cohorts and our customer economics have been improving as a result. Finally, we'll talk about Box's overall business model, specifically where we have been and expect to generate leverage and growth on our path to $1 billion and beyond. This evolution into cloud content management wouldn't be possible without all the innovation that we've been driving across our product portfolio.
As a reminder, we went public about three and a half years ago as a single product company, by the end of this year, we'll have delivered seven additional products into the market. Some of these have helped us enter new markets, some of them have helped us deepen our cloud content management use cases, and all of them have led to an uplift in the customer value that we're providing. We're actually seeing a bigger uplift on a price per seat basis when we sell these products versus what we were seeing a year ago. Back then, that uplift was in the 20%-30% range above the core per product, and this year it's been in the 30%-40% range.
We've also introduced a couple of catalysts that have really helped drive this disruption in the markets that we're serving and the increase in Box adoption. Box Drive was launched earlier this year. That doesn't show up in this chart as it's not a separate add-on revenue generating product, but it's really helped customers move off of some of these legacy network file shares and the like. We also will be introducing Box Skills later this year, which can be a big catalyst as it allows customers to go after some of these use cases around artificial intelligence, machine learning, that are just not possible in an on-premises environment. Box Zones also became generally available. That's kind of rolled into the zones line, so not called out here. We also announced the general availability of Box Shield for next year.
Combined, these new add-on products have been generating between 20%-25% of our new bookings over the past few quarters. By the time we're at a billion-dollar run rate, we expect the contribution from these add-on products to be in the 50% range of new bookings. These products are becoming increasingly material for us, and they're also helping drive higher pricing. What we've seen in the first half of the year is about a 30% increase in overall price per seat versus where we were just a couple of years ago. We talked about for many years as having a stable per-user pricing in the $100 per user per year range. We did see kind of on a like-for-like basis, increases in terms of even what customers were buying the core seats for, but that was being offset by volume discounting.
As we moved upmarket, we've sold larger deals, and we tend to offer volume discounts with those. That's why in Q4, when you look at this chart, you see a little bit of a seasonal dip as we have a higher volume of the larger deals in that period. Over the past 18 months, this volume discounting has been more than offset by the impact of these add-on products as they increasingly gain traction. Of that 30% improvement we've seen over the past couple of years, about two-thirds of that is being driven by the impact of these add-on products, and the other third is being driven by an increase in the core seat price that we've been able to command. As we look at the overall new product attach rates, it's so fundamental to our strategy, you get to see this one twice.
As Steph noted, and as you can see, we've had a 10 percentage point improvement in the attach rate in the first half of this year versus last year in customers or in deals that are at least $100,000 in value. That impact and improvement is in the high teens for deals in the $10,000-$100,000 range, pretty pleased with the progress across all of those customers. Governance has really been leading the charge. About 60% of the six-figure deals that we've sold year to date had governance attached, and platform has been performing really nicely as well. In the first half, attached about 20% of the six-figure deals we sold and also coming off a very strong Q4 that we had.
This slide is showing the same trends and the same cuts of our customer base, but now looking at what the cumulative attach rate is for these add-on products across our customer base, not just the new deals in that period, and the attach rate that we showed on the last slide. You've seen in our $100k-plus customer population, now 44% of those customers have purchased at least one add-on product, and that's a significant improvement over 30% a year ago. Going forward, we will continue to introduce additional products into the market, and we will also be launching various initiatives, including product suites, to further enable these solution selling motions and to drive multiple products across our customer base. Solution selling isn't just leading to bigger deals and higher pricing, it's also leading to stickier customer deployments as well.
One of the metrics that we highlight and are very proud of is our overall churn rate, here in the middle on this slide, that's sitting at 4.5% on an annualized basis. The exciting dynamic that we're seeing is when a customer has purchased an add-on product and is up for renewal, we see less than 2% churn in that customer population, right? That stickier population is growing as a percentage of our overall business, as we saw on the last slide. As a reminder, all of these metrics are trailing 12-month metrics, looking at the population of customers that are paying at least $5,000 a year. We also are seeing really strong economics, even in our smallest customers.
Although they're not showing up in these metrics, the churn rate is a bit higher, but the expansion is a lot higher, so the overall net retention in our smallest customers is actually even stronger than the metric that we report. We have seen over time, a decrease in our net expansion rates. As we've talked about, that's being driven by a couple of different factors. The first of which is that we are increasingly seeing larger initial deals, which while it's great for the business, does in some cases take away from that future expansion opportunity in those customers. We are also seeing some downward pressure on this rate from the expansion of some of our oldest customer cohorts, and we'll talk about some of the details there in just a bit.
Overall, we have a lot of confidence in the stability in these metrics, both because we are seeing an improvement in the in-period churn over the last couple of quarters, even though it's not being fully captured in these metrics because of the way it's calculated. We're also seeing a really strong pipeline of customer expansion, particularly in the fourth quarter. Here we'll drill into the customer growth, as that land and expand dynamic is really the underlying engine that's driving growth across all customer cohorts. What you're looking at on the right is the compounded annual growth rate of each of our customer cohorts since the time of their initial sale.
What we're looking at and seeing in the business over the past 12 months is that our newer customers, especially those who are adopting add-on products and our newer customer cohorts, are growing faster. If you look at the net retention rate in the population of customers who signed up through FY 2014, that's about 106%. The customers who signed up between FY 2015 and FY 2017 is about 115%, and our newest customer adds are growing even faster. Right. We really haven't had as much success driving add-on product attach into some of our oldest customers, and that's a big focus area and opportunity for us going forward. Here we're looking at all of our customers who, as of the end of the second quarter, were paying at least $1 million, had at least $1 million of recurring revenue.
Going through this is definitely my favorite part of Analyst Day preparation, kind of looking at every single one of these sales to all of these customers, reading the deal notes, all of that. This year was able to have twice as much fun as a couple of years ago, as we now have 60 customers paying at least $1 million annually versus 32 years ago. Just to orient everyone, what you're looking at here, each one of these 60 customers is a row on this chart. These blue boxes represent a year in which that customer expanded, grew their contract value with us, then those green boxes represent the year that those customers first passed that $1 million recurring revenue run rate.
Increasingly, or what you're seeing overall is that the trends that we talked about a year ago haven't changed significantly, but we continue to see a lot of success and traction in these customers. Over the past 18 months, 52 of these 60 customers have grown their contract value with us. One thing that we are seeing increasingly, especially if you look at the lower right of this chart, is, as I mentioned earlier, we are more often seeing larger initial sales to these customers as these green boxes are showing up a lot earlier, more regularly over the past few years. Interestingly, on the other side, if you look at our overall big deal sales, $500K-plus deals, $1 million-plus deals, those are increasingly being sold to customers who are already paying at least $1 million.
What we are seeing, though, is a change in what these customers are buying, particularly the types of products and kind of multiple products and all of that. That's what's being shown through these blue stars. Those represent a deal that included at least one of our add-on products. Overall, 60% of these customers have now purchased at least one add-on product. That's a big change from 25%, which is where we were a couple of years ago. We still have a lot more room to drive these additional products and deepen these use cases, even in our largest customers. We see a big opportunity for continued growth, not just by selling additional products, but by selling additional seats as well. From an industry standpoint, you can see there's a pretty good mix of industries here.
We tend to see, and have seen the greatest success in the most regulated industries. Financial services has performed really well for us over the past couple of years, and that's been largely fueled by the success of Box Platform for those customers. We now have a dozen $1 million-plus financial services customers, and all but one of them have purchased at least one add-on product. Now we're going to revisit the economics that we see across the customer life cycle, comparing costs to land, expand, and renew our customer base and our revenue base, and how that translates into a highly profitable customer base over time. All expenses that we're going to be looking at are fully burdened expenses, so it captures everything you'd see in the P&L, from ramping reps to allocated expenses like rent to IT. Starting with the acquisition side of the house.
We've seen an improvement here over the past year. We now spend about $1.65 in sales and marketing for every dollar of new annual recurring revenue that we bring in. That's an improvement from $1.75 a year ago and $1.90 the year before that. What's causing this? Largely being caused by, as I mentioned earlier, larger upfront deals, which leads to a lower overall customer acquisition cost, as you don't necessarily see a much different sales cost or sales and marketing cost, whether when you go through an enterprise selling cycle, whether you land on the other end of that with a $100K versus $1 million deal. That's definitely driving some leverage in the model. We're also seeing some pretty good signs on the productivity front.
Our ramped rep productivity is up slightly year-over-year, which is helping this metric, although overall productivity has been roughly flat as we've been scaling out the sales force, as we've talked about. Even overall productivity and what accounting for this is up in North America, Australia, and Japan year-over-year. Although overall productivity is down year-over-year in EMEA as well as Canada, although that's largely a function of how we've been scaling out what is still a relatively small sales team. Turning to the expand selling motion. As you'd expect, this is more efficient than landing customers. Once we've built relationships with customers, cleared the initial security legal compliance hurdles, we tend to see much smoother deal processes as well as higher win rates. We spend $0.90 in sales and marketing for each dollar of recurring expand revenue.
We break even on that spend within a year, and that's fairly consistent with what we saw last year. We continue to have a highly efficient renewal engine. We still spend about $0.05 of sales and marketing for every renewal dollar that we bring in. If you think about the economics of our overall renewal base, assuming 75% gross margins, you're looking at a contribution margin for those customers of about 70%. What all this means is that as our customer base continues to grow and mature, it drives a huge amount of leverage naturally in our business model. When you put it all together, every dollar of new annual recurring revenue that we bring in will ultimately generate more than $9 of value over a 10-year period with today's customer economics.
This includes not just the sales and marketing costs, but the cost to serve those customers as well. Again, really, that means that there is enormous future value embedded in our roughly $600 million recurring revenue base today. While we're pretty pleased with these economics and the improvements we've driven in some of these areas, there's a lot that we're doing to improve efficiencies across the business, particularly around sales and marketing. Overall, we've driven pretty significant leverage in sales and marketing over the past year, six percentage points in the first half of the year relative to the first half last year, even as we've been scaling out our sales force, and that was eight percentage points in Q2. Going bottom to top in terms of these categories of spend, the first is around headcount spend.
We have driven a little bit of leverage there, but as talked about, it has been an investment year over the past year for us, especially as it relates to scaling out our sales force. The majority of that leverage is actually driven by the way that commissions expenses are treated under 606 versus 605. There's some leverage there, but not the full kind of four percentage points that you're looking at. We have, as mentioned, had a target and are on track to grow that sales force quota-carrying reps by about 20% this year. Based on everything that we're seeing in the business, at this point, we would expect to see roughly the same growth in our sales force next year in FY 2020.
The next category, flat year-over-year, that's overhead, everything that's oftentimes tied to headcount, but also includes other kind of expenses like IT, travel, et cetera. We have driven some improvements there, but that's been offset by the expansion of many of our different facilities and rent expense as we've opened or expanded a few different offices that we'll now scale into over time. Lastly, where we've driven a lot of improvement is our overall demand gen efforts. Last year at Analyst Day, we talked about some of the marketing and other infrastructure investments we plan to make, and those are already starting to show up and generating higher ROI for a lot of the dollars that we're putting into the market in the form of pipeline and new ARR.
We've been able to drive leverage there in the model, and 1% of that improvement is also related to the decrease in cost to support our free user base or free user marketing, which shows up in sales and marketing. Going forward, we expect to continue to see a lot of these trends playing out from an inherent business model leverage point of view. We've talked about the way that the different costs of land, expand, and renewals drive leverage in the model. We also expect to see our average rep tenure and productivity improve as those ramping reps become more tenured and expect to continue to drive scale in other areas of the business naturally, whether it's free user marketing or rent expense because of some of the recent build-outs.
Going forward, as Steph mentioned and as we've talked about, we're very focused on driving improvements in rep productivity as we further drive these solution selling efforts into the market. We're also doing a lot to improve our lead to close efficiency, shorten deal cycles, whether it's from a systems point of view or moving more and more of these transactions online as a fulfillment channel, as you build out that infrastructure, and that should drive efficiencies not just in sales and marketing, but in G&A as well. Finally, expecting to really leverage our partners to enhance sales efficiency. As just one example, Japan is almost an entirely partner-led selling motion, and that's the region where we see the best sales efficiencies out of our different regions globally.
We're not just driving leverage and haven't been just driving leverage in sales and marketing, but really across all areas of the business. You can see that across the various categories through those charts on the left. That also flows directly through to operating margins. Again, we are on track to deliver positive non-GAAP operating margins in the fourth quarter of this year. We've also seen strong free cash flow margin improvements. Because of the seasonality I mentioned earlier, that's why we split out the first half in that chart. We are committed to delivering positive free cash flow in the third quarter of this year, the fourth quarter of this year, and for FY 2019 overall. Overall, we're making strong progress toward our billion-dollar model, and we expect to see steady improvements in leverage in each of the years to come.
Really it's this combination of innovation, cloud content management traction, and our compelling customer economics that gives us such confidence that we're on a path to building a multi-billion dollar company. The past several quarters, we have been very focused on driving solution selling across the business, both as it relates to enablement, customer education, and pipeline generation. While this takes time, things are working, and we're seeing very strong demand across our customer base and prospects. Just to hit on some of the key growth drivers we've talked about and how we think about measuring success in these areas, from an add-on product point of view, that would show up, as you'd imagine, in terms of add-on product attach rates, as well as big deal outcomes and ultimately customer retention.
In terms of driving deeper customer engagements, that should show up both in terms of customer expansion as well as reduced churn or customer retention. We'd also expect to see strong continued progress on large Box Consulting deals that are used to drive customer transformations. On the partnership side, we've been building a world-class partner ecosystem to expand distribution and leverage, as Steph talked about. It's also an important enabler and contributor to our technology and what we can offer to customers. For example, both Box Zones and Box Skills, as well as Box Relay, have been very closely connected to the strategic partnerships that we've been building and enabled by that. Then on the international front, we continue to see a lot of focus from customers around data residency and privacy, compliance, and those play into Box's strengths.
We expect international growth to outpace growth in North America, at least for the next several years to come. All of these growth drivers, if we're successful, should also have a positive impact on rep productivity, as well as overall leverage in the model. As it relates to that market overall and the obligatory TAM slide, that I had the good fortune of got to speak to this one. We are in a complex and evolving market, and it's at the center of increasingly valuable content-centric use cases. We're already seeing a big shift in over just the past couple of years, in how customers are thinking about the market, and how they're increasingly deploying Box to address more of these cloud content management use cases, versus enterprise file sync and share use cases.
As our product evolves, we are well-positioned to disrupt all of these different categories of spends, whether it is retiring a legacy network storage, to disrupting a huge chunk of the enterprise content management market, to addressing some of these emerging greenfield opportunities through Box Platform and Box Skills. As we mentioned on our recent earnings call, we expect to deliver more than $1 billion of revenue in FY 2022, and we are already seeing strong progress against this milestone. We are on track to re-accelerate our bookings growth this year, and to re-accelerate our revenue and billings growth next year in FY 2020. While we are seeing more back-end loaded sales, fundamentally, our view of the business hasn't changed.
We are still on track toward the target model that we laid out a couple of years ago, delivering gross margins in the 75% range, driving leverage across all areas of the business, with the biggest improvements expected in sales and marketing. We expect to deliver operating margins north of 10% and free cash flow margins north of 15%. Given all the growth catalysts we've talked about and some of the trends that we are seeing emerging in the business, over the next couple of years, we see a lot to be excited about. As a recap, we are well-positioned to seize the huge cloud content management opportunity in front of us.
We're doing that through a very differentiated product, particularly around our security and compliance capabilities, and from a very differentiated architecture, where having a single content platform enables not just the best-of-breed architectures that customers are increasingly looking to deploy, but also enables some of these newer emerging artificial intelligence use cases that are driving a lot of demand for our various services. We're already seeing this push into solution selling show up in some of the numbers, especially around big deal traction and our add-on product attach rates. From a business model point of view, we've been driving significant leverage in the model, and we also benefit from one of the most predictable models in software. More than 95% of our revenue is recurring.
We see less than 5% customer churn on an annual basis, and even as it relates to our new sales, about two-thirds of those are coming from our existing customers, where we tend to have much stronger pipeline visibility. Today, hopefully, we left you with why we're so confident in Box's future as we scale to $1 billion and beyond. With that, I will call my friends and colleagues back up to the stage. I probably don't need the clicker. You guys mic sharing? Mic share? All right. Hello? Just to clarify, did everybody catch the columns on the blue chart? Everybody was good with which years we were looking at?
Yeah.
Okay. Ella says yes, everybody else says no. Okay, fine. pie chart? It was black on blue, so it was hard to read, which. Yeah. I don't know if we want to roll. On the path to billion slide? Yeah. The rightmost column. When you look at the materials that should be available on our IR website, would be the column to focus on. Happy to address any questions about those columns as well. Okay. Go back.
Over here. Hey, guys. Thanks for the day. Very informative, very helpful. A couple of questions from me. First, can I use my Box bucks next year? I had a little street combat trying to get to the little stand down there in the exhibit hall.
Collecting Box bucks?
Yes. Well, I checked, it doesn't say expire, so I guess that's a good thing.
Treat it like real currency, okay?
All right.
Assume it's expired.
Very good. Dylan, the information you provided was very helpful, and you, Stephanie, as well, kind of putting the two or the comments of both of you together, seeing the expansion in the large deals, as you mentioned, I think it was 29% in 100K deals, and you've talked about the attach rate of products, how that percentage is rising up to the right, and hopefully, that pattern continues. I guess what I'm missing.
In that information is that I have no information about seat growth, right? That's the missing gap here for me. With the lack of that, I'm trying to reconcile your 20% revenue growth with large deal growth, which is larger than 20%, and with attach rates that are growing larger than 20% as well. How should I think about seat growth? Is that not working all that well? It doesn't seem like you're talking about that much, but help me understand what's going well there, what's not going well there, how do you tweak that? Of course, if you can provide exact data on it, that'll be great as well.
Yeah. Maybe I'll start with kind of some of the numbers, then Steph can give some color into, in terms of what we're driving operationally. Just to get a broad sense of things, we haven't broken out the exact seat growth, although we do report the number of paying users that we have in each period. That can be a helpful proxy for how things are going there. What I would say is that over the past few quarters, the total add-on products, which include sales to both existing and new customers, has been about 20%-25% of our total new bookings. If you think about overall, the remainder would be from kind of core seats. If you think about overall, about two-thirds of our new bookings are sold to existing customers and a third to new customers.
That's a high-level breakdown in terms of, you can get a sense, depending on how you think about what the new product attach might be across new and existing customers, should give a decent approximation for what that looks like.
Just in terms of some of the programs that we have undertaken, we're doing a number of things. We've been driving an ELA strategy, for the last few months, as we've gone deeper in our customers and really thinking about how do we go wall to wall, where very clearly there's a tremendous opportunity. We've been sort of getting out there and having these conversations around digital workplace and digital business, and it's fundamentally changing the way they think about us and our ability to actually do this. We're going to continue, we've sort of instituted that, it's going to become part of the DNA of the organization, and we're really going to start to think much broader in terms of the way we actually go out and approach our customers.
Hi, thanks for taking my question, Melissa Franchi from Morgan Stanley. A lot of excitement around Box Skills, that's going to be GA in December. Aaron, can you just remind us the monetization strategy around Box Skills? Is this intended to help drive greater seat growth, and just greater customer acquisition around Box Skills, or are you monetizing that separately?
First of all, it's definitely very early in the monetization kind of strategy, and even what we learned from platform, is three years ago, our pricing model was different than how a lot of customers consume it today. We do treat this as an area of evolution for us. In general, because skills are based on the amount of volume of data that you're pumping through the system, it will likely correspond to the amount of data, and be directionally a consumption-based pricing model. It's important to distinguish that there's the skills framework, which is sort of the volume of data you pump through skills, and then the actual AI service that you're going to leverage, which in some cases might be priced separately by the AI vendor themselves. We're really charging for the skills utilization.
We think about skills, less about as sort of driving the price per seat up in Box and much more about as a catalyst to move more of a company's business processes or content into Box. Yet another sort of death knell or nail in the coffin for legacy ECM systems. For us, we see this just as a massive differentiator versus legacy approaches. Certainly to the extent that we, through customers deploying this, we see more ways that we can monetize, we'll certainly take a look at that. For the most part, what we just want is a mass degree of customers moving content into Box, automating their business processes. We're very, I think, comfortable with even today's price per seat that we're seeing, just at a macro level. Certainly, we see upside in that.
I think what we now want is just as many users and as many use cases on Box as possible.
Hey, guys. Rishi Jaluria, D.A. Davidson. I appreciate all the color here, super helpful. Dylan, quick one for you, and then one for Steph, if I can. Dylan, you brought up the self-service channel. I know in the past you've mentioned that there's been a little bit of challenges on there. Can you give us a sense for what investments and what moves you're making to improve self-service as a channel and kind of drive more new business there? Steph, you brought up the Box Consulting. Can you give us a sense for what's driving demand there and how we should be thinking about Box Consulting at scale, and maybe what an ideal attach would look like relative to core Box? Thanks.
On the self-serve front, I would say that our strategy hasn't really changed versus where we were a year ago, and we did flag that as an area that was underperforming versus our expectations heading into last year. What I would say is that that business is back on track and performing at a much healthier clip and is growing at a decent rate year on year. That doesn't mean that we've changed the strategy or even the investment level into that engine. It is a very highly efficient process, both in terms of driving direct sales as well as from a fulfillment engine point of view. We are seeing that grow, but we haven't shifted or kind of reshifted time, resource into the engine, but have been really pleased with how it's growing.
Where we do see the opportunity, and I mentioned this briefly on the leverage slide, is we've been successful with driving a greater volume of opportunities, even if they are rep credited opportunities, just saying, "Hey, do this online." Maybe it's a customer who is working with a sales rep. They might still get commissions on the deal, but they're able to buy more seats or transact online or even buy additional products that we've increasingly made available online. I would say that what we have done is continue to make that a better and better experience, to have more and more of that customer engagement and those customer actions online, and see opportunity to continue doing that, but wouldn't expect us to reshift our investment strategy toward that part of the business.
In terms of consulting, it's always been this really nice sort of little engine for us at Box. I think it's about, what is it? seven or eight percent of the business?
Under the revenue.
Under 4% of revenue. Tim Shaughnessy , who drives that business for us, he's really built a really pretty compelling set of use cases for our customers. We've been doing more of the traditional services, then there was a crying need for what we introduced as Box Transform, which is really, as we've gone deeper with customers, they've wanted us to really help them think about this sort of transformation journey. We had an opportunity to embed resources into some of our accounts, and really start to help them rethink business processes and workflows and automation and a whole bunch of other things. A couple of great stories, I think there was one of our clients who was on stage today. We had Farmers Insurance up there and Rehan.
We've been doing a tremendous amount of consulting services with Farmers as they've been looking at how to improve the service to their clients. We've been innovating with them, and we've had consultants sort of work through each step of that journey with them. We did a great project and just continuing stage 2 of that with U.S. Forest Service. We've migrated a ridiculous amount of data. We've helped drive adoption more broadly across that entire department. We're doing everything from helping them through transformation, driving education among sort of the end users, IT admin folks, et cetera. Just continuing to also work with Niall's partners. In conjunction with our systems integrators, we're actually working side by side in a whole bunch of engagements, especially in financial services, healthcare, life sciences, and fin services. It's a really neat model for us.
I think we're about 100 consultants now. They're doing a tremendous job. We've been really pleased with the value that they can help as we go sort of deeper with customers. I know, Aaron, you can get passionate about consulting.
I could chew up our next 10 minutes. All I would just say is the reason why we love it so much is, and why it's very strategic for us and why we certainly see it growing over time is, this idea of cloud content management is relatively new because so many customers are used to these disparate content silos and haven't even realized how big of a challenge that is. We have this skill set, which as we know now, all the best practices of what the taxonomy you want for content management. How do you do the change management? How do you integrate Box into all the different system of records that you're using?
We have a skill set now and a set of blueprints effectively that let us do that at a much faster speed and at a way higher success rate than really anybody else they could go to. That's why customers are eating this up. Maybe you could tweet us the question? Okay.
All right. Hello. Hi. Phil Winslow again, Wells Fargo. A question for Aaron. When you describe sort of a blurring of the lines between cloud content management and sync and share, but on a single architecture, a question I get a lot from investors is, does sort of the customer actually think that way? Or are they thinking, "Okay, I need this for my employees for collaboration, and then I'll use this for some sort of workflow application." What are customers saying? What is your pitch to them about, hey, why it's not two individual choices, but sort of one architecture? Just a follow-up for Steph.
I think in general, it'd be good for Jeetu to add anything because he's certainly seen the space. I think in general what we tend to find is, traditionally speaking, you would think of EFSS as end user file sharing and storage. Traditional ECM is really the business process, the governance engine, document management. When you actually expose to the customer their own business process, what they see is, well, my file is hopping between an EFSS system, then it's going into a governance system, then it's being emailed out to the client, then it's going through some kind of custom application.
As soon as you actually show or have the customer sort of experience their own business process through the lens of both the end user and the IT architecture, they realize that actually this is just one business process and it's very dynamic, and you're hopping between different use cases with that same piece of content. What we see, and I think what broad technology industry analysts are starting to identify is that these two worlds actually make sense to combine to some extent or at least overlap in a pretty significant way. Where you have this idea of the digital workplace transformation, which is that end user file sharing, file collaboration, the digital business processes that move content through a business process.
There's usually a space in between, which is really that actual process happening, and that's where things like automations, that's where our third-party integrations come into play. Ultimately, we have to go evangelize this market, and we have to make sure that the ecosystem continues to move in this direction. I think, though, the benefit to the breadth of our strategy is it means we actually have multiple vectors into a customer, which is pretty cool because it means that if the customer is really interested in employee transformation, we're probably going to have a little bit more of a digital workplace story. If the customer is having a customer-facing digital transformation sort of operation happening within their business, then we're probably going to lean a little bit more to digital business.
You actually saw in this panel a multitude of those initial use cases, where on Allstate it's a bit more of a customer-facing trend that they're driving first. In SunTrust, it was both, and in Ameriprise, it started with employees. I think what we're going to see is our ability to go into organizations through either of those vectors, but then ultimately get customers to use the full breadth of the platform.
The only thing I'd add to that is, if you just think about the life cycle of content and how people naturally work. It's currently very unnatural in these legacy systems. You might think about you started creating some content, and then once that content gets created, you might want to go out and share it with some team members internally. After you've actually gotten that to a certain draft stage, a certain final stage, you might want to share it with some customers externally. Once you've gotten it shared with the external customers for some feedback, you might want to publish it. Eventually, there's content that needs to get archived and then eventually disposed.
That entire life cycle, currently, when you go out and look at legacy systems, you might have five or six different systems that you might go through that entire life cycle with. One, it's a really unnatural act, and two, your policy engine doesn't actually apply across that entire life cycle. By definition, you're out of compliance in certain cases, when you move from OneDrive to SharePoint, and then from SharePoint to external team sites. That's actually the structural breakdown that happens in these systems when you have too many of these fractured repositories. You compound on that the fact that they are all pretty closed and don't even work with the ecosystem of vendors that your users might want to work with the content with. It actually compounds the issue even further.
What we do is, given the fact that it's a single platform, and that single platform does everything from security and knowing exactly how to go out and protect your content, have the right policies applied to it, make sure that there's collaboration on it, make sure you can tie into the third-party systems. Now you have automation. There's a huge amount of compounding value that continues to keep accreting.
Got it. A question I guess for the whole team. Steph, if I look at your slides from last year, you had that matrix that you had up there about driving growth, and you talked about the four columns today. One of the things that wasn't discussed in there was packaging, sort of pricing slash packaging. You talked about, Alice did actually at the beginning, of having seven products now. Instead of having everything à la carte, would it actually reduce friction if you went to more of a suite model?
Do you want me to take it?
Oh, I'll take it.
That's all right. I'll take it first and then Jeetu can jump in, because we've been talking about this a lot. One of the reasons why we've been pushing this enterprise license agreement model is because we felt that there was an opportunity for us to do some packaging. That's what we've done, around both digital workplace and digital business. Actually, we have a third package around security specifically that sort of ties the two together.
We have actually been in conversations with a number of clients who've said that to us, and we've said, "Yeah, makes a ton of sense." Having done this for a long time, Jeetu and I, it's sort of a logical progression for us, and we've been thinking as new products come to market and as we think of Shield, as we think of Skills, how do these neatly come together to deliver value at that exponential level? We will definitely continue to do more packaging, and we're going to take direct feedback from customers. As we think about how they want to deploy Box in their environments, it'll ultimately shape the way we look at packaging as we move forward. We're doing some of that right now and getting some really good results.
Yeah. The only thing I'd add over there is, there is value in having the discrete SKUs, because sometimes you might have a security buyer and sometimes you might have a compliance buyer, and sometimes you might have an end user computing buyer, and they might have different kind of budget pools that you can tap into. In a lot of our customers, they're actually starting to see this very holistically, and they're like, "Hey, I just want to make sure that I buy all of the things that are required with Box." Those customers that end up making those investments tend to be stickier, as Dylan mentioned. There's a lot of incentive for us and the customers in making sure that we simplify this on a continued basis. You don't simplify at the expense of taking away the choice of buying it individually.
You just want to make sure that you have some more bundles and packages in place.
Hi, guys. Rob Owens from KeyBanc Capital Markets. Help us understand that given everything you're saying, just the velocity side of the business, and although you don't give a seat count, we can calculate new paid users has been decelerating quite meaningfully. Is this just a function of where you're at as you're trying to move up markets and you expect that to re-accelerate? As we look forward, will more of the growth be explained by increasing user price, or should we expect that seat growth to tick up? If we look at other cloud businesses, and Aaron, your keynote with Todd was great today. They're seeing it on the Okta front, and he thinks that content should be a control point, too. Is this an education problem? Why are we seeing this slowing effect, and what should we think about going forward?
Maybe I'll start with the pure strategic part of the question. If Dylan wants to layer in any other data, feel free to go for it. I think it's a great question. Actually, it's something that we spend a lot of time internally, especially around this packaging of how much emphasis are we putting on add-on products and improving price per seat? How much emphasis are we putting on going enterprise-wide from a seat standpoint? How do we make sure we tune the right balance in our go-to-market engine and our sales force? We have a product that fundamentally is a 100 million-plus seat type of product. We're dissatisfied with the growth rate of those users and what we've done thus far.
I think this is why we're spending a lot of time saying, as Steph brought up, our ELAs as an example. That's just one program as a tactic to say, how do we get customers to go from that land and expand slide that Steph showed, where it took six or seven years to get them to enterprise-wide adoption? How do we do that in two or three years? In some cases, how do we do that right off the bat in that first sale with a customer? This is, I think, one mostly of execution and our execution and how we're telling the story to customers where they don't just think about Box as the tool for their external collaboration.
They don't just think about Box as the tool for the marketing department or the product development team, but truly as sort of an employee right to have a platform to be able to do their work and collaborate in a fully secure way with that content layer. That's, I think, positioning. That's our sales dynamics. That's certainly what we incentivize and what we spend time talking to our customers about. While I don't think we're pointing to any specific numbers, I do expect that Given the re-acceleration that we're driving, you will see that show up on the seat count as well because of the nature of how we're selling and that need to sell enterprise-wide to be able to drive that type of conversation.
Brian Peterson from Raymond James.
Actually, can I say one more thing? I'm sorry.
Go ahead.
Okay. Sorry. The other thing I think that's happening is, I do think that customers are finally. Part of this has been a maturity of the category, and customers are now getting it, and they don't have to be as tepid as they once were. If we look at Ken from SunTrust, that initial deal was, I think, for a very large portion of their end-user population. Five years ago, they would've just tested us out in marketing or product development. They just knew, of course, we're going to offer an end-user application to share and collaborate. Of course, that same set of content is going to plug into our other business systems, so why would we be doing this in pockets of the organization? That's happening with the maturity of the category. Again, we have to respond with our execution. Sorry.
Just a quick clarification for Dylan. You mentioned the re-acceleration next year in growth. I just want to make sure I'm clear. Is that related to the ASC 605 to ASC 605 comparison at 22%, or is that the ASC 606 to ASC 605 at 20%?
That's relative to the 20% comparison. We'll give more color, of course, into that and billings growth and expectations on our Q4 call.
We're out of time anyway.
Oh, okay.
He lost it.
I got more time. Steve Kerr's not for another couple of hours. We got time.
You want to talk Box Consulting?
I'd love to talk about the transformation we're seeing.
G2, yes.
Okay. Steph's like, oh, we got it.
G2.
Okay.
Yes.
Okay. Jeetu's Got to go for the keynote. All right. Thank you so much, fellow panelists, Dylan, Jeetu, Steph. I'll close things up for a second. While we're sitting, I guess.
Yeah.
Okay. We spend probably collectively a few thousand hours rehearsing BoxWorks, but one thing we don't rehearse is how to leave Financial Analyst Day from the stage. That's the one part that we don't practice, I apologize. Let me just say, certainly, hopefully, you have a good sense of what we're doing as a business, how we've been growing. The core of our strategy is this idea of one source of truth for content, building around that. I think as you've seen in the keynotes, hopefully, you were able to catch Jeetu's this morning, the adoption across industry, across geography. This is a fairly U.S.-centric conference just by the nature of where we house it, we're seeing this across the board. As Steph mentioned, seeing Japan growth be pretty incredible.
EMEA, while in some regions we still have some work to do, we are seeing some pretty solid adoption. The trends that we're seeing, I think represented by the customers that you saw on stage today here early in the day, I think are becoming broader and broader. We have more work to do to make sure that the rest of the world sees this and is adopting Box in an enterprise-wide fashion. I think we're seeing the signs of that execution come together. We called out at the beginning of this year that this was going to be a year where we were evolving that sales motion. We wanted to make sure we were doing more solution selling, more enterprise-wide selling, more add-on product selling. That evolution, I think we're seeing some really great early signs of it.
We do see the re-acceleration that we talked about and that commitment to the FY 2022 billion-dollar full-year number. Although, I know that there was some questions about the precision of that run rate, that's just something that we feel like is still a couple of years out, there are different dynamics in terms of add-on product rates, solution selling. We want to get a little bit more focused on the full-year number. We're seeing some pretty incredible early signs and, certainly in the back half of this year, very confident in the growth that we're seeing will continue. Just wanted to say thanks again for coming out to the event and learning more about the business. Also, if you have a cell phone, many of you do in this room, please donate. We have some great nonprofit partners that are part of this event.
We'd love you to support what they're up to. Hopefully, see you. I don't think we have a slide. Do we know the number?
No.
It's 56882, and just text Box, and then it'll get you to a link. We've got three different causes that we talked about, and you can put in anything from $1 on north.
Some of you have more than $1, I know. I do think that we do have some great organizations, International Rescue Committee, Black Girls CODE, which is doing some amazing work on improving the diversity of the tech pipeline, which is obviously well needed in the industry, so. SIs, which is a great organization. Really appreciate the support of that, and then we'll see you throughout the event. Maybe if you're coming to our Big Boi concert tonight, he's half of OutKast, for those of you who are familiar with OutKast, the great musical group, and we'll see you there.
Who's not familiar with OutKast?
Everybody is, so we're good. Everybody's very familiar, like G2.