Box revises platform pricing to ease developer adoption

The new scheme is supposed to provide additional cost stability for buyers

Box is trying to give developers who want to use its platform more pricing consistency with a new  announced Tuesday.

Customers will now pay on the basis of how much active use they're getting out of the Box Platform, which offers cloud storage and content management capabilities for third-party applications. Companies can purchase packages from Box that include a set number of active users, API calls, bandwidth, and storage use.

The first package costs US$500 per month and includes 100 monthly active users, 175,000 Box API calls, 125GB of bandwidth, and 125GB of storage in Box's cloud. The more packages companies purchase, the less they have to pay per package. For developers just getting started with the platform, there's a free tier that allows 10 monthly active users, 15,000 API calls, 10GB of bandwidth, and 10GB of storage.

Box will also let businesses set up longer-term contracts and average out their expected usage, which can help companies lock in lower prices than buying on demand.

When the Platform launched, developers were charged based on the number of registered users signed up. If those users were idle, it didn't matter: Companies still had to pay. That ruled out lots of customers who would have otherwise become Platform users, according to Box chief strategy officer Jeetu Patel.

"Even if you have a very low unit cost per app user, but charge by provisioned user, you leave out some of those customers because it becomes prohibitive for them from a cost standpoint," Patel said.

By changing its pricing model, Box will open its platform up to those users and also provide additional pricing stability for companies thinking about purchasing access. The new model is a welcome change, according to Holger Mueller, a vice president and principal analyst at Constellation Research.

"I think it's overdue, it's good to see, and I think it will help them with much more consumption of Box Platform services," he said.

Customers who are purchasing Platform access on an annual basis will set out their expected usage at the start of their contract, and won't have to pay more, even if their average usage goes slightly over the agreed usage. Massive overages will incur additional charges. The following year, a company's average usage will become the basis for its new contract.

For example, if a business estimated that it would have an average of 50,000 active Platform users, and ended up with 52,000, it would get billed based on an average of 52,000 users for the following year.

The company launched Box Platform last year in an attempt to pick up business from independent software developers, in addition to its existing work as an enterprise content services and cloud storage provider. Using Box Platform provides developers with features like access controls and security certifications, so they don’t have to build that functionality in-house.

Platforms of this sort are fairly new to the market, and it’s unclear if Box's offering will find broad adoption. One benefit to the company, according to Mueller, is that the Platform business provides an additional use for existing compute and storage infrastructure Box has provisioned.

Box’s pricing change is part of a broader trend among cloud technology companies to provide additional pricing stability for resources that were traditionally sold on demand. For example, Google Cloud Platform recently unveiled a new offer that lets customers reserve compute capacity in exchange for discounts, while Amazon Web Services changed its own reserved capacity offering to offer additional flexibility.

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Blair Hanley Frank

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