Box, a cloud storage provider, today announced Box.org, an effort to offer free and discounted products to nonprofit and development organizations. It's a simple plan: 10 free licenses per group, and then 50 percent discounted service above that point. Box, which has gross margins of 79 percent as reported in its recent financial filings, can afford the discount. Also, presumably, as Box later expands its product mix, organizations that it brought on with the promise of cheap storage will be enticed to spend more. Box offering a free tier and cheaper service to nonprofits is a nice thing to do. But there is an inherent profit motive behind the effort: Large aid organizations, for example, aren't famous for their bureaucratic maneuverability. Thus, groups that Box gets onto its service will likely stay put. As cloud storage itself commoditizes and the editing stack atop stored files becomes increasingly important, firms like Box want to lock in many-seat organizations that they can upsell into for years to come. So, Box.org is at once a neat act, and a decent strategic move. It also absolves Box of some of its share of the lingering guilt ascribed to technology companies as agents of aggressive change to the Bay Area. Box has filed to go public, looking to raise $250 million in its flotation. Market conditions have recently deteriorated, leaving its offering and others in a holding pattern of sorts. The company's aggressive GAAP losses and presumed spiking ARR have put the company in an interesting spot: Do the accounting preferences of SaaS firms render GAAP losses in the short term irrelevant? For now Box marches on with a new charitable offering.
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