Box hires big US government IT officer

Box just made a big move inside the Beltway.

The enterprise cloud storage company said Thursday it has hired Sonny Hashmi, a longtime veteran in the federal information technology space. Most recently, Hashmi was chief information officer for the U.S. General Services Administration.

Hashmi will lead Box's efforts to persuade federal agencies to move to Box's platform. The company already boasts more than 40 customers in this sector, but Box clearly sees a significant opportunity to expand.

Aaron Levie, CEO of Box, speaks during the BoxWorks 'How Tomorrow Works' event in San Francisco, California.
David Paul Morris | Bloomberg | Getty Images
Aaron Levie, CEO of Box, speaks during the BoxWorks 'How Tomorrow Works' event in San Francisco, California.

"The federal government has made significant moves toward deploying cloud systems, consolidating data centers and reducing redundancy in government IT, driving more efficiency and better collaboration," Box CEO Aaron Levie said in a statement.

"We are excited to continue to support and accelerate these major trends, and Sonny's innovative leadership is just what the industry needs to accelerate the adoption of cloud and mobile technologies."

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For Box, the deeper push into the federal government reflects a broader strategic shift. The company's key product remains online software that allows companies to save and share digital files on any device—desktop, tablet or smartphone.

But Box is working hard to expand into new areas of modern corporate technology. Specifically, Box aims to offer high-value solutions tailored to certain industries such as financial services, retail and health care.

For instance, Box acquired a company called MedXT last fall. Its cloud-based technology allows health professionals to view, share and collaborate on medical images. Box's clients in the sector now include Stanford Medicine as well as GlaxoSmithKline and Boston Scientific.

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The financial opportunities for Box in federal government are obvious—federal government IT spending is $90 billion per year—but there are real challenges, including serious competition.

Established players such as Microsoft and EMC already offer solutions to the federal government, as do start-ups like San Francisco-based Huddle, which provides a platform allowing workers to store, share and collaborate on content. Its clients include NASA and the Department of Defense.

Levie isn't discouraged by that competition, however, and believes that hiring tested Washington players like Hashmi will help the company drive its momentum and growth in the public sector.

Now Box needs to deliver superior products, win over Uncle Sam, and excite investors. Box's stock fell hard after its last earnings report due to guidance that disappointed Wall Street, though it's still up more than 20 percent since its IPO in January.