Box has acquired dLoop, a startup that provides ways for IT administrators to control access to content with finer granularity. The acquisition will give Box a level of data analytics that is often a required feature for enterprise customers. Terms of the deal were not disclosed.

According to the company blog, joining Box from dLoop is its co-founder Divya Jain, who is now leading the company’s advanced content analysis and data-classification efforts. Co-Founder Anurag Maunder is not mentioned in the Box post. Maunder, according to AngelList, was one of the co-founders at Kazeon, an e-discovery software company acquired by EMC in 2009, where Jain also worked. The company had five employees before the acquisition.

dLoop will make it easier to discover content on a network that might be ordinarily difficult to find. It’s in some respects comparable to Autonomy, which discovers relevant content that traditional search would not find. For example, there is often server-wide data that can’t be found with full-text search, said Sam Schillace, SVP of Engineering at Box, in an email interview.

“We’ve been spending a lot of time improving the end user experience on Box, but we’re equally committed to creating better management tools for enterprise IT,” Schiller said continued. “This means unlocking greater visibility into the activities happening around information, and providing more granular controls where necessary. dLoop’s machine learning capabilities will ultimately allow Box to help enterprise customers identify and surface relevant content by tracking activity patterns – something that’s critical when deployments are in the tens of thousands of seats. And we are committed to doing all this without compromising user experience.”

In larger enterprises, data classification is becoming a must-have in order to control what people can do with files. Companies want policy-based file sharing. Box has made considerable effort to enhance its security. Alan Lepofsky, an analyst with Constellation Research, told me that neither Dropbox nor ShareFile, which is owned by Citrix, have content classification or the workflow rules engine that allows administrators to have granular control.

“There’s a huge need for both unstructured data analytics and securing that content,” said Constellation Founder Ray Wang. “It’s something IBM’s done for years in FileNet and a key requirement for financial services, government agencies and defense contractors.”

The offering does help Box compete for large enterprise customers, but going down the checklist, it is still pretty much on par with the competitors and a bit ahead of Dropbox:

The major file sharing players provide similar check-box lists of security features including: sign on, encryption (AES 256-bit encryption), data center (SSAE 16 audited), etc. Box is HIPAA complaint, where DropBox is not.

One issue that Box faces is its cloud-only capability. The policy-based file access and e-discovery features will not address all of an enterprise’s needs since a large amount of files will always remain on-premises – especially with PRISM and other related concerns. In comparison, services like Egnyte, which is a Box competitor, provides a service that stores documents in a cloud environment with the file appearing on the desktop with shared and private folders.

(Feature image courtesy of Kathleen Franklin on Flickr via a Creative Commons license.)