Box CEO Aaron Levy

Corporate file sharing powerhouse Box Inc. stepped up its efforts to reach vertical markets last week by announcing plans to acquire MedXT Inc., a little-known startup with a service for sharing medical data. No financial terms were disclosed.

MedXT is the second graduate of the prestigious Y Combinator accelerator to have been picked up by Box in the last six months. The enterprise file-sharing company previously bought out Streem Inc., which had cooked up a technology that makes it possible to access content from the cloud and sync files without having to store any data locally on a permanent basis. But while that deal, the terms of which were not disclosed either, was aimed at adding functionality that can appeal to the Box user base as a whole, the purchase of MedXT takes aim at the specific requirements of customers in the healthcare sector.

The move is part of the Box for Industries strategy that the cloud sharing provider officially introduced at its annual user conference in September and that it has been quietly pursuing for the last several years through its partner ecosystem. The medical industry plays an especially large part in that plan due to its need for tight security controls and the substantial investments being made there thanks to government incentives.

MedXT offers to help with a managed service built specifically for sharing and viewing medical images, which are especially difficult to manage due to their file size. The ability to securely make X-ray photos available where and when they are needed is especially important in view of the fact that some 90 percent of American hospitals outsource radiology operations, often to firms in foreign countries such as India. And handling patient data is already complicated enough when it doesn’t leave its home jurisdiction.

Box will need to be extra mindful of regulatory compliance in order to realize a return on its latest buy. But that shouldn’t prove too big of an obstacle for the firm given that its service is already HIPAA-compliant and that MedXT’s offering has been cleared for use in hospitals by the FDA. The bigger challenge will be to avoid alienating partners, which play a critical role in Box’s vertical expansion strategy, as it adds more industry-specific functionality, potentially through the acquisition of niche players like MedXT. That will require a delicate balancing act for the firm’s 27-year-old CEO, Aaron Levy.