 Everyone, I'm John Furrier with Silicon Angle and theCUBE. We are here on the ground in Palo Alto, in our Palo Alto offices for a CUBE conversation with Noam Shendar, COO of Zidara Storage, to talk about what's going on with his company in the industry doing really, really well and want to get his take on what's going on in the cloud with storage and really drill down on their success and why they're successful. So welcome to this CUBE conversation. Thank you, Jeff. So tell us, what's going on with the company? You guys have an interesting story. You kind of been moving the ball down the field but all of a sudden, it's just a home run right now. You guys are really doing well as a company with sales, customer support and all this dev that's going on. And cloud's in the picture. So how does cloud and storage fit into this? Because you guys just creeping up on the market and all of a sudden it's floating and growing. Give us the update. We would love to thank you. That we started the company about four years ago, a little more, we just sent out a thank you email to all our customers for our fourth anniversary. And we started on the premise that customers want good storage regardless of where it is. In other words, they love the cloud business model but they don't necessarily want to and in many cases cannot compromise the capabilities of the storage just because of the convenience of cloud. So we said from the beginning, you can have it all. You can have great storage with all the reliability, performance, features, everything they're used to from traditional on-premises storage but you can have it in the cloud. And that was about our first two years and that went extremely well. We worked and still work with Amazon Web Services, Microsoft Azure and many other providers around the globe and they bring their most difficult, most demanding customers to us because those customers say, we will not compromise. We must have these features and that's what we provide with a cloud business model. And then about the middle of last year at VMworld, we announced, by the way, people, you can have exactly the same thing on-premises with the same business model. So not only did we bring good storage to the cloud, we brought the cloud into the on-premises storage market. It's interesting that we always talk about Amazon and Andy Jazz, who's one of our favorite tech athletes has a unique approach and that's proving out to be the good call. People know you guys from your Amazon relationship but now with this on-prem thing, things are exploding. But the storage market's interesting. People know about EMC, NetApps and the big guys and it's one of those markets where it's just hard to bring the storage and connect and get your arms around, your mind around, okay, how does storage actually work with the cloud? So you guys took that vector in from the cloud side with Amazon, now on the on-prem. So what is the number one standard thing that you hear from customers on why you're winning? I mean, why is that such a big deal? On-prem sounds hard to do. Is it hard to do? And why is it important right now? What are some of the things customers are saying? Great question. The one very interesting thing is that with a single product, we answer two very different questions. We answer the limitations of storage in the cloud and the limitations of storage on-premises and those are different limitations. So we find it very curious that we solve both at the same time. It's obviously by design. In the cloud, the problem is I need San and NetApps. I have applications, they require those things. I either won't or can't rewrite them. They may be shrink-wrapped applications. There may be applications that are working well and I don't want to risk re-architecting them or rewriting them. So I would like to move them to the cloud. Let's say to Amazon Web Services or to Microsoft Azure or any of the many other good providers around the world. But I want to move the application as is because it's quick and it's safe and it's cost-effective. So we answer that question. Storage just like I'm used to on-premises with all the features, the protocols, the speed, reliability, you name it. It has it all, but it's inside the major public clouds. So that's the main reason why customers pick us. They need good San and NetApps by the hour connected with high speed and low latency to the main clouds. Yeah, so one of the things we hear a lot from customers, obviously with Wikibon, our research team and through Cube is companies like Dropbox and Box just went public. They're not being received well in the enterprise. I mean, they do, they get in from Shadow IT and they'll claim, they'll yell at me for this, but they don't really have penetration in the enterprise. What I call pure enterprise. That's a hard game, hard nut to crack. So I really want you to talk about what does it mean to be enterprise class storage as a service? Because Box is storage as a service in a collaborative way, but they're rewriting their backend to kind of be more enterprise like, which is a hard nut to crack. You guys have this enterprise class storage as a service. What does that mean, truly? Great, another great question. And really that's what differentiates us. So we call our category enterprise storage as a service and it's largely a category of one these days. And the way we define it is it's the storage that runs your enterprise applications. You may have databases, you may have ERP applications like SAP, you may have your proprietary applications you built in-house for your logging, for your compliance. Whatever it is, you have applications today on premises that run on Santana's devices from the likes of EMC and that up and so forth. And you are hurting in the sense that you're, let's say for the reason that Amazon is succeeding is because of the pain of traditional IT. You pay for it up front, you have to plan your purchase for a long time and you need to live with what you bought for many, many years. And that's not flexible, it's not agile. It actually can prevent a company from reacting to changes in the marketplace. That's why cloud in general is succeeding. So companies are seeing that, they're learning that this could be a better way to compete. And then they run into this problem that well I have this package, let's say it's SAP and I would like to take my SAP with my existing licenses and just run it at Amazon or Azure, et cetera. But I can't because it needs, let's say it needs file-based storage, it needs a NAS. Well there isn't the NAS there. So now the standard answer, the purest answer is well just rewrite it. Just take the application and rewrite it for cloud. But that's nice. And why is it not just too difficult, right? Yeah, it's risky difficult and time consuming. It's a trifecta of badness, right? So why would I do all of that if I could just take it, move it like it is, and I know that it'll work because the environment in the cloud is going to be the same. The compute is the same, it's Intel processors and it's the same hypervisors that I use on premises and the same operating systems for Microsoft or Linux flavor that I use on premises. So that's the same. The network's the same. It's an ethernet or TCPIP network with IPv4 addresses. So why can't the storage be the same? Why did the cloud providers do a great job with computer networking and then skim on the storage? And so that's where we come in and we complete that triangle so that everything is the same. So triangle of goodness. So really we always talk about in the cube of this shift and inflection point thing happening because they're both happening at the same time you're seeing a shift and an inflection point and I really want to break it down into two areas. One is the technology and the architectural approach or the tech or the solution and then the economics. Cloud always is a disruptor in economics and Amazon's proven that. Race to zero really doesn't mean anything when value shifts to the other side of the equation. So let's, before we get to the economics on how people consume the service and the product, the storage is essential. Let's talk about the technology. So explain to me the topology of the solution because if you're a service on prem that there's a physical component that you're hosted in the data center or on prem or Colo. And then how does that connect to Amazon? Say direct connect or Azure express route. Great, so again we're a one product company. So whether we deliver our service on premises or in the cloud it's exactly the same. So we don't have two versions, we have a single version. That's very important for efficiency, for support, for quality assurance and also for interoperability between the two environments. So the way that we did this, so we started the company over four years ago now and we looked first at the requirements and the requirements were how do we create a flexible on-demand San Inez solution? How do we do EMC like NetApp like by the hour? And so the first thing we looked at well can the existing devices be adapted to provide this? And the answer is no for many reasons but to oversimplify they weren't built for this. They weren't built to be flexible, they weren't built to be multi-tenant and they weren't built to be remotely installed and deployed. I'll come back to this point because the remote operations are a very, very critical piece of what we do. So we had to build from scratch and looking at cloud architectures it was clear from the beginning this needs to be commodity hardware. So since before the term software defined storage existed we were doing software defined storage because it's the only thing that made sense. Take the most cost effective mass produced hardware and introduce the smarts and the reliability via pure software so that we'd never have to do anything with hardware other than purchase it. Awesome, awesome. So what about the physical and the service? So one product, I get that. What does that mean for me as the user or the customer in managing cloud? Because I might have workloads that might span multiple clouds. I mean this is an issue like multiple clouds. How do you guys solve that? Do you use it transparent to me as the buyer? We do solve it and it's not transparent to you but in a good way. You have full control of every bit that you own in terms of where it resides down to an individual spindle. So you can decide I want this data to be at Amazon web services US East in Northern Virginia and I want it inside this virtual LAN that's mine. So that's the level of control and if you want it replicated to here just to Northern California region for AWS which is in San Jose, you can do that. But if you don't- So you can replicate between the clouds? We can replicate anywhere to anywhere which means same cloud multiple regions, cloud to cloud, on-premises to cloud, backwards, cloud to on-premises, on-premises to on-premises and also point to multi-point. I can have a data set and have it replicated multiple times. So is that a feature of the product or is that a labor issue? In terms of people having to manage it. No, it's a feature. Actually, so to the point of labor this product is designed to be incredibly efficient from an operational perspective. The reason that that's important is that we operate the product. We're the ones who guarantee the uptime to the customer both on-premises and in the cloud. In the cloud this goes without saying, right? You buy cloud because it's somebody else's problem to keep the product up. But on-premises we do the same thing. So our customers tell us you saved us hires. There are people we didn't have to hire because you're operating the product. So you do turn key for them both as a technology and as a service. We do. All right, so let's get to the economics. This is the rubbery throw, where the cash comes in. So how do you guys differentiate against this traditional storage? Because the old way was, or the current way is, okay, buy storage, EMC will bring a bowload of, back the truck in, drop off some drives, NetApp, whatnot, even pure storage, or what, and these guys come in and they got a provision storage. That could take months. Yes. What's your approach and has a differing compete against that? Sure. Challenges with the traditional model are that it's expensive. It's an upfront model. It requires a lot of planning. It's capex, so you're stuck with it for a long term. And once you buy it, which is a multi-multi-multi-month process, that the work only starts at that point. You have to TLC that device for the rest of its useful life. And we address all of these at the same time. So, and again by design. We looked at the problems and we said we are in a position to, not just alleviate, but eliminate those problems. So, from an economic perspective, your upfront cost is zero, literally. No joke, you get your on-premises storage delivered to you and you haven't yet spent the penny. What you pay for is... So that's an Amazon model. You pay by the drink or by the metering it or by usage. Exactly, except we bring it out premises. We do it at Amazon, which makes sense, but the counterintuitive piece is we can do the same and we do do the same. So, why is this different than leasing, for instance? Why does lease drive the same off-ex thing? Yeah, very common question. We actually have a list of about 10 differences versus leasing, but there are probably only two really critical ones. One is the flexibility. With the lease, you have a long-term commitment at best it's two years, but usually it's multi. Because it's cheaper, you would choose three, four, five years for a lease. We only ask for a six-month commitment. Second is the quantity that you purchase can be very small. The so-called flex leases require a large base capacity, and then you have some flexibility above that. We say, no, you don't know what you need a year or two out. So, only tell us what you need now. We'll deliver that, maybe with a little extra, but you don't pay for the little extra. Only pay for what you actually use and you have the freedom to go up and down. So, I had a six-month commitment, and my risk is, okay, I get six months, it's not a, this is a small risk, but I only pay for what I use. Yes. And you guys take care of everything. Exactly, we remotely operate it, we insure the opt-time, we give you the 100% data availability SLA. So, you not only do you know that we stand behind it, but there are penalties to us if we don't live up to that SLA. So, and what it means to you is you consume it just like you would cloud storage. So, you get the benefit of the storage without the headaches that come along with it. I remember I interviewed the VP of Engineering Facebook, this is back in 2009, they were growing so fast. They were so agnostic on what they bought, it was so much demand for the engineers, the DevOps guys to just bring in provisioned stuff. In a way, that was the model then, but that's the enterprise is becoming more like Facebook. They want to do that there. There's a lot of app development, they need storage. So, in that case, do you guys appeal to that in the sense of it's okay, it's not CapEx, that's an advantage. And two, the speed is a value. Is that similar concept? Absolutely, agility is king now. And very early on, we published a piece on software-defined storage. We did it when suddenly everybody claimed to be software-defined. Everything's software-defined storage now. So we begged to differ and said, and we said the key criterion is not architectural and not the processor, it's not hypervisor, none of that. It's does the product confer agility on the customer? Is the customer more flexible thanks to the product? If so, yes. Then it qualifies the software-defined storage. If it's not, if the customer is as shackled as he or she was before, then I don't care how it was architected, it's not doing its job. Well, there are some table stakes issues though, you mentioned the replication. There are some things architecturally, and from a product standpoint that are table stakes, what are those table stakes? And how does that relate to the trend that everyone wants to go to, which is cloud-based? That's in, the table stakes are what we call the full enterprise feature set. So it's snapshots, it's a remote replication, it's thin provisioning, it's encryption. So all of those things have to be there and they're not negotiable for reasons of data availability, data. It's security all in nine yards. Exactly. So those have to be there. And if you look at the main services coming from the large providers, by the way, the large providers are the best in class. So by definition, others are behind the large providers, they're not that. They lack one or more of those. In fact, we help those cloud providers by providing them sort of a sales guide sheet that says if your customer says they need any of these things on this list, then please call us because you're not in a position to provide those things. So I was just checking on Twitter here with talking to Stu Miniman. You guys have a campaign called Stop Buying Storage, hashtag Stop Buying Storage. So we should definitely get a crowd check going on this immediately. But that's a conversation you guys are starting and you want people to join. Let's use that to pivot to economics and customer attraction. Stop Buying Storage, I'll say you are storage. So your storage is a service. So you're going to take that storage problem off the hands of your customers. Talk about the growth, revenue, what's going on with your customer interactions. What's the use case? What's some of the times to close the business and why are you winning? Great, so we are pleasantly surprised by the uptake of the product. And you can imagine as the entrepreneurs here, we were optimistic to begin with but our best predictions are consistently month, literally month in and month out are being outstripped by reality. And the reason is that we've hit a chord with this approach, which is don't own the storage. Make it somebody else's problem, in this case. Make it our problem and focus on your business. So from an economics perspective, we save the customer cost at every step at $0 upfront, so they already saved money. And the longer they keep the storage, the more they save because of the operational savings that they get every day. In terms of traction, we... So I heard an example, Stu Miniman at Wikibon was saying, you guys have this hibernate service. He was excited about it. What does that mean? It means you don't pay for what you use. So like over the weekend, for instance, like over holidays. So yeah. Can you describe, is that something that you guys are talking about? Yeah, so the philosophy behind the whole product is you can't make a mistake. It's so flexible that you can never paint yourself into a corner. So the hibernate feature fits right into that. Hey, I got all this capacity and I have what we call the Zadara engines in front of it, but the Zadara engines are only useful if I'm accessing the data. If I'm not accessing the data, why am I paying for the engines? So we tell the customer, are you right? And here's your button that you press when you press hibernate, the engines shut down. You stop paying for them. You only pay for the capacity. So the data's still there. It's safe. It's protected, but you can't access it until you reactivate your engines. Okay, so I gotta ask the hard question. The hard question is, yeah, we've heard this with Amazon and once you get to a certain point, it doesn't make sense to stay in the Amazon because you can build out your own data center and do all that stuff. How does that relate to you guys? Is there a point where someone will say, hey, it works now, but is there a threshold or is that an irrelevant argument? We think it's irrelevant. The efficiencies that we bring to the table mean that the more the customer uses us, the more they say it. The argument against the cloud in terms of scale says, well, if you get to a certain scale, it's cheaper to buy it yourself. But that's a CAPEX-based argument. Yes, it's true that if you're a big enough company, you can buy the hardware for less money. But the hardware's not where the cost is, especially with software-defined storage. You're buying servers that are made in the tens of millions of dollars, sorry, tens of millions of units per year. But the issue is OPEX. We have customers, I'll give you a real-world example. The customer bars in northern Minnesota called Farm Intelligence have a fascinating business model. They fly these drones over soybean fields, take measurements, and then provide, in real time, to the farmers very, very detailed recommendations. Where do water more? Where do water less? Where to, if they're not organic, where to spray, and so on and so forth. So they generate a ton of data, about 10 terabytes of new data per week during the growing season. And they told us, and they told the world, thanks to Zadara, we didn't have to hire three IT people. That's three salaries that they can take and now spend on data scientists, which is their business. They make money off of the data scientists. There's a huge cost on labor savings, no doubt. Amazon has proven that. We've experienced with our Hadoop cluster, we moved it all to Amazon. I saved three admins, system admins, which are our dire. So similar dynamic, right? Yes. Okay, the role of store. Okay, talk about the growth now. If it takes seven to nine months to procure huge storage provisioning, what's the uptake for you guys? How fast are you guys in and out? It again stripped our rosiest expectations. We close deals even on premises from two weeks to six weeks. So six week is a long, a long term deal for us. And the reason is that it's very easy to say, yes, no cost upfront, you can back out in six months. Obviously in the cloud, you can back out in one hour. But even on premises in six months, you can say, I'm done, take it all back, I'm not paying anyone. So it's easy to get a pilot going. It's very easy. The customer can get some data. Yes. That is the land and expand business model of SAS, which has been a great thing on the application side. We've seen huge success there. So you guys are landing and expanding with a storage business model. Exactly. And no one does that. No one else does it. And the testament to how compelling this is, is the growth. So we've, the most recent quarter, the December 31st quarter, was our eighth quarter in a row of 50% or better quarter on quarter growth. And we're no longer with small numbers. We're talking real money. Great, we're getting the hook here. So I want to give you the final word. Tell the customers out there watching or folks that you want to engage with what you guys are all about, how do they get in touch with you, and why should they work with you guys? Excellent. So we are enterprise storage as a service, which means the storage that you want. It's fast, it's reliable, but it's also highly flexible, easy to procure, and you can't make a mistake. You can grow it, shrink it, cancel it as you see fit to find us either email sales at zadarstorage.com or go to our website zadarstorage.com or Twitter at zadarstorage. OK, you're watching Cube Conversation here in Palo Alto. I'm John Furrier with SiliconANGLE and theCUBE. Thanks for watching.