 Live from the Mendeley Bay Convention Center in Las Vegas. It's theCUBE, covering VMworld 2016. Brought to you by VMware and its ecosystem sponsors. Welcome back everyone. We're live here in Las Vegas for VMworld 2016. This is SiliconANGLE Media's theCUBE. It's our flagship program. We go out to the events and extract the signal from noise. Our seventh year at VMworld and I'm John Furrier, founder of SiliconANGLE. And I'm here with John Troyer, my co-host, CEO of Tech Reckoning. This is the first year we're going into the community and going and getting co-hosts who know the material or who are in the community and help us analyze and break down all the coverage. And I'm here with our next guest, Nelson Nahum, who's the CEO of Zidara Storage. Welcome back. Great to see you. Yeah, great to see you too. I'm really excited that you're here today because you guys make a product. Cloud storage, I'm not saying a cloud storage, but storage for the cloud that essentially is kind of the same position as the Mware's talking about, you know, multiple clouds, anywhere, anytime, workloads. So let's get into it. But you're shipping your product. I like... You have a quick update on Zidara. Yeah, so I like the presentation from Pat because he was saying in 2020 what is going to happen, but we are doing this today and we took a really good position in the market and especially in storage as a service, enterprise storage as a service, either public cloud, private cloud, but consumption, pure consumption, zero capex, actually lowering the OPEX of the system. You guys have an interesting solution. We talked about it last time on theCUBE. You can go to youtube.com, so I'll still get an angle and check out the last interviews, but I want you to take a minute, Nelson, to explain quickly what you guys do and why it's so relevant right now. Yeah, again, we do enterprise storage as a service and when we say enterprise storage is primary and secondary storage with the same capabilities that you will find in traditional storage arrays, but because it's coming from a multi-tenant cloud, this can be provisioned as a service in one minute, customer pay only for the usage and we can do this in either the public cloud, we are connected to Amazon and Azure, we can do in private cloud, that means we ship the equipment to the customer data center, customer don't need to pay for the storage up front, don't need to pay the equipment, we manage everything remotely, customer only use the storage. It's true cloud, buy as you go, literally, or rent as you go. Yeah, exactly, and it's not only just the financing model, it's also the management that we do, the customer don't need to understand about Zadara, they just need to mount the storage, either block storage or file or object, whatever protocol they want and use it. So which clouds are you not on? You're on, you mentioned too that, obviously the big two, Amazon Web Services and Azure, what else, are you on Google, are you on other clouds? So we are also partnered with many service providers and cloud providers that has our system in place, like Korea Telecom, we have equinics in Europe, dimension data is using our system and we're selling this to our customers. We are not currently present in, from the major clouds, only Google and IBM and actually we're talking to Google about connecting our cloud to that cloud. So basically once you basically certify, I'm going to use the word loosely, once you basically approve a connection and it's a relationship, then you're off to the race, is that how it works? Yeah, exactly, so and the main idea is that the customer put the data in our storage, they can use via the compute in the public cloud, they can use in the private cloud and they can replicate and move data easily between private and public as well. So where do you fit in with VMware now? I mean, VMware, you're here, all your customers are here, I mean, is there a specific, because they don't have a cloud? Well, we have many customers on-premise that use us with the VMware environment. VMware environment, we have service providers and cloud providers that use VMware in their environment and we connect our cloud storage into VMware and we support all the SRM and all the... So there's more of an on-premise scenario here on the show? Here is more for on-premise solution, but still at the end of the day, the customer pay per use, so it's still the same product. I'm interested in the practitioner angle. So we're here at VMworld, 23,000 folks who I guess you could safely say are kind of traditional IT, traditional enterprise applications and they have a certain skill set. They're used to a sand, they're used to a NAS, they're used to now more direct attached storage and VSAN. Is there a skills, a set of skills that they're going to have to learn to be able to use Zodara in a multi-cloud environment? Well, we provide also the management for our system. So we manage the system for the customer, even if it is on-premise. They don't need to manage our system. So this is part of the capabilities of the advantage of using Zodara is because they can free up their time to work on more strategic things. They can free up their money of the capex to build our stuff. They can free up the time of the people to work on our stuff, deliver the application, things that are more critical for the customer. Because you're delivering it as a service. Because we are delivering it as a service. They don't need to deal with software upgrades and firmware upgrades and how to configure this, how to configure that. We are doing this for the customer. But I can still think of it as a file store in the cloud that I can use. You think, the customer think about us as a mount point of NFS or CIFS or block storage. We support the iSCSI fiber channel, we support S3. Something simple, something I already know. You just get fed. It's very, very easy to use in our system. Look very much like a sand or an ash system from the customer perspective. The only difference is coming from a distributed multi-tenant cloud and we do a really good job of separating the tenants between them and the workloads. So they feel that they have the SLA of enterprise storage capability. In your customer base, how are you seeing people, we're here at VMware again, so vSphere usage. Obviously, if you're up on AWS, you're not using vSphere. Are people running multiple hypervisors, your customers? Or how are they approaching this new cloud world? Great question. So today, actually, we did a press release of one of our big customers we have that is I think the largest university in Holland. They actually were traditional IT and they were looking for traditional storage for traditional IT until they found us and they said, oh, I don't need to spend a million dollar that I have ready to go and I don't need to do any management or anything like that. They still have a big VMware environment. They have exchange. They have all the traditional applications, if you wish. But now, we provide this as a service, the storage as a service. They save a lot of money in CapEx. They save OpEx because they don't need to be dealing with the storage all the time. And they're just using as they will use a traditional storage. Where's the break points now? First, we'll get to the inside the customer environment. Quickly, talk about how many customers you have. What's some of the traction numbers? Can you share any data on the company's success? I mean, it's a new model. I'm assuming it's appealing. Yeah, so sometimes I'm surprised with the kind of customer we have. We have some good use cases in the website, public use cases like Deloitte, for example, or this two university and we have like a dozen of really good use cases. They are big enterprises that using our system storage, I've been in storage for many years, as you know. And our people are very conservative when they go to something new. But tell us some of the numbers. Like how big is the, are you going to a petabyte scale? I mean, what's some of the usage? So in terms of numbers, we are today about 25 petabytes a year growing 25 petabytes a year. We, in terms of our gross in revenue, the Q2, we did 30% growth compared to Q1. 25% to Q4. So we are in the monthly growth time as opposed to year over year. Do customers get worried that, you know, they use you and then all of a sudden they're using a lot of storage? Is there a break even? Is there a big bar in terms of their benefit? I mean, at what level do they say, well, I should buy my own storage or is that not an issue at this point? I think that if you take in the analysis also the resources that you say by not managing the storage. At the end of the day, we have a TCO calculator that show that we are always better than buying storage from day one even to year 10, okay? Because you need to take in account that you don't need to manage the storage. You don't need to migrate the storage from every four or five years. We have in our cloud system, we can ship new hardware to the customer. We have all the tools to rebalance the cloud, remove the old hardware because it is as a service and we are responsible for the hardware. We have an interest in having the best hardware possible all the time. We have the up time. Recovery, not a problem. Not right. So there's no such a thing as migration and things like that. So if you can- Sounds too good to be true. I mean, it's one of those things where it's like. This is the reason why even large companies are adopting us because they save a lot of money and I think that and seeing the presentation from Pat is the way that people are going to use in the future, right? Nobody want to spend their resources doing firmware upgrades or configuring fiber channel lands. You talked about replacing hardware. The big storage story, right? For the last few years has been flash. This transition from spinning disks to solid state. It seems like you can ride on that wave as the cost curve changes and the capacity curve changes and the workloads of your customers change. How are you, how is, what is the Zadara story? Yeah, so currently we support flash as one of the workloads of customer can go to our console and say, I want flash storage, mostly for performance play. However, we are working and you will see announcement from us in November where we will have our summit in Irvine that will be a little bit smaller than VMWall but still a really good event. How many people shop to that event? We have hundreds of people in our event with mostly customers, potential customers. That's a customer event. Yes. For you guys. Yes, exactly. Do you do your new announcements there? We will do announcements especially on the flash and flash as a service and stay tuned. How does this get out to the marketplace? I mean, are you using the channel and does the channel understand this sort of a hybrid implementation? Really good question. There are some channels that they understand that they need to move but it's hard for them to move. They like the big checks rather than the every month recurring revenue. There are other people that they get it and so I will say 100% of the people understand that they need to move at some point. Maybe 50% or less they are willing to move because it's hard to forget the big checks that when you sell a hardware. But we see every year more and more people willing to look at this. And our channel is less the traditional bar and more of the service providers and cloud providers that they are our customers but actually they are our partners. We form a partnership with them. We sell together to their customers and most of us are happy. Talk about the company's growth strategy. How are you guys going to go forward because you're building all the infrastructure required for the hosting but also you have a flexible model. Talk about how you guys are investing. What's the growth strategy? What's your innovation strategy around that? Yeah, so in terms of growth we, as I said, we continue to grow. For me especially to keep ahead of the innovation is very important. I'm coming from the engineering side. I like to be on the edge and always announce new stuff and innovative stuff. So we invest in R&D and keep ahead of the curve. Also, remember, we are also cross connected to Amazon and we compete with Amazon on storage. That make us to be, force us to be very innovative, very fast. You have a lot of pressure because they're doing a lot of things fast. They are moving fast and we are moving faster. So we keep the innovation. We do every year a major release with different type of new products. And also our strategy in terms of growth is to continue, go back to our existing customers and offer additional services like backup services, DR services, search services. You know, once we have the data it's easy for us to provision those services and the customer go to the console and say, enable this, it will cost me this and that and it is up and running. There's no need for another cell cycle or buy anything. What do you see about Amazon? Because Amazon is again a competitor on one level but a big partner for you. One, that must make you maybe attract a lot of engineers because it's super exciting on that front. But I mean, how does that change the ecosystem? Because Amazon has a partnering strategy but it's not so much partnering in the sense like VMware does. It's more of you draft off of Amazon's success, less of direct partnering. Your thoughts on? Yeah, so because we play the public and private cloud, Amazon and VMware, Amazon Revent and VMware are the biggest shows actually. And each one, you are completely right. The partnership is different in both of them. But our partnership with Amazon is really good. I mean, they are a fast growing company. They want to expand the ecosystem. They understand that in some cases we compete. But they're okay with that. They are okay and actually it's forced the team also to keep moving. Amazon's got a good culture. They do a lot of innovation but they're builders. They move fast. They move fast and I think they use the ecosystem. Sometimes to hire from us, we use to hire from them. You can hide in the shadows. I really think John, the theme of this week might end up being multi-cloud. And I think Zidara having like one foot in the private side and one foot on the public side. In fact, maybe a place where we're all headed. And in fact, if you want to learn how to do that, it's good to go to somebody who has that experience. Yeah, I mean, to me it's a no brainer, this kind of model. I'm just still trying to understand how it all works. So I'm a customer. I buy a box or just buy your service. You put the service in a hosting center. I mean, can you just walk me through? I'm getting kind of down on the weeds, but. Yeah, so you go to ZidaraStory.com and create an account. And basically there, once you have an account, you can choose where to provision the storage. And we have Amazon, Azure, other service providers like Dimension Data and so on. If you want in the public cloud, if you want in the private cloud, then you say, I want in the private cloud. And basically, one of our reps will call you immediately. You will say, well, this is what I'm looking for. And we ship the hardware, if it is on premise, if it is in the public cloud, you click submit, it's up and running. There's no hardware touching at all. No hardware, no. But as I'm an enterprise, you ship me a box. If you are in the on premise, then we will ship not a box, multiple. Servers. Storage nodes and switches. Hardware. Yeah, and you rack it. And our guys can control this remotely, install the software, install everything. It's up and running. It's the same cloud storage running on premise. And you go to the same console and say, now I allocate, I don't know, 30 terabytes of flash or SATA or whatever. And it is up and running immediately. You get an IP address. You can. So especially in management console, it's not so much storage at all. We provide the storage. You can do that too. We provide everything. The customer deal with us via management console. Yeah, but on there, so I'm the customer, I'm on premise. You ship me some hardware. Yeah. Is that storage? Yeah, yeah, storage. That's all the storage. Super micro boxes, everything. Okay, got it there. And then I can still work with cloud storage, just still work multiple cross clouds, right? So you can have the on premise only or you can have also in the cloud and you can replicate back and forth. So you have all the storage, everything on premise. The thing is that the interaction with us is very easy. You don't even need to talk to a set of people. You can if you want. But you go to a console, allocate the storage. It's more of an architectural point. You got to have a footprint. If they want the on-prem piece, you have to have a footprint. Then the initial footprint has a conversation. But once it is there, we monitor the system. At some point, we will call you as a customer and say, hey, John, you are using too much of this drive. We will ship you another box for free and you just need to rack it. It's ready to go for next time you need to grow. And how's the feedback been from customers? Customers love it. The best feedback for me is when they consume more and more. Right, so the best feedback is not a quote, it's a paying, sending a check. This is the best feedback for me. Thanks for coming on, Nelson. Great to see you. Final question. What do you expect to do here this week? What do you expect to learn from VMworld this year? What's your thoughts on the show this week? So we obviously have a booth that is a good place to recruit new customers. I was happy to hear the keynote speaking by Pat that the world is going in our direction. So I think we will be in a really good position as this transition to a more mature state that people start thinking globally about this. Great to see you and will we see you at re-invent? Yes, definitely. The Cube will be there in two months. The Cube will be at Amazon and Web Services Re-Invent. Again, consecutive years. Nelson, thanks so much. See you at Zidara Storage here inside the Cube. I'm John Furrier, John Troyer, our analyst here from Tech Reckoning. Thanks for watching. We'll be right back with more live coverage, three days wall to wall. We're in day one of VMworld. You're watching theCUBE.