 We're here live inside the Cube at the Cloudera headquarters. I'm John Furrier, the founder of SiliconANGLE and SiliconANGLE.tv And it's exciting. We have back in business. We've got the Cube in Cloudera in Palo Alto We have some exciting guests here from Xiotek the president CEO Alan Atkinson and the CTO Steve Secola welcome to the Cube. Thanks John. You guys are a hot company Xiotek obviously in a very sexy space storage which we coined at EMC World Stores is sexy Which has been you know a crazy year last year in the storage business You know M&A's off the charts three-part compelence startups are emerging You guys have a great storage solution. I have a lot of success recently Alan tell us update What's going on with with Xiotek right now? Well, it's been quite an 18 months in storage. I got here at Xiotek in October of 2009 so I'm still sort of new And it's been pretty exciting John So what we've seen happen recently is just an amazing amount of market traction a lot of enterprise wins a lot of wins in the cloud space virtualization VDI Really hitting our stride on the blade-based storage. So basically going out with a very modular approach We're not really doing the refrigerators like everybody else You know buy what you need use a hundred percent of it and the real value prop for us is really flat out Then we serve we basically solve the historic trade-off between capacity and performance in storage You can have both and our newest product announcement the hybrid ice really just takes that to the next level Yeah, I mean everyone's talking efficiency emc net app and that's the big kind of punchline Oh efficiency this and that you've had a career and you know and enterprise a big IT startups big companies Yeah, I think Goldman Sachs qualifies is a huge budget when they're not selling Facebook shares internationally But you know they're they're huge and they're known to be huge What's what's changing in the marketplace from your perspective? You've seen it you've seen where the industry has been and where it's going and now you're at the ziotec We are leading the team. What can you share with the audience out there about the market? Well on a macro level a couple things are happening. One is customers have fewer choices than they used to You mentioned it earlier. There's been a huge consolidation in the industry and I'm not sure that's really a good thing for the consumer But it's really good for us So I like sort of being one of the bigger players out there that's not a three-letter acronym I think it gives us a lot closer to our customers and I think they consider us a lot more strongly because of that Also people are starting to spend again So we're seeing a lot more projects being funded than we did a year ago And I think that's just sort of the normal coming out of the recession or whatever you want to call it Closer to where the rubber meets the road I mean the projects that we're seeing get getting a lot of traction are not surprisingly around virtualization VDI in particular people are trying to figure out how can they make the money work on that? How can they get the ROI that they're looking for for desktop virtualization? And we're also seeing a lot in cloud now keep in mind those things are actually related So a lot of cloud implementations are virtualization behind the scene So it's one followed by the other and I expect that trend is going to continue There's obviously the continuing use cases of you know databases and data warehousing and all that and there's Great businesses too, but the stuff that's really got the acceleration behind it I think is virtualization VDI and cloud Virtualization has obviously been around it's and it's now more mainstream at the technical level It's been kind of intoxicating I talked to tech geeks and they're like we can do so much with virtualization You know them the creativity and the solutions that come out of there pretty strong Has that translated up to at the sea level in the business side as as are the business executives going? Hey, this virtualization stuff's real and how is that impacting the the orders and the market traction around that? Yeah, absolutely, but I think it depends on which sector you're going to is to what does that mean? So for some it's just pure cost savings, right? I don't need to build physical infrastructures for DR plans and those sort of things or gee instead of buying a Thousand Dell desktops. I can buy a couple servers and put some wife's terminals out there and build out a VDI solution For others, it's it's a real strategic advantage They can just do a lot more in a virtual environment whether that's reduced management costs solve data center costs green efficiencies etc etc I Think for some it's just purely a cost equation frankly. I don't think there's a lot of strategy to it in some businesses But in others it really has changed the way that they do business I think the days of buying a one-for-one DR solution where you you know buy a box in one side of the river and another Box on the other side of the river. I think those days are gone We're gonna ask you as a CEO of the company. We asked Joe Tucci the CEO VMC net app CEO is storage sexy absolutely Good answer good. I just look at Steve So so let's see talk about let me the CTO So you're in you're in the in the trenches and you got your hands and all the products and you're looking at the roadmaps Efficiency has been a story that everyone's been tossing around I get more efficient here all that and everyone wants to be efficient can't blame that what are the keys inside the covers Of the solution is the efficiency real jewel? I mean is it the disc is it the network is it to compute? In the technology in the product, where is the efficiency come from first? Io tech it's all about the intelligence storage element the ice It's about all those things TCO is a combination of what you paid for and what you have to do to maintain it over It's life and that includes everything performance how much capacity you can use to relate to that performance How often it might fail or not? We are there's efficient if there's efficient, you know ours is the most reliable most performant solution We like to we know that we can do twice the work in half the footprint So clients out there buying tons of pros means storage budgets aren't getting smaller I mean there's more storage hitting hitting the street every day for these customers. Do they just buy more gear? What's this it form factor is it? Drive technology A lot of companies are still in the game where they end up buying way too much storage for what they need because They don't begin enough performance out of the given hard drives or the actual solutions because they actually are much less Efficient at using this the actual storage devices themselves. We on the other hand are very efficient We run just as fast as when we're full as when we're empty Let alone we get two to four times the IO per drive as anyone in the industry and with our new hybrid ice We take that to the next level What's the biggest technical challenge the your clients have out there in terms of the you know dealing with storage storage strategy storage solutions Is it legacy solutions? Is it planning for the future? Is it op-ex? Is it you know products related? I think Alan talked about it. They're really worried about that op-ex. They're worried about the cost more and more They're more interested in the real efficiency. Show me what you can really do. How many machines? Can you really virtualize? Can you handle the boot storms for VDI? How many users can that happen? We've been the most efficient solution with hard drives in the industry and we're following that up with the hybrid ice with the combination of hard drive and solid state What's the biggest enabler for you guys in the product side that's driving a lot of the sales in the business? The ice and is it the is it the attack as well? I mean, it's one of those things where I look at it as Applications are taking on more and more of what I used to be the burden of data management functionality Therefore storage that can be just efficient and provide data protection and Performance when you need it where you need it and availability is Going to be key in the cloud world because if you can provide very efficient available storage It makes the applications upstream be able to do more with less The cloud the cloud private cloud is a big, you know message of this at the emcee event. They launched a low-end Solution they have that mid-range, you know symmetric and they have the high end with green plum iceland and talk about big data What do you guys what how do you guys view big data? I mean a lot of people try to define it a certain way What's your angle on big data? I mean big data for for us is being able to? Deploy a field of storage blades, which is what ice is known as in a very large environment with any presentation whether it's direct access to a to a server or through a block storage controller or file storage controller Letting you know customers deploy whatever they want to do in an infinite way And that is by definition a private cloud or a public cloud I think John if I could add to that I mean what most of the other vendors out there are saying and I think one of the reasons why we're getting traction is because we're One of the only ones who's not saying it is you know who can build a bigger refrigerator, right? So how much can I reinforce my data center floor and bring in these big monolithic arrays if that's what you want to call them And I think that model kind of went out the window years ago So if you think about how you buy servers now, right? You buy a framey slam little little blades into it and you buy them as you need them and you virtualize them, right? That's how people buy Servers these days Unfortunately, it's not how they buy storage. So typically when they buy storage they they call up their friendly neighborhood pick your three letter acronym And you know you haul in these big array frames and they can't use all that and it's loaded with features And it's one size fits all and if they want to distribute their data So that it really is a cloud where you're talking about multiple data centers or even branch offices or whatever And you want it to just sort of live out there somewhere They've got to buy multiple refrigerators maybe smaller refrigerators, but more of them Whereas we actually have a totally different way of thinking about it How many three-use storage blades do you want to buy exactly what you need the performance is going to be there? The features are going to be there the functionality is going to be there And if you want to buy just one for your data center in Des Moines And you want to buy 50 of them for your data center in Palo Alto That's just fine. They're gonna have the same functionality and you can buy them as you need them You don't you know buy them all as once you need more you just rack it in and in a virtualized environment or in a cloud environment Which are really kind of variations on the same thing That's exactly the way people want to buy it They don't want to have to cut a multi-million dollar PO the next time that they outgrew their latest frame They want to be able to buy another blade and put it in and that's a big value problem It's as simple to manage thousands of ice as it is one We use the same techniques that the cloud does to use management, you know your normal HTTP and you are ice It's that simple all with open APIs. It sounds like the old days and when you know networking just buy more hubs and stack them I was that so the modular approach by as you go approach absolutely right and that's very very appealing in this this environment Right if I add if I'm a company with a VDI solution, and I add another 500 employees I don't necessarily want to have to go buy Another frame because I was already at capacity on my last one It's pretty nice to be able to go buy a single blade for tens of thousands instead of you know millions And to play it blades are known as something that's linear and can grow and you get one exactly we are linear You stack one you get one extra performance you stack to you get two extra performance The same thing goes for reliability and availability all other systems the more drives you put in there The worse your reliability model is and the more a drive service and service costs. That's why we give a five-year warning It's not smoke and mirrors. That's technology enabled savings. I'll tell you about that five-year warning I don't know maybe we'll know that you guys back up the product the five-year warranty, right? I mean that's not pretty we have the numbers to back it up when we you know our failure rate is second to none We don't return do people really express their hazard go come on really five-year warranty the customers. I mean are they surprised They're Very surprised and you usually get the okay So what's the catch right so what you're gonna charge me software maintenance for what $20,000 a year on everyone I buy And what's what's the catch right? And once they get it and they do the they crunch the numbers on the OpEx savings between the fact that they can use a hundred percent of The blade with no degradation The reliability which really translates into the warranty and we beat everybody. I mean we're talking like One out of maybe 20,000 of these things will ever come out of the field even after five years Disruptive on the economics and clients are very much other chair I mean it's very similar some of the successful commodity players on the networking side came out with just straight box fees no licenses And they buy as you grow and they buy thousands of you know spam filters or you know hardware devices you guys do it for storage Yep, you can say that and we're finally making you know the drives that have been known in this industry of getting a bad name It's being basically unreliable. They are a lot so you get the high availability the question would come up from the skeptics would be scale Is there a glass ceiling? Is there a Catch there on the scale side or our largest customer is multi petabytes. I don't know Perhaps there's some exabyte limit that we haven't seen but in theory this thing scales linearly And there's no reason to believe it wouldn't if you look at the architecture There's absolutely no choke point and that's just very very different. So When you have existence proofs as large as we have I'm fairly confident and saying there won't be any Let alone it's we have the telemetry to back it up because we watch every one of these in the field whether they're You know dark sites let us see data, etc Because this is about being able to manage something almost like satellites because they're not coming home Let's talk about competition You guys have a lot of competition out there now that you know as the you know the growing companies that are massively growing get Acquired up by the big boys you guys are competing with again other startups There's a lot of different use cases from low latency database kind of caching solutions all the way up to you know Dealing with the virtual machines over a network is pretty complex. How do you guys fit relative to the competitive landscape out there? And what's the differentiator? so that's a very complicated question, but the answer is we're better so Better cheaper faster more But seriously, I mean let me start with our newest products I think that's the one that I can very clearly delineate in which everybody can kind of just get in the second Which is our hybridized product, right? So this is a product that has a combination of SSDs and conventional disk drives in it and the secret sauce is we've got real-time data tiering that actually moves it literally learns your application and On-the-fly real-time moves the data where it belongs not just moves it up But it moves it down as well This is not like what some other vendors are doing which is sort of a 24 hour batch or 12 hour batch move it around This is real time it learns and adjusts It will be much faster two hours from the time you plug it in then it is the second you plug it in It's pretty cool to watch when you get into that type of product Which you're seeing is you know, we're competing against the guys like fusion iL, right? So these are the folks that really care about performance now our advantages are we are very very fast almost SSD speeds We are very very big so seven point seven usable terabytes in a single in a single blade We are very scalable. We scale linearly just like we always did we have a five-year warranty We enable replication and failover all the things that you get in the storage device. There's no standard device drivers I've got to tell you John that's not a very crowded space. I mean we throw we we we it's not a performance Modular scale we froze multiple deals Against fusion I own the first week we brought that product out and in fact we've only soft launched it So the hard launch is what you're you're seeing over the next couple of weeks That's a very disruptive differentiated product in a preview basis or pre-order basis It is it is it is generally available for order, but there is a waiting list So, you know, basically we've got demands like a hot car. You want the hot car? It's seen on back order Is that pretty much? Yeah pretty pretty much it right which is a good problem for me to have right? You know Steven his team did a phenomenal job Getting that product out there and it's one of many products You're gonna see from us that you're sort of in that same vein Now if you go back to our older product Just the the standardized using using disk drives. It's pretty differentiated too, but The competition is more crowded in the sense that it's it's just technology right now. It's linearly scalable It's got a five-year warranty. It's very highly reliable. It's you can use a hundred percent of it It's got things that nobody else has feature function I think we're on a par with anybody else I could sit here and have a religious discussion with you about why one flavor of what our controllers do is better than Somebody else's but frankly I don't spend a lot of time talking about that because I find that people who know storage look at it and go Yeah, your thin provisioning is a lot like somebody else's and you're a sink wrap is a lot like somebody else's But that's a more crowded space. So once people try us we are great at repeat orders You know people love what we have but we're not the gargantuan Emchp IBM nothing knock those guys, but you know, we have an innovative sales. We have huge sales forces It's huge sales forces and there's a certain profile of a customer Who is going to buy from those because you know what if I buy my server or my network and my professional services my storage In the same guy I get a 15-point discount or you know, whatever else We're much more of a you know best of breed solution where we've got the best storage platform out there And we're very open with the community if you look at what we've done with the BDI coalition If you look at we develop with Cortex these are areas where we're bringing the companies together that have the most innovative solutions out there in a Very very open way our APIs are not proprietary. Everything is restful His growth at the top of the top of the stat too is a lot of them are pretty embryonic actually So there's a lot of development going on there. Yeah, I think the big guys are very very good at iterating on their technologies I think they're very very bad at being disruptive, which is why you see the M&A environment that you currently see among the big tech companies It's also why you see typically R&D percentages of spend at like 2.7 percent, which I'm not kidding I mean those are real numbers You know we spend far more and I think that's really where the innovation right here in Silicon Valley up on 128 Boston it's coming from the smaller companies and we're not small, but We are still very very innovative. I mean we spent a lot of you guys are growing pretty fast But you're not huge like HP. We've been around a long time. My team has been with me for over 30 years We've been doing storage forever and you look at ice ice is an architecture that can take any kind of device And in fact base our current ice with hard drives beats most systems with with SSDs in there as well And you take it to the next level It's just a lot of startups coming out of the woodwork, you know kind of teams first-time entrepreneurs or you know New guys, you know starting out of the garage. You guys have been around the block and Steve Jobs says, you know It's all about a good product To that point, how do you guys have the great product and good success right now? How do you get customers to change you guys are, you know unconventional you got this new form factor you're getting five-year warranty? Scales linearly and it's great value proposition. How do you get clients attention? Is it is it like hey, you know You have to kind of grab them and shake them and say hey You know one at a time John one at one at a time, right? You know you get it in there And once they try it and they love it I'll tell you the current environment has been amazingly helpful for us With a lot of this the guys getting swallowed up and disappearing that creates an opportunity for us It's pretty unique right I mean most of the people that I know of that were buying data domain really didn't want to buy from EMC And the people who were buying 3 par really didn't want to buy firm HP Etc. Etc. Right Being somewhat smaller gives you a much closer customer care factor a much higher touch factor a much more Open way to influence the product development and what's going on and customers like that It's also a sort of serendipity that the whole cloud VDI Virtualization thing is going on and we just fit so neatly Into that because again, I think the whole modular storage Solution is the way people want to go here. So typically if you look at how Storage companies have eventually taken over and dominated. It's almost always a use case So if I remember back to my early days of EMC When I was at Goldman Sachs, I mean the thing that really made it was SRDF. They were the first guys to have truly Synchronous replication that truly worked really gave you a real DR plan That was in the mid 90s and it propelled them to huge success if I look at net app It was NT server consolidation at least on Wall Street That's what really got them noticed and got them into the enterprise if I look at 3 par it was thin provisioning That's that was the thing that people thought about while it's a cost savings model, right for us I think it's you know real-time data tiering and what we're going to be able to apply with a modular based storage in the VDI cloud-based environments and It's always the economics right economics are interesting versus versus building on a zillion individual drives This is you know, not a disk not an array It is a different different partitioning of the problem to enable scale a building block We've been reporting on silicon angle the whole counterculture both on the entrepreneurial level and also in IT You know a lot of people have been talking for years about consumerization of IT and all that But we are taking a different angle on this counterculture mainly around the IT guys Who you know literally if you've been in IT for the past ten years It really hasn't been a pleasant environment a lot of change a lot of cost reductions a lot of the same old business They're now spending more more now. It's more kind of energy in IT And we've been talking about how you know the last time we've seen this kind of change has been the client server Market, you know where oh, hey, we can actually do some stuff differently and scale and provide the value Data cloud and around data and mainly storage at the center of has been a linchpin for this change How are you guys seeing that change in the IT environments from redeployment of resources to Changing of how they're deploying some of their practices and designing networks and storage I mean you guys seeing any of that kind of bottom-up change and is it coming down from the top as well? is Share some observations. Yeah, I'll give you my opinions TV you can answer the question as well I sort of use storage is always the the poor stepchild right so it usually starts with well If you're lucky the app, but sometimes the server But right there and then that's followed by the network at some point and then storage is usually the last thing that happens I don't know if that's good or bad being in storage business But it's kind of the way it goes least you can see where people want to head So when I look at what's going on with virtualization and cloud and all that it's totally changed the way people build the R strategies It's totally changed the way they provision things. It's changed the way they purchase as I said they buy blade servers They fill them up to some degree. They slam in blades when they need them But provisioning would used to be a multi-day rack them up, you know Configure it get the network punchdown is now a 10-minute exercise maybe less depending on how the shop operates Storage though still is basically run in the same way. It always ran They bring in big arrays with big controllers and they plug them into a fiber channel switch or maybe it's ice-cozzy Or maybe it's some other but something like that And they plug it into the server and there's not really any virtualization awareness the server just hits it There's no IO cues or anything like that. I think things are getting a lot smarter And I think it's much it's moving much closer to our way of seeing things And for me, that's very exciting. I mean the idea of storage management in a virtualized environment is far more complicated How do you how do you model performance? How do you know where the issues are? Well in our case it becomes a lot easier because we're a hundred percent predictable You know we're a hundred percent a hundred percent and we're faster to begin with and you can use it all That's a much more attractive model. So I think the storage changes frankly are just beginning I think we're at the tip of the iceberg there I think you've already seen a lot of it in the server world I think BDI is the next really disruptive thing going on in the server world Which is essentially moving the desktop to the server which is going to change the way one of the big implications There's going to be software licensing. I mean, what does that look like when Windows 7 just boom, right? What's that going to do to? Working from home and security issues and you know antivirus and a lot of data center of this whole value proposition now because you Know you can put silo data plans big iron, you know kind of mainframe like mindsets out there But now you got data sitting at the center application integration all these new touch points They're really omnidirectional inside the enterprise. Yeah, so that's causing a sea change of kind of mindset Younger guns are coming out saying hey I don't want to do it the old way well That's the thing if you figure there's so many applications so much software if if storage the actual bottom end of the Storage we're reliable predictable and then Managed as if it was like a software resource you've now met their needs and they can do a lot more with it That's what we do. That's where the market's going in my opinion You know you're gonna see more of that as a kind of a hybrid resource Storage is just part of the right different QoS different QoS's that's what we do We build different QoS's of our ice and the hybrid ice is now the highest level of QoS for any business that you can It's just going to adapt and learn ice has always been a thinking machine by itself It thinks past that now final question for both you guys Alan and this team. What's the next five-year? Vision look like five years from now What's the market going to look like and what's ziotec? place in that world Those may be different what different answers right from what I can see of the big guys It's going to be more the same they're going to continue iterating on their toys And they're going to continue buying folks that innovate that's that's my guess Unless I see somebody have an R&D budget that spikes a lot more than I've seen and a lot more than the Wall Street tends to tolerate That's going to be the plan For ziotec. I mean we have an incredibly aggressive roadmap for 2011 and 2012 I'm spending much more time in the 2011 part than the 2012 part I'm not going to get ahead of ourselves here But you can rest assured that the idea of adaptive learning real-time data tiering Hybrid ice is the first in a series of things that are going to play together They're all going to talk to our restful management interfaces And essentially it's going to provide a modular multi-flavored Very intelligent without me giving too much away way of laying out your data and it's going to be highly highly disruptive You won't see us at ziotec do anything but ice At least not for the foreseeable future and we really are the ice company So we believe in modular bladed storages in a variety of flavors that play nicely together and Give you the solution that you want and that's where we're taking it on top of that I'll add the fact that we're focused everything we've done also allows for and we provide all of the automation tools to integrate with all of the virtualization and VDI and servers and That just makes it that much more simple to scale infinitely and we are the most open company out there. Yes, we are I'm John Furrier. We're here with Alan ackison the CEO of ziotec and Steve Sikola the CTO hot company Their new product It hasn't even been fully available to the public is selling like hotcakes on a waiting list very disruptive innovative model very modular scales Very hot company guys. Thanks for coming into the cube on your visit to Palo Alto. Thanks. Thanks John. Thanks so much. Thank you much