 Meryl from Dell, former Ocarina. Now Dell, Meryl, come on in. Meryl was the CEO, and I believe, one of the co-founders of Ocarina. The other guy was a smart guy. So we're live inside the Cube. Welcome to the Cube. This is my co-host, John Furrier. Nice to meet you. Real-time briefing. We haven't really had a chance to sit down and debrief, but we've been following you, wrote about the acquisition, followed it, and so we're familiar with it. But this is the Cube. We're broadcasting live here at SNW. I feel honored. SiliconAngle.com, where all the action is SNW is where storage is changing from an industry that's about disk space and IOPS to one that's changing the world, enabling all kinds of great user experiences, and taking advantage of the latest and greatest technology. We're excited to have you. Dave, welcome back. Thank you. It was good. We had about 100 people in there talking about FCOE, believe it or not. And two of them actually had FCOE. What's going on with Dell? Here's the thing. Let me set it up. The number one trend in storage that we always talk about is storage growth. It's out of control. It's been out of control since I started in the business, and it's going to be out of control when I leave the business. I have no doubt. That's really where Ocarina was playing, was to figure out ways to control that growth. I want you to talk a little bit about that and maybe even go back a little bit to sort of how you got the company going and then where you're at now with the Dell integration. Sure. You know, it's funny you talk about that. It's a hot topic. I feel like it's been a hot topic for the last three years. I would say that for the, you know, about a third of every paper that I saw presented at SNW in the last three years started with sort of one slide and just different ways of saying, you know, data, the data explosion is here. Every year it's not stopping. That's right. It hasn't let up yet, and it looks like it's going to continue. So, you know, you can't just wait for it to go away, so I guess you've got to do something about it. And, you know, talking about sort of the origins of Ocarina, we actually, it was kind of funny. My last company had sold to Citrix. I'd been there for a couple of years, and one of the things I did when we were well past integration and I went up to the Citrix CIO and I asked him for his top three problems. And, you know, I'm not a storage guy by profession, and so he, his number two item was storage growth. Just something that was completely unexpected. You know, Citrix is not such a huge company. It doesn't store data for a living, so it didn't feel like that would be a big issue, but here it was. And so, you know, I, me and my co-founder, we said, hey, you know, this sounds like a real-life problem. We can go work on something cool, or we can work on something cool and important. So, we said, well, how about that? Let's go pick that. So, that was kind of how we got started. Cool and important and profitable, even, right? Well, hey, there you go. Even better. And so, how to just take us through that entrepreneurial track, because that's interesting, because, you know, you got it, you focused on it, you developed it, and then you sold it to Dell. I mean, that must have been a ride. Talk us through the emotion. I mean, entrepreneurs kind of don't think, hey, we'll sell it. I mean, you were approached by Dell and said, hey, you know, we should do something, and how do you handle that? Absolutely. So, you know, we had some very, very exciting technology. So, we kind of took the approach that we were going to really crush that problem where it stood and try to bring a lot of different disciplines to storage and DDoop. Interestingly enough, we kind of weren't even aware of companies like Data Domain and others not being from storage, you know. So, we went and took a completely different kind of an approach to it using, I'd say, you know, techniques from compression, communications, and stuff like that, and applied it. But very quickly, you know, we got the technology in the market in about a year after we founded the company. And in the subsequent two years, we had a tiger by the tail. I mean, this thing was, you know, we had a lot of petabyte customers who were very, very interested in our solution and deployed it successfully. And that's when we knew we had something. As engineers and founders, you're like, okay, you got the tiger by the tail, it hits you. Wow, there's a line forming for our stuff. What do you do? You got to dig in deep and build more, right? I mean, you don't just say, hey, I built the total solution. You kind of nibble away at it. At what point did you say, wow, we got to work harder, build this out faster? Well, you know, I don't know about work harder. I think we were feeling like we're working pretty harder. But, you know, but... When it hits you, the aha, like, wow, this is it. I'll tell you what. The aha, I think, was, you know, pretty much when we got our first PO and it was for 250K, you know, from a customer who couldn't solve this problem. And, you know, usually you kind of, as a startup, you start by taking small bite-size, you know, things of the apple. Give it away for free and see it's in feedback, you know. You go to your friends and family and all that stuff. You know, we had a large corporation saying, here's a check. Here's a check and we want more, you know? So, I think we knew right then. And it wasn't really no surprise because we had done quite a bit of diligence before we even started the company. You know, we had some great VCs, Piner Perkins, Highland Capital and so on. And, you know, those guys don't part with their money very easily. But, in this case, they were, you know, beating each other up trying to give us money because we had spent quite a bit of time analyzing and... And you've been there before at another venture. So, you've been at another venture, sold to Citrix. You guys weren't, you know, dear in the headlights. No, no. Kind of experienced. Track record just says that you probably execute well, but you need a big problem. That's the hard thing to find. And you found one. Right. How much did you raise? We raised about 30 million. 30 million? Yep. You've done anything differently? Oh, well, you know, I don't think I'd have done a lot of things differently. I think we would have picked a time when the economy didn't slow down in between. Yeah, that was a real... That's about the only thing I can think of. You can't really pick that. And I'm not... You can't pick your friends, but you can't pick that. I'm not trying to say we had flawless execution. That's not the point. Well, you never do. You never do. This always looks back. HR issues. Not talking about the big picture issues. Looking for advice to other entrepreneurs. Strategy. You know, sort of maybe thinking about starting something, you know, things like that. That's really what we try to probe for here at theCUBE. Oh, well, you know, I mean, you know, don't do anything where there isn't a big customer problem. I think it's pretty clear to me that entrepreneurs are very, very smart. They're very passionate. And a lot of times, they're serving the Kool-Aid so much that they've kind of drunk quite a bit of it along the way. And they kind of forget that, you know, what they have is kind of cool to them, but it may not be as cool to everybody else. And I think when you start the opposite, instead of starting with a technology, or even if you start with one, as long as you kind of focus and, you know, find a big customer problem, that is, I think, at the heart of really kind of building, you know, a great and sizable opportunity. Yeah, now the whole concept of an appliance, maybe I'll go back to network appliance, right? It's been a real boon for entrepreneurs, right? Because you can't just go to IBM and say, hey, take my technology and embed it. I'm going to say, yeah, sure. They're not going to get any market traction that way. And then it gives you some other flexibility to not just ship an SDK, right? I mean, so, but when we saw, I know as an observer, when we saw all these storage optimization technologies coming out, we said, ultimately, this has to be embedded. Okay, so where are you at with that? Okay, so let's talk about that, right? So first headline, I mean, hey, DDoop is a success in the sense nobody, we don't have to tell anybody that DDoop has been an accepted technology. So what's really changing in the marketplace? Well, I think there's two things that are changing, right? One of them is people now want DDoop everywhere, not just in backup. They want it in primary, they want it in near-line. In fact, they want it in storage workflows. They want it on replication. They want it everywhere. So that's one headline, right? The second thing is, I would say that what they want is an end-to-end optimization solution, not just point solutions. So we've had great point solutions. But what customers now are discovering is, for example, let's take a simple example. Somebody shrinks their data on primary using technology A. Well, guess what? When they're backing it up, they're going to have to rehydrate it, expand it, send it over a bunch of, you know, fat pipes take a lot of time to a backup appliance with a trunk again with a different technology. This thing makes no darn sense at all to anybody. It's obvious, you know, to the simplest layman that they go, hey, wait, what did you do? Why did you just do that? So one of the things that we're doing, you know, and now we're doing this as part of Dell, which is really super exciting, is we're doing several things, right? First of all, we've always had the technology, best technologies shrink at any tier. So we're applying it not just to backup but to primary, to near-line, and then applying it to storage workflows as well. So one is the best technology. It's kind of the second generation of DDo which is content-aware DDo. We can talk a little bit about that. But the second thing we're doing is we're embedding it, just like you said, Dave, as well as we're making it all work end-to-end. So that thing starts with a very, very simple philosophy. The philosophy is this, right? Shrink your data early and then keep a trunk through the lifecycle of the data. Unless a user is looking for the data, you really shouldn't have to rehydrate the data. So in other words, if you take a data center, you know, say data is created in the beginning, user uses it, it's very active in the beginning. After that, it stops being active. It's certainly after 90 days, right? 90 days is probably a very common knee of the curve, right? So let's say after 90 days, you shrink it. And then after that, you know, data moves around a lot. There's a lot of storage workflows. We estimate about 40% of the workflows in a data center are about migration, replication, you know, tearing, right? Backup, all of these workflows have nothing to do with the user. It's got to do with a machine talking to another machine. And for all of that, you don't need to rehydrate the data. Just keep it shrunk, right? And so what you do by doing that is, now the next generation of DDo, it's not about just cutting storage costs, it's about shrinking backup time and replication time. Network bandwidth consumption, yeah. You know, in fact, even at Ocarina, one of the significant things, we went back and did some case studies on our customers like about six, seven months later to see what, and you know, they were raving about all the bandwidth benefits and the backup benefits they were getting. They weren't even talking about the cost of storage because that's an ongoing operational cost. So one is a CAPEX reduction, the other one is an OPEX reduction, right? It's huge. So today what we're doing, busy doing at Dell is taking kind of our Ocarina's technology and the secret sauce in that and embedding it in all of the storage platforms that you're seeing slowly but surely coming out of Dell, we're not ready to announce all of them today because, you know, then it would put you out of business, you wouldn't get all the information. You want us to come back several times. We'll put you on our research client list then, for sure. You need some help there. So what you're saying is your technology is going to be put in Dell's end-to-end. So you're going to essentially be incubated and sprinkled across the different solutions. Yes, sprinkled across and you know, I would say you should start thinking about this technology from a customer viewpoint. A customer wants to see it as early as possible in Dell's lifecycle of the data, which means not just in storage but possibly even in servers. Why not? So you talked about context-aware and that's really one of the unique things that Ocarina did, does. What do you mean by that? Take people through how you take different content types and apply different algorithms, different technologies to optimize the capacity. Very simple thing called content-aware. We're rocking. Just a little search here. I want to just interrupt you for a second. I want to thank you for all the folks out there. Syndication's just kicked in. We're introducing theCUBE here at SNW. We're here with Dell executive and founder of Ocarina. Talking about storage. Storage is where the action is. And we're here because the storage industry is turning into a revolution and opportunity and massive growth. We're talking about money. He sold this company for millions and millions of dollars to Dell, what was the number? I'm not at liberty to talk about that. Let's put this right. There's more growth going on now. IBM bought store-wise for over 100 million, and that was the same time frame. Dell didn't publicly release a number, but it was a substantial exit. Investors are happy. Storage is changing the life of users out there, from gamers to people using Facebook, Twitter. New applications, video. The storage is moving from this collection of disks to really a part of the cloud, mobile. I want to welcome the new viewers. Sorry for the interruption. Let's get right back to the action. We're here with Dell, former Ocarina. We were talking about how... Let me reset here. Ocarina was a company before it got acquired that focused on storage optimization and de-duplication and compression. Different technologies to shrink the amount of storage that you have to store. We all know about the capacity explosion. The IDC says 1.2 million petabytes was shipped last year alone. Ocarina is a company that solves that problem by applying proprietary algorithms to shrink data. We were just talking about the unique aspects of what you do around different content types. Most technologies are sort of generic across all content types. Talk a little bit about what you guys did that's different. Content-aware optimization is basically a three-step process. At first step, ironically, is to be able to shrink the data better. We actually expand it first. So we call it delaying. So what we do is we take... Let's take an example of a zip file. Let's say we're looking at the incoming data and we got a zip file. What we do is we unzip it. In fact, it may contain a PDF and a Word document or a PowerPoint file. We'll expand that. We'll keep expanding it, stripping its original compression and encoding until we get to the raw data, binary form. So now it's in a raw expanded form. At this point, now that we've stripped out the original encoding and compression, we can apply Ocarina algorithms. So the two classes of algorithms are dedupe and compression. And in dedupe, what we do is we call object dedupe. So it's very different from the classic kind of block sliding window dedupe that you've seen applied. And an example of that would be let's say we encountered in the PDF as well as in the PowerPoint file the picture of a building. Somebody's got a corporate overview. They've got the picture of the corporate headquarters. Well, what object dedupe can do is it'll recognize that picture as an object. Now think about this. That object is encoded in PDF differently because that comes from Adobe. Then it is in PowerPoint, it comes from Microsoft. So the ones and zeros on disk for that picture are totally different. So a sliding window dedupe wouldn't catch that object. Whereas what we do is we recognize that as an object because we're content aware and we say, hey look, that's the same picture in both these places. And we can dedupe at a sub file object level. So we're now able to look underneath the file and look at all the images that are similar like a logo, for example. It would be the Dell logo an object. And then we strip it all out. The next thing we do is now we've got a whole bunch of different content types and we can apply content specific algorithms for compression. And a great example of this would be, you know, if you have oil and gas type of data or DICOM images for medical images, we can recognize different data types and we'll apply specific algorithms. We've got a suite of over 40 algorithms that are specific to each content and so we can shrink it better than anybody else can. Okay, so you've got that content and now that technology you were talking about before because we've got a lot of new audience members here, you're applying that at Dell across the entire portfolio you call the dedupe everywhere and it's a dedupe slash compression everywhere and basically the premise is that most of the data that we're storing is let's call it stale after 90 days and so why not compress it, especially if you're going to be moving it around the network and storing it in archiving and that's what Dell's working hard on. So, you know, content aware, the content aware compression and dedupe what does it give you? It gives you three or five times better reduction at any tier so now what do we do? We can now put it inside servers inside some of the various Dell storage platforms, you know, like Dell and you know, that will be having Ocarina technology in there, Ecologic will have, you know, that technology embedded in there and then what happens is you shrink it very, very early like you said, 90 days, the data is less active, shrink the heck out of it and then just keep it shrunk and so as the data moves from tier to tier, you never rehydrate so you can replicate faster, you can back it up faster, you know, all of the benefits of bandwidth and much less management time. Very pragmatic philosophy. So, we call that end-to-end optimization. Can I ask just a generic Dell question? Because, you know, as he Michael Dell is known and started in his dorm room, he's very entrepreneurial Dell has grown to be a monster. I remember when they were doing direct males working at HP at the time. They got into the enterprise, now they're massive, very successful business model, but now the world's changing and everyone's going direct, is direct what's new for Dell? Tell us what's happening that's exciting at Dell right now. Well, you know, I guess, Johnny, it's very funny having been there now eight months. I didn't know much about Dell at all before coming to the company. There's very few parts of Dell that are not exciting, but let's talk about sort of some of the changes from the top down. You know, I think Michael has come in and has decided to transform the company from being sort of a top-notch franchise PC player that is, you know, best-of-class e-tailing. Supply chain. Exactly. So that still continues. That part of the company is constantly reinventing itself, right? So, you know, supply chain gets even better, you know, pads to market better, the e-Dell part is still continuing to. But not a lot of R&D. And so on. Well, you know, yeah, the in a sense it's really about integration and putting together packages that anticipate what customers need and serving those segments. But now let's talk about the enterprise business. So what's happened is, Dell is complimenting that technology now with really kind of its own IP. So the big news is owned IP versus OEM IP. And that's what I mean by R&D, right? So requiring and now they're doing, you know, by default. So Dell has, you know, interestingly enough, Dell has been a pretty large storage player, but it's done it with a mix of its own technology. And they also are very active in the mobile business as well with China Mobile. I mean, it's not hidden secret in the U.S., but not hidden secret. But now I'm going to be talking about Dell, about Apple and the iPhone, but Dell has success in mobile. Yes. Can you share any data there? Well, you know, I think I would want to talk a little bit about the storage business and then we can get to the mobile business. So the point you were making is that essentially you were Dell was reselling a lot of other people's storage, particularly, you know, had a relationship, still have a relationship with EMC. But basically you guys are splitting margin. Yeah, these are all great partners. Well, Schudert used to say to me, Dave, when two people got a split margin, there's a less margin for me. There's less in that cake to eat, right? And so I think the big change is kind of that move from saying, you know, let's leverage the success that we saw with Equalogic. Equalogic was a huge success, right? You know, acquired in 2008 and it's, you know, it's increased six, seven times since then. Yeah, there are Wall Street estimates out there that says that it's, I guess, approaching a billion. I don't think I've seen one that says it's surpassed a billion, but I've seen that. But Equalogic was, you know, it's a relatively small company at the time, right? So... Yeah, so, yeah, it was, you know, it was a successful company, but it was about, I'd say, 150 million or so and so that's been a huge success. I think what Dell sees now and is executing on not just seeing is the opportunity to kind of go in and leverage all those customer relationships that have been built up through these reseller agreements and turning it into a much higher margin business. And not only higher margin business, it's stickier business too, right? Because, you know, if you look at and sort of follow the stuff, the client business or the laptop business is less sticky, the server business is more sticky and as we all know, storage is very, very sticky. So let's talk about that transformation in specific terms. Obviously, Ocarina, we've been talking about Equalogic, Compelent, recent Ocarins, and then file system technology with Exonet, right? So, new pieces, I mean, in addition to a bigger acquisition of Peros, now you've got a services component. That's a complete transformation. That's right. So you've got, you know, what you see in all of the names that you mentioned are sort of a combination of some of the core platforms on which products can be built, like Equalogic and Compelent and then things like the file system and the Ocarina GDOOP technology as key building blocks, kind of think of it as a Lego block that you can put on top of these different platforms and now you create various products that, you know, for different market segments in the... So now the hard work begins, right? Putting all this stuff together. It's already begun. Yeah, it's already begun because it's not trivial to say, okay, we're going to take all these piece parts and weave them together somehow and it's all going to click like a well oiled machine, different cultures and different technology bases and so you know, how's that working? What's your take on? It's working great. You know, one of the great things about coming into Dell has been I think we've been welcomed with open arms so there isn't, there's not a lot of NIH because you know, there wasn't that much internal stuff so the beauty of it is it's... You're running the show. You're running the show. You know, it's smooth sailing as far as integration. We consider ourselves well integrated and I think welcomed and now we're kind of you know... They're relying on you guys. I mean they're relying on your technology. I think we're relying on each other. Let me tell you one thing, you know when Ocarina got acquired you know, I told my team why would a company like us who's been so successful want to go get acquired and it's very simple because you know, getting in with Dell is like tying a rocket ship to our back, strapping it to our back and turning it on and guess what, it's going to take us to where we want to go even faster. You know, we aim to revolutionize the world and we do and our ability to do that both financially, access to customers access to an incredible sales team and it's all happening. From Ocarina's standpoint, have you seen that dramatic uptick in revenue or are you still going through the integration process? We're going through the integration process but we're seeing the I would say the change is dramatic in our number of people we've hired the ability to we've gone from one product that we had that was a standalone product now to, you know, six or seven products that we're going to be introducing with our technology in there and not only that, the customer base is incredible what a fantastic customer base people who really like the ecologic product and now the compelling product and those are all targets for us. So we're talking about the transformation of Dell, how does the the organization work? I mean some companies, you know, big whales they buy a company, they leave it alone maybe right now is an example of that leaving data domain alone, leaving ice alone alone how's it working in HP's actually quite different, right? HP's mashing stuff in, how's it working at Dell is it a combination? I think it's really kind of a pragmatic approach to that organizationally in other words, so if you look at people like ecologic and compelling I think they're being left alone but being, you know, kind of boosted up through the Dell system whereas companies like Ocarina we are, you know technology that's kind of a horizontal technology that cuts across all of these so we're actually working with all these different platforms and getting embedded in there so we're left alone in that sense nobody's just telling us how what we should be doing, but what we're doing is working with these different groups in sort of a, you know, horizontal Yeah, your objective is not to optimize your particular solution, it's to embed or rather, you know, the way to optimize our solution is to embed ourselves Yeah, yeah, great, good Absolutely Alright, Merly, this was a great discussion I appreciate you giving us an update on Dell and Ocarina It's good to see you again, it's been a while It's like you've got a really pretty exciting thing going Yeah, we do, we've got a big audience here I feel like I'm on ESPN 4,794 people I'd take screenshots because, you know, a lot of people don't pull those kind of numbers I think there's more people watching us than there are live here So I have a question for you, we have a lot of folks out there that are watching the scene here and want to know, Storage Networking World's obviously a show that's been around for a long time and you said you're new to storage in a way from your last venture Talk about the entrepreneurial action happening around storage not so much old school storage, but like you're an entrepreneur, seasoned entrepreneur you've been there, done that you've done it before, you've raised professional money from line of Perkins and these top firms So take us through your view of the entrepreneurial landscape How exciting is it and what are you seeing that's emerging that's getting a lot of a mind share from entrepreneurs the kinds of problems, automation is it virtualization anything in particular that you see? There's a lot going on in storage from an entrepreneurial viewpoint and part of the there's really two reasons for that one is it's a big market and it's a big market where there's a constant set of new needs popping up and the second reason to be perfectly candid is because of the recent successes of companies like us and other exits that have happened there's a lot of VC money chasing the sector too So I think there's a number of areas that are pretty exciting clearly the cloud has spawned a lot of opportunities for entrepreneurs I'd say there's probably two or three broad categories one is just to be a cloud itself I think the success of Amazon If you were an entrepreneur right now say your work's done at Dell It's not done yet but yeah Just say it was and you were going to go out there and take a step back, maybe take a couple weeks off or whatever, days, months whatever entrepreneurs take one day off or what would you look at? Well I would say that there's a lot more than What would your compass take you? Would it be cloud? Would it be mobile? Would it be consumer? I would actually not go to mobile that easily I think the mobile thing in the end is there's a couple of choke points that are very very important the platforms themselves and so on so it's not all that easy it's a lot more tough because it's kind of hard to get to that top two or three kind of applications and so on with the exception of gaming which is kind of a little bit of a hit and miss game I would say I think certainly storage is one, virtualization I think is an area where I see a lot happening where it's kind of like the theory of virtualization and the early practice kind of the early gains have been gotten now there's a whole opportunity to turn that into a bigger ecosystem next level kind of software automation these kinds of things I think there's a big opportunity there VDI represents a newer opportunity that's beginning to take shape and so on I think the cloud is a very exciting place being a part of the cloud is an exciting opportunity figuring out how you can seamlessly go from your data to the cloud is I think an unsolved problem there's a number of people Cloud and storage all powers things like gaming and we have a big audience out there watching right now that have a gaming affinity towards gaming gaming like Starcraft Xbox and then you get the casual gamers of the Zingas and Farmville that kind of stupid game stuff but gaming is now part of the culture what do you see in that world with Kinect being hacked and you know you got new user interfaces any comments the commentary not so much stories but like that evolving edge consumer you have any opinion on that well you know I mean clearly I think one of the things that's happening gaming is the addition of the mobile platforms it's not the domain of Xbox Nintendo and those guys anymore I think you know just look at the success of Angry Birds it's not that small stuff so I think the intersection I think of mobility is with gaming is a huge intersection the other one I think is really the intersection of social networking with gaming it's not just as simple as multiplayer games now which is kind of a niche if you will there were a few games World of Warcraft and other things like that that were sort of very focused on that but I think there's kind of the intersection of all those has kind of thrown things into a different realm the social gaming has been a big phenomenon it's a big phenomenon but social networking with gaming and stuff like that the other thing that I'm seeing kind of interesting is a number of other industries applying kind of gaming techniques to what they do in other words enterprises kind of approaching a bunch of their solutions in the form of games to attract people great okay I'll take a step out and Merley thanks very much for coming we have riverbed it was great to see you again thank you coming on Dell great update congratulations on your acquisition made a lot of money we're very successful powering Dell I'm John Furrier the founder of siliconangle.com and siliconangle.tv we're live here at SNW in Silicon Valley it's a storage networking show it is a show about innovation the old storage business distrives kind of boring you know snorage is now the hotbed of innovation massive growth I'm calling this the south by southwest of store