 From the SiliconANGLE Media Office in Boston, Massachusetts, it's theCUBE. Hi everyone, Paul Gillan with another CUBE interview. And in this episode we're going to be talking about ComTrade Software, a company that I'm guessing a lot of you never heard of but it's a pretty big company that you've never heard of. Breaking into the US market now and breaking in an unusual location, Boston, setting up headquarters in the city of Boston. And that may have something to do with the background of my guest, Simon Taylor. Simon is the president of ComTrade Software, which is an end user monitoring and infrastructure management company. He has got in charge of the overall vision, strategy, really breaking into this country and making a name for the company on the US shores. Not that they don't already have a presence here as we'll find out. Tell us first of all, first of all, welcome Simon, thanks for joining us. Tell us about ComTrade. Sure, ComTrade's actually a 25 year old business. We've got about 2,000 employees worldwide. And we actually began as, I think many Silicon Valley style companies began here in the US with a couple of folks who left a very large, well-known software company and decided to make it on their own. So they went, set up their garage, they began building data protection products and monitoring products. The difference is that this garage was actually in Slovenia. It was not in Silicon Valley, it was not in Boston, it was not in the US. And they grew it. They began growing this software business. It was eventually acquired by a larger company called ComTrade Group. And ComTrade now focuses on end user monitoring and infrastructure management. And we began, I think about five years ago, migrating ourselves away from being a services business where we had been very, very focused on building products for other companies. And we started to say, let's go into the software company business. Let's actually take all this expertise in monitoring and data protection. Let's start building our own products and moving up the value chain. And we did. And we started to do that by building scompacks that connected Microsoft System Center Operations Manager to Citrix, did very well there, had a couple thousand customers. Citrix came along and acquired that part of the business in January of this year. And so what's, what remains at this point? Yeah, sure. The company's still very large actually. So we still, we've kept all of our engineers. So we've got over a thousand software engineers. And we've broken the business up into two parts. You've got ComTrade Digital Services that does outsourcing and services work on a global scale. And ComTrade Software. And ComTrade Software is really focused on the hyperconverged market. So we looked at, you know, all of our expertise and we said the two things we do really well are backup and monitoring. And when we looked at the marketplace, we said, what's really hot right now? If we're going to continue to build products and continue to stay up the value chain as a product software company, where do we think we can really make a dent? And what we really like is the hyperconverged industry. We see that this sort of concept of decluttering the data center, reducing complexity. These are things that are essential today. You know, I always tell people there's this paradigm, right? Which is about data loss. And you know, there's over $2 trillion a year that's lost because of data. That is actually a cost, the equivalent the size of the GDP of Brazil. What do you mean lost because of data? So think of the average company. Think of an insurance company or a hospital that suddenly has a data backup problem or a monitoring problem. They lose an entire day's work. They lose even an hour's work in some cases. All of that can be translated into actual monetary loss for a company. You know, it means more man hours to actually get things up and running again. It means data input loss. It means potentially customer service records, compliance issues. People have actually aggregated all those costs and said that that's equivalent to a $2 trillion loss annually. And we love the fact that it comes from software where we're working on that big problem. We're working on solving that problem as support of the hyperconverge industry. Well, I'm interested by your origins in Slovenia. I would guess that most Americans couldn't even tell you where Slovenia was on a map. We know that a lot of software is developed in Eastern European countries, but we don't hear a lot about companies that are actually based there. What advantages does being in Slovenia have for Comtrade software? Great question. And you're absolutely right. I think Slovenia is a country with 2 million people. Many people have not heard of it. But the reality is that Slovenia is a country that has an amazing background in science and math. I always like to say that if you're a politician, you'd love to work there because everyone here is trying to promote STEM, science, technology, education and math. This is a country where the average student does calculus in the eighth or ninth grade. So these guys are very, very focused on science, very focused on math. And in fact, if you even go out to the average person and you say, what do you wanna be when you grow up or what do you want your kids to be when they grow up? The number one answer is gonna be an engineer. Being an engineer there is equivalent to being a doctor or a lawyer here in Boston. And I think that's an amazing thing. It's an amazing place and it creates a culture in which building technology is really part and parcel of what you wanna do when you grow up. So talk about the game plan. First of all, why you? Why were you selected to lead the charge coming into the US? Yeah, sure. So I actually began at Comtrade about 10 years ago. I was running a small startup out of Prague and I was helping central and Eastern European companies to build go-to-market strategies that would allow them to enter the US market. I met the founder of Comtrade, Veselin Yavraseimovich, and he and I sat down and began having this conversation about how we built this amazing, thriving, multiple hundred million dollar business in Eastern Europe. And he now wanted to get into the US market. And the first thing I said to him was, it's gonna be really hard. There are some rankings that actually indicate that the US market is harder than Azerbaijan to break into. I have no idea how hard Azerbaijan needs to break into. I guess it's pretty difficult. No frame of reference. But if you think about a country with two million people like Slovenia, and you think about a country with 350 million people like the US, just building a brand can be a really daunting task. And what I really discussed in that conversation was the need to be incredibly focused with what we do. The need to not just sort of go into the US market and say, hey, we're another software company or another tech company, but to be able to say, we're the best in the world at something. And for us, those two things were back up in monitoring. And you've targeted the Microsoft environment specifically and now the hyper-converged market. Why do you think there is such a big opportunity in hyper-converged? Well, in one word, Nutanix. I think when we looked at the entire sort of storage space and we looked at what everybody was sort of doing, we said, look, there's a real need for monitoring this industry at a higher level. And the hyper-converged industry is kind of where it's at because you're starting to actually take things out of the data center, not keep putting things back in. So by consolidating around a platform like Nutanix, you're able to simplify your data center, avoid data loss and reduce costs. We love that. And so it stood to reason that we had to find one really strong company that we could start to monitor. We looked at all of this sort of various different players and there's many of them in the hyper-converged space and many of them build wonderful products. But what we specifically liked about Nutanix was this concept of enterprise cloud. We really saw that D Raj and the executive team had a true vision for how they wanted to extend hyper-converged and really helped to create a paradigm shift, really be disruptive in the data center industry. And we're proud to be a part of that by offering monitoring products that will allow you to actually monitor end to end the entire Nutanix environment. Is this strictly Nutanix or do you piggyback onto other management systems as well? So what we actually do is we build plug-ins that will connect you to Nutanix and your really whatever platform you're working on. Right now we've got a wonderful product for Microsoft System Center Operations Center, so SCOM, that connects SCOM into Nutanix, does all the end user monitoring and all the infrastructure management. You're gonna see a number of other product releases coming out shortly. But one of the things we've done is we've actually created what we call a super pack. So what a super pack is, is we create for the first time real single pane blast monitoring. And the way we do it is we say okay, so you want to monitor your Nutanix environment and you want to see the way that that correlates to the exchange workload. Well now you can. So what we do is we actually integrate the management packs from exchange and the management packs from Nutanix that we built and we create one single dashboard that runs all the correlation analysis and lets you see the impact that Nutanix is having on exchange and vice versa. You're entering the US market at a time when the software market is really changing pretty dramatically. We're moving away from the old traditional direct sales force market. We now have marketplaces or a primary way of distributing and marketing software. Try before you buy, open source. I mean a lot of the dynamics of software are changing. How are you tuning your sales strategy to take advantage of those shifts? Yeah, sure, it's a great question. And it's a difficult one, right? Because at the end of the day, I think the world has become very used to shopping in a certain sort of way. And that's consumerized. Enterprise software sales was always one very specific sort of mode of operating. But when you looked at the way people were buying things at home, it was entirely different. Well obviously with the rise of technology, Amazon, et cetera, et cetera, people now want to buy things fast. They want speed. And I think that's what's given rise to those marketplaces. I think when you're building monitoring or you're building data protection or you're building infrastructure management software in general, I think you have to be aware of both. So what we try to do is make sure that we leverage platform marketplaces like Microsoft Pinpoint and others. But at the same time, have a sales team that is very, very channel conscious. I think one of the things that continues to be incredibly strong in our industry is the channel. So we work with Ingram Micro here in the States. We work with a number of distributors in Europe. And we have over a hundred channel partners selling our products. And we believe that that really is the secret sauce to enable a channel play and then integrate your channel play with these different marketplaces that the vendors provide. Is this an on-premise sale or do you have a SaaS option as well? So we do both. It's primarily a perpetual license. However, we do offer a rental model. And we do that predominantly for multi-tenant managed service providers who want to stand up some Nutanix monitoring and make it available to a whole bandwidth of different customers. And how important is the relationship with Nutanix to your success in this market? I would say incredibly important. I think that, you know, again, Nutanix is such a wonderful company to work with. Their Elevate Partner Program is exceptional. They work very hard to make sure that there's a number of different marketing tools that are available to partners like us. But I think they're also incredibly focused on building their ecosystem. And that makes them more fun to work with. So when you go into a meeting with Nutanix, ideas are thrown freely on the table. People want to engage. They want to help your product to succeed. And we believe that by supporting the Nutanix economy and helping to become a part of that ecosystem, we're hopefully creating some value for them as well. Where do you see the hyper-converged market growing? Is this going to be a hyper growth market for the foreseeable future? I think so. I think that you're seeing a lot of the big sort of blue chips jumping on the bandwagon. They're coming out with a lot of their own products. I think always the challenge with the blue chips is that they have a lot of legacy technology. And there's an internal need to sort of consolidate a lot of that to create new solutions. The great thing about the Nutanix has done is they've really gone from the ground up. They've built some very, very powerful software. And they're leveraging that software not just to declutter the data center and simplify it. I think they're also using that software to create a true enterprise cloud experience. An experience that gives people a real option for having a cloud that they can control and they can manage. So the management component of that is where Comtrait comes in. Offering that end-to-end user monitoring and infrastructure management and allowing you to develop a very clear visibility inside Nutanix. That's what we do. You also say that you're a data protection company. What's the data protection side of the business? Yeah, it's a great question. So I told you before that Comtrait's in the middle of an evolution. We're evolving from being a services company to being a products company. And I told you before that we really focus on backup and monitoring because those are the two things we do really well. Our products right now are monitoring products. But I can tell you that from a services perspective, over the last 25 years, we have done a tremendous amount of work in the data protection backup and recovery space. So when we look at sort of our skill set and where we really are true leaders, I would say in this industry, you're looking at backup recovery and monitoring end-to-end. What, and as you move into this market, you start to build out your beach head. First of all, you're not just in Boston. You have operations in other parts of the country as well, right? That's right. So we actually have an office in LA. We have an office in Silicon Valley. And we also have another office in Chicago. These are primarily sales offices? Yeah, these are sales offices, but we're actually staffing up across the country. We're starting to have product managers and systems engineers, even some architects. But when you've got a thousand software engineers located in Slovenia who are really, really top class, I think that you really want to make sure that that's where the focus is from an engineering perspective. Does that give you an advantage? I mean, you mentioned earlier about the Slovenian culture being very engineering-centric. Does having the cost structure of Slovenia, are there other advantages to having people over there? Yes, they're absolutely are. I mean, I think from a cost perspective, it is certainly more inexpensive to higher developers there, especially compared to Silicon Valley. Never mind anywhere else. I think that on the West Coast, things have really skyrocketed. So I think having that sort of quote unquote off-shore component to our engineering absolutely allows us to do things at a lower cost. That said, I think the real value is that you've got really hungry people who are really, really excited about the work that they're doing. So for us, it's not just about cost. It's about where are the world's best backup recovery and monitoring engineers? And I would argue that it would be almost impossible to build a company in the US today in one specific city with a thousand engineers who are incredibly good backup recovery monitoring. Yeah, and of course, turnover is a huge issue, and particularly in Silicon Valley area. I would assume that you don't have as big a problem in Slovenia. We have a 95% retention rate of the company. A little shout out to our HR department. They do a wonderful job at that. But I think it is also a clear part of the culture. This is a company that, you know, when you go to Slovenia, if you do ever go, you should check out, it's beautiful. It looks like a mini Switzerland. But when you go, Comtrait has a huge brand there. We're one of the top places to work. If you just do the math, two million people in Slovenia, about 2,000 people working at Comtrait. That's 1%. 0.1%. If you extrapolate that to a $350 million person country like the US, you're talking hundreds of thousands of people. Exactly. So I think we actually play a significant role in shaping the technology industry. Why Boston? Why did you come into this city? Sure. You know, we did the obvious thing. We looked at Silicon Valley. And I think that a lot of people do that. They start there, and they sort of say, this is where technology is. But I think when you really look at the cultural makeup of Silicon Valley versus Boston, I would argue that if a European company wants to enter the US market, they do it through Boston. Don't do it through the West Coast. And there's a couple of reasons for that. The first is that simple time zone, right? If you're on the West Coast, you've got that extra three hours, that means you're nine hours apart from your counterparts in Europe. Here we're six, so we can do a lot of work on the same business day. Very critical. Second, it sounds silly, airplane rides. To go an extra six hours by plane means that consequently, people are more tired when they arrive. You can't have the same level of communication. And people are not going to visit as much. And we really want to have one company, not a different company per country. And I think Boston allows you to do that. It creates a very nice bridge between Europe and the US. But I would say the last reason is that from a cultural perspective, Boston's about winning. I think Boston has a culture of success. Boston has a culture in which people want to build a company, and they want to succeed at it. And I think that that is different than Silicon Valley. I think that Silicon Valley has a startup culture, and it's a thriving startup culture, and there's a huge place for that. But if you're a well-established company that doesn't need VC funding, that's entirely self-funded, that's been around for 25 years, has a couple thousand employees, and you want to enter the US market, you want to enter an establishment. You want to enter an establishment that understands technology, has access to amazing talent, and is easy to reach. And for that reason, I would say Boston's the right pick. Fantastic. Fantastic rationale. We're wrapping up your first year as a US in the US. What's ahead for the second year? I think there's a lot of surprises in store for 2017 for our customer base and for our prospect base. I think one thing that I will say right off the top is you're going to see a continued commitment to Nutanix. You're going to see a continued commitment to hyperconverged. You're going to see six to 10 new products rolled out, and you're going to see, I think, us become, hopefully, the one-stop shop for monitoring of Nutanix, and a few other surprises as well. No, we hope you won't be a stranger. Drop by theCUBE at any time. Thank you so much. Appreciate the time. Thanks for joining us, Simon. Thank you. I'm Paul Gillan. This is theCUBE.