DataDirect Networks: CEO Interview

11:20 AM -- I recently had a chance to sit and chat with the CEO and co-founder of DataDirect Networks Inc. , Alex Bouzari. Over a cup of coffee, we discussed customer value propositions, storage growth, competition, green technologies, and what keeps us both up at night. Heres the gist of our conversation:

What is the core value proposition of DataDirect Networks' Storage Solutions?

Since 2000, we have introduced eight consecutive generations of storage solutions specifically designed to address the different data patterns associated with unstructured data. What is unstructured data? It’s a fundamental paradigm shift that has taken place and has completely changed the nature of data. It is images, streaming video, audio, attachments. It is content and objects as opposed to random bits and bytes of data. It is Generation Xbox -- not Generation Airline Reservation System.

Companies that demand extreme performance for their large content files rely on DataDirect Networks, as we provide data infrastructure solutions that can store and deliver massive amounts of content with the highest performance in the industry. Unstructured data environments today represent 85 percent of all the data that is being created in the world. Others focus primarily on structured data. However, what was once the domain of a select few government high-performance computing environments is now prevalent in mainstream environments. Our S2A storage platforms now provide the data backbone for the most content-intensive, unstructured data environments in the world, including Slide Inc., Xbox Love, AOL, and Warner Bros. Studios.

Why do customers choose DataDirect Networks?We solve their unstructured data problems and provide them with a distinct competitive advantage in bringing new products to market faster, better, and more cost effectively -- whether it’s chip design, car design, or a new movie release. We lower their IT acquisition costs and management costs; we make their networks go faster and scale their environments more seamlessly. We have scaled out our systems in every single dimension, ensuring clients are prepared for unpredictability. For companies that require throughput-intensive, real-time performance, we lead the industry. For companies that require scalable capacity with consistent performance, no other systems come close.

We bring great expertise to the problem of real-time unstructured data. Having implemented hundreds and hundreds of the most complex deployments in the world, we fully understand their problems and can bring a whole range of solutions to solve these problems today and tomorrow -- irrespective of where that tomorrow might take them. We have a unique advantage in addressing the explosion of content. In these types of unpredictable environments, "good enough" and "fast enough" never really is. Customers need to be prepared for the unpredictable, and that's where we come in.

DDN sits right at the center of this industry shift to content-rich applications, while various vendors are trying to repurpose existing product offerings with marketing materials. It would be great for competitors if they could plug their antiquated IO devices into these environments, but they can't.

What are the biggest challenges that DDN solves for end users?

Anything that involves computation, simulation, calculations at high bandwidth, we are there. If you are simulating the flow of water in a dam, we are there. If you are simulating how your Formula One Ferrari will perform on the Bahrain racetrack, we are there. If you need to support in real-time more than 30 Apple Final Cut Pro workstations running uncompressed HD video from a single platform, we are there. If you need to stream four uncompressed 4K content streams from a single platform, only we can do that. The reason why we are the leader in content-rich environments is we give users the ability to scale and do things they simply couldn't do before. We bring more predictability to the IT budget.Power is another challenging area for our customers, and we help bring predictability there as well, by providing a factor of 3 to 4 times the savings compared to our competitors. In New York and London, you have well defined space for your business operations; you cannot get any more, it just is not possible. We deploy our systems in one-third the square footage of our competitors. We lead the industry in volumetric efficiency with 74 terabytes per square foot. We solve performance problems for unstructured data; scalability problems, both in terms of performance and capacity; and we greatly reduce management challenges for the network and environment with power and footprint savings.

How do you see user storage requirements? Will requirements continue to grow?

Absolutely! No question, storage requirements will continue to grow exponentially by 100-fold over the next decade. To put it in perspective, I bought a digital camera a few years ago and it came with a 512MB memory stick. I bought a new one this year and it came with a 32GB memory stick. That's a 60-fold increase in memory. This is just one example of unstructured data, downloadable and shareable. What was tens of thousands of Internet users is rapidly growing to millions and billions. There is no stopping the growth of unstructured data.

What are the industry trends you see driving storage growth these days?

The shift from analog to digital content is driving storage demand. The transition to all-digital content is taking place everywhere from TV stations to film studios, to post production houses and digital intermediate facilities -- is fueling massive requirements for data infrastructure platforms that are designed for the all-digital era. Blu-Ray optical disc encoding is a big driver as well, as is cloud computing.Merrill Lynch recently stated, "Hardware vendors with technologies that enable building very large scalable systems with an efficient power profile and highly dense configurations will benefit the most in an external cloud environment..." and we couldn't agree more. As the provider of the most scalable, power-efficient data infrastructure platforms that exhibit the highest levels of volumetric efficiency in the industry, DataDirect Networks is poised to rapidly expand its presence in cloud computing environments. Additionally, simulations are driving storage demand as they are increasingly being utilized as a means of significantly lowering the cost of bringing products to market. Individual user requirements are growing with unstructured data. Users today are very different from those of just 10 years ago. In the past, storage growth was very predictable; now companies have no idea where they will be in six months to a year. Again, there is an unstructured data explosion that won't stop.

Do you see a growing need for high-performance, content-intensive storage, as people look more toward "stay-cations" and more media activities at home?

Most definitely. There is a seismic shift taking place in the storage industry, a shift marked by the explosion of these content-rich environments -- environments where people communicate with videos and photos in real-time; a world where users generate content and become the producers, transcending their roles as merely consumers. Our sales to Internet businesses, film studios, and post-production companies have boomed in recent quarters. More people are staying home and want greater levels of home entertainment. Many people are not taking the one or two trips a year that they used to, because oil prices are driving up the cost for gas and jet fuel. In some cases, airfares are 50 percent higher than this time last year. People are staying home and looking for new and cheaper ways to unwind, such as going to the multiplex or spending more time on online social networks and video gaming sites, driving the need for an increasing amount of scalable storage capacity to support their content creation requirements.

Whom do you see as your chief competitors? How do you differentiate your offerings?

Well, from a real-time, unstructured data perspective, we are really the only game in town. However, as unstructured data permeates customer environments, the large storage companies such as EMC, HP, NetApp, and Sun are naturally seeing some of their product put to this use, regardless if it's a good fit or not. Once again, it goes back to different data patterns require different data storage. The fact remains that we believe DDN has the specific architecture and the correct family of products to properly address this market. There is a reason over 400 post-production houses and broadcasters rely on DDN.What is DataDirect Networks doing for the green movement?

Green means saving power and space and, of course, money. We have better power efficiencies in our power supplies, intelligent MAID capabilities, and 3 to 4 times more capacity in a given footprint. We have been focused on this for more than three years due to our customers requiring storage solutions with extreme levels of density. We have the greatest volumetric efficiency in the industry and plan to expand our leadership in this area.

So, Alex, what keeps you up at night?

The world is moving quickly to being completely content-centric. A smaller market two years ago is now a big market, and over the next few years the market will become considerably larger. What has been thousands of systems shipped will quickly become hundreds of thousands of systems. Scaling the company to keep up with that type of demand keeps me up at night. However, with our talented employees, strong management team, and solutions roadmap in place, I am confident we will be able to scale very well.

— Tom Trainer is founder and president of analyst firm Analytico. Prior to founding Analytico, Trainer was managing senior partner at Evaluator Group, and has also worked at EMC, HDS, Auspex, and Memorex-Telex during his 30-year career in IT.7022