Jeff Allen, Senior VP, Strategy & Development, BlueArc

Jeff Allen is the latest recruit to join BlueArc Corp.'s management team. A seasoned veteran in the storage business, Allen was vice president of marketing at EMC Corp. (NYSE: EMC) during the mid-90s, then went to Sun Microsystems Inc. (Nasdaq: SUNW) as VP of storage marketing and most recently VP of global network storage sales. (He also built a hotel in the South Pacific, but more about that later.)

His current mission as VP of strategy and business development at BlueArc is to propel the startup forward into the next phase of its development in other words, set up a reseller channel, improve branding and market presence, create partnerships with the leading storage vendors, and find big customers.

No big thing, then.

Here's what he's up to:

Byte and Switch: What does BlueArc do?Allen: We sell a product called the Silicon Server, essentially a box with specialty chips in it that can handle repetitive tasks in data storage and retrieval, a main function of servers. These special chips do such things as interpreting the basic technical protocols and filing schemes used by operating systems. Instead of employing a jack-of-all-trades microprocessor as its brain, each BlueArc server uses an assembly line of specialized chips – ASICs – that do a few tasks at blinding speed.

BlueArc benchmarks show that our servers fetch data files at five to 10 times the speed of competing products. About 100 times more users can tap into one server than other storage appliances, and each server can manage up to 200 trillion bytes of data, or 30 times more than rival machines.

Byte and Switch: Wheeeee! How many of these babies have you sold then?

Allen: Lots.

Byte and Switch: Lots?Allen: As you know, I can't disclose our revenue, but let me put it this way: We are in some of the biggest global storage accounts, and our renewel rate is growing.

Byte and Switch: In a press release announcing your recent appointment at BlueArc, Gianlucca Rittazzi, the new CEO, refers to you as a “change agent.” Is that some kind of coin-operator? (see BlueArc Names Biz Dev VP).

Allen: [laughing] Yeah, right…

Byte and Switch: Do you dispense quarters?

Allen: If only. No, I think he’s referring to the fact that I am always looking for change.Byte and Switch: Jeff, they really ought to be paying you more – we’ll have a word, if you like. You’ve got an important job there, too, by the sounds of it: "Senior VP of Strategy and Business Development." So, what do you make of BlueArc then? What’s wrong with their strategy?

Allen: I’ve only just walked in the door, so I’m still learning, but BlueArc has made a lot of progress for a startup – there are plenty of others still struggling to get a product to market. BlueArc has reached the first level of growth and is ready for the next phase.

Byte and Switch: And what’s the next phase?

Allen: We need to rethink distribution: not only direct sales, but targeted systems integrators and resellers; and we need to get very focused on growing the services and support operation. BlueArc has a growing professional services skill set, but it’s being given away today. This is typical behavior of an early-stage startup, where you throw everything in just to make the sale.

Byte and Switch: Interesting, so what else could BlueArc charge for?Allen: It has developed some great tools to identify where the bottlenecks are in the system, and we need to establish a value and pricing for this.

Byte and Switch: What’s the advantage to BlueArc of using resellers? And will they understand your technology?

Allen: Many organizations that look at new technology have what we call small business syndrome, which is a fear of small companies disappearing. VARs shield a lot of these concerns. Also, the NAS market is well populated with vendors, which means it’s not difficult for companies to expand with someone else’s product if they think you are going away. As far as understanding the product, we are looking for systems integrators and resellers that act as systems integrators, those who have been successful at selling products in the network storage space before – previous Network Appliance Inc. (Nasdaq: NTAP) resellers, for example, that don’t require us to teach them from scratch.

Byte and Switch: Remind us who BlueArc’s typical customers are.

Allen: We are strong in the high-performance market with post-production and editing sites that need to move large blocks of data around fast; and the same goes for the labs, Lawrence Livermore being the main one. As we grow, the challenge is getting new customers but also repeat business, which the Lawrence Livermore Labs deal demonstrates. But we need to expand into other spots we aren’t in, like healthcare, pharmaceutical, energy, oil and gas, and government. [See Livermore Labs Back for More BlueArc.]Byte and Switch: The trend right now is to drive more margins from software as hardware is being commoditized, à la EMC’s AutoIS strategy. Is it difficult to be banging the drum about purpose-built, expensive hardware when the rest of the market – and, supposedly, customers – are all talking about software and better managing the hardware they already have? [see EMC Mulls Software Buys].

Allen: A hardware engine is absolutely required for pure performance: It’s as simple as that. But this does not preclude BlueArc from having a software management engine that sits on our hardware. We will partner with software providers for things like virus scanning, resource management, and virtualization, but I need to identify which applications make sense – I don’t know yet. It is more important to find out where we play with the rest of the storage community. I think we should partner with companies that do high-end SANs, like Hitachi Data Systems, LSI Logic, EMC, and the like. These companies have some low-end NAS capabilities but nothing like the performance of BlueArc’s silicon server.

Byte and Switch: But if every startup on the block is trying to partner with EMC, why are they going to bother with BlueArc?

Allen: I was at EMC in the early days, remember, when Dick Egan [founder and chairman emeritus] was still running the show. He had a sign above his desk that said "It's the product, stupid!" The problem is, he’s not read it recently. You’ve got to have a product that really makes a difference and perhaps BlueArc can help EMC with this.

Byte and Switch: Maybe, but EMC's world revolves around software now, so surely BlueArc would be low down on its list of possible partners?Allen: I wouldn’t be so sure. EMC is making a major move into the NAS market, and its AutoIS strategy is really just a way to help it sell more hardware, don’t forget. [See Gartner: EMC Rules NAS Market.]

Byte and Switch: How do you feel about the storage networking bubble? When do you think it will burst?

Allen: The industry has gone through a lot of retrenchment. I think people are hoping for more than they are getting in terms of growth, and there’s been a lot of over-acquisition. But we are getting back to a stable environment. In terms of the bubble bursting, it already has: Witness all the startups that are struggling to get more funding; and there’s a huge squeeze on these companies, as everyone is going for the same partners and customers – you can’t have so many people delivering the same story. The good news is it puts more talent on the street for us.

Byte and Switch: We've been getting some strange phone calls lately, from people who whisper down the phone and – under absolute secrecy [ooops!] – tell us that BlueArc's product sucks and that the company is about to go out of business. Any ideas what they might want?

Allen: We're not seeing the best tactics in the industry when people talk about their competition. Because they are winning deals to save their lives, slamming other vendors is all they can do – it's a last-ditch effort. I wouldn't be surprised if that's who's calling you.Byte and Switch: Back in the heady days of 1998 when BlueArc was founded, the company had no trouble convincing starry-eyed investment bankers and VCs to fund the company – to the tune of over $300 million in total. Back then, evangelists like George Gilder were saying BlueArc would be the next EMC, and BlueArc seemed to fall into the trap of believing this for a while. Has the company stopped drinking its own Kool Aid now, would you say?

Allen: Everyone laughed at EMC for trying to take on IBM, and, once upon a time, Cisco was a tiny little company. You have to believe in what you are doing – otherwise, what's the point? In October 1993 EMC was a $350 million company; now its around $8 billion. It just takes time.

Byte and Switch: What other problems do you hope to rectify at BlueArc?

Allen: Branding is an issue. BlueArc needs to get itself identified with a brand and be more discriptive of who we are.

Byte and Switch: What about you, Jeff? Who are you when you're not wearing your BlueArc hat?Allen: Hmmm. I have a very bizarre background. I ran a hotel business in Tahiti [ed note: Jeff actually built the hotel himself with a couple of buddies, and it's now the biggest Sheraton in the South Pacific]. I started the first commercial laundry business down there and also created a band who made one album, called "The Honolulu Bus."

Byte and Switch: Excellent. What did you do in the band?

Allen: I sang and played keyboards.

Byte and Switch: Go on, give us a tune then...

Allen: Noooooo way! My singing career was very short-lived. But, as you can see, I love to build and create.Byte and Switch: Can you get us a discount at the hotel