YottaYotta Gotta Customer

NEW YORK -- Wotta relief! At long last, YottaYotta Inc. has shipped its high-end, distributed storage system to its first paying customers, said Steve Mattioli, YottaYotta's president and CEO, at the RBC Capital Markets conference here today.

The company's two initial customers, who received the final shipping product late last month, are the Capital Health Authority, a network of 28 Canadian hospitals, and Internet2, a consortium of 200 universities that is developing a high-speed, next-generation Internet. In addition, YottaYotta has two other customers who are in "acceptance testing," which the company hopes to announce later in January.

"We're going to be shipping product this quarter, and we have salespeople approaching companies in similar vertical industries," Mattioli said. [Ed. note: We think Steve would have jumped up and down for joy, except that he hobbled in on crutches.] YottaYotta's four target markets are: outsourced service providers; high-performance computing; medical imaging; and large enterprises with more than one data center.

The NetStorager system, which finished a seven-month beta test cycle on Dec. 20, 2002, allows multiple, geographically distributed systems to automatically keep their data in sync. The modular system, which uses an internal InfiniBand-based backplane, can scale up to handle into the petabytes of storage, the company claims. Moreover, because of its efficient bandwidth handling, the NetStorager system can achieve extremely high site-to-site replication, the company claims. YottaYotta last month said it achieved 11.1 Gbyte/s throughput over a 2,000-mile link, which would let an organization transfer 1 petabyte of storage in less than 10 hours (see YottaYotta Claims World Record).

Its first customer wins are obviously a major milestone after a three-year journey, during which time one of its main would-be competitors -- Cereva Networks -- crashed and burned. YottaYotta itself had been quiet for so long, we had started to wonder about its longevity (see YottaYotta Still in the Game? and Cereva Is Cerover).It's been a long, tough road (which included the unbearably lame YottaYotta theme song -- remember that?). But YottaYotta looks to have finally delivered on its promises. NetStorager, says Mattioli, is sufficiently differentiated from the offerings of EMC Corp. (NYSE: EMC), Hitachi Data Systems (HDS), and IBM Corp. (NYSE: IBM) that the company can win accounts.

"I like to say we bring our customers to the table kicking and screaming," Mattioli said.

What he means is that YottaYotta's prospective customers already have huge installations of EMC or other vendors' hardware. "Our average customer has $30 to $50 million of equipment on the floor," he says. What's their incentive to go with YottaYotta? Mattioli said organizations that have highly distributed storage needs can achieve a lower total operational costs with NetStorager.

In the case of Capital Health Authority, the Edmonton, Alberta-based hospital consortium needed a way to share data among all of its 28 sites. NetStorager provides the performance of having local storage while allowing the total system to pool all of the storage capacity. "Every blade in the system can access every byte, block, and file in the whole system," Mattioli says. YottaYotta maintains the coherency of all the storage and provides built-in redundancy.

The Kirkland, Wash.-based company, which currently has 120 full-time employees, has received a total of about $50 million in funding. YottaYotta executives have proudly pointed out that its engineering operations are based in Edmonton, where the Canadian dollar goes farther than it would stateside. Nice cost structure, eh? (See Does YottaYotta Gotta Lotta Cash? and YottaYotta Lands $26M.)YottaYotta's funding should last until the company becomes cash-flow positive, Mattioli said, which he anticipates will happen sometime in 2004 depending on how well the company is able to sell NetStorager. But he didn't rule out the possibility of YottaYotta raising additional funding.

Mattioli is still unrepentantly committed to YottaYotta's grandiose vision. "Three years ago, we stood up here and said we wanted to change the paradigm," he said. "That's still our objective: We want to change the world."

We're still skeptical about how many of its storage systems YottaYotta will be able to sell. After all, how many enterprises really need to transfer petabytes of storage among multiple sites? Mattioli notes that the system can start small, starting with as little as half-terabyte at the same level of pricing that an EMC Clariion array would cost.

In any case, after a long wait, YottaYotta's now going to have a chance to back up its words.

Todd Spangler, US Editor, Byte and Switch