1. So why don't you tell us where you think the markets are at with storage to start?
The storage market, estimated at ~$33B (systems spend without including storage software and services), is witnessing dramatic changes driven by the arrival of flash as a new persistent storage medium, complementing the exclusive role that HDDs have traditionally played within Enterprise storage systems.
For decades, HDDs have done well in helping to address data growth in enterprises as they steadily increased in density, thus helping to store more and more data cost-effectively. However, where storage systems based on HDDs have not done well is in cost-effectively addressing application performance needs. This is because even though HDDs have improved in density, their IO performance has remained by and large unchanged over the last decade or so, with the result that storage systems have had to over-provision HDDs to match an application's performance needs. Consequently, enterprise storage systems have traditionally been good at either delivering capacity or performance cost-effectively, but not both simultaneously.
Flash changes this equation, and is a perfect complement to HDDs. Flash is very good at delivering performance and very poor at delivering capacity cost-effectively, while HDDs are good at delivering capacity but not good at delivering performance. By combining the two into a single architecture, the economics of storage can be improved radically - a well-designed hybrid storage system can lower the capital cost of meeting an application's performance and capacity needs by 60-80%!
Over the next several years, we believe that a massive shift will take place, wherein modular disk-centric storage systems which account for over 70% of all networked storage will be displaced by flash-optimized hybrid storage systems that intelligently leverage the complementary characteristics of flash SSDs and low-cost, high-density HDDs.
2. Do you still see growth in appliances or more in the cloud?
The simple answer is that both will grow. Appliance demand continues to grow quickly as customers deploy private clouds, but even public cloud deployments can benefit appliance demand.
When using the term cloud, we often think about platform providers, such as Amazon and Google that do indeed displace appliances sold by product manufacturers since they build their own infrastructure. However, there are two other kinds of cloud service providers that end up continuing to drive demand for appliances. First, SaaS companies mostly end up aggregating demand from end-users, small and medium businesses and even consumers, into enterprise infrastructure and appliances. Secondly, hosting companies that traditionally used to rent rack space, power and cooling are aggressively migrating their business models to renting virtual machines (and all the servers, networking and storage appliances that come with a hypervisor) or renting virtual desktops or renting DR infrastructure - thus, driving demand for appliances.
The key difference though is that these service providers are looking for dramatically more efficient appliances. In fact, service providers are one of our fastest growing customer segments simply because we lower their capital costs dramatically, and shrink the footprint of what they deploy by a factor of five or more, which in turn lowers their power and cooling costs.
3. Who do you see as your biggest storage competitor and why?
In just two and a half years of shipping product, we have an installed base of over 1,100 customers and over 2,000 deployments. Our most frequently encountered storage vendors that account for over 80% of the engagements, are (i) EMC with their mid-range VNX products; (ii) NetApp with the FAS product line; and (iii) Dell with the Equallogic and Compellent product lines. Further, when we compete against these product lines, we are increasingly competing against these products as configured to include flash SSDs and HDDs, and not as disk-only configurations.
4. What is the difference and value add to your products?
There are five areas where we deliver substantial value relative to competitors, even when competitive products are configured to include flash SSDs and HDDs.
- 3-5X Performance and capacity efficiency. Typically, to match the performance and capacity needs of an enterprise application, our storage systems require ~25% of the hardware required by competitive products. This efficiency stems from our software architecture that is able to deliver much higher write performance by converting random writes from applications into sequential writes on disk, and much better read performance by intelligently caching cache-worthy data on SSDs. Further, the system is very capacity efficient since it uses low-cost HDDs and employs inline data reduction to further reduce the cost of capacity.
- Superior data protection. Besides storing primary application data, our software architecture facilitates storing hundreds to thousands of integrated de-duplicated and compressed backups (snapshots) along-side the primary application instance. Further, customers can replicate application data over WAN links for disaster recovery, while minimizing the bandwidth needed through built-in WAN optimization. The combination of snapshots and replication allows customers to improve their data protection dramatically, with the result that a lot less data is at risk due to disruptions and recovery is orders of magnitude faster if disruptions do occur.
- Scale-to-fit. Our products are unique in that our customers can scale our products much more flexibly and in more granular increments than any other product in our industry - all without disrupting applications. If customers need more performance without needing more capacity, they can scale an existing Nimble system to upgrade controllers or increase the ratio of flash to disk in the system non-disruptively, without having to change the overall system capacity. In a similar manner, if customers need to increase system capacity but not the performance, they can do so by just adding incremental HDD-based enclosures. This ability to scale granularly and non-disruptively is unparalleled in our industry.
- Administrative Simplicity and Hypervisor/Application Integration. One of the most common benefits that our customers repeatedly rave about is the ease of managing a Nimble environment, which stems from two areas. First, our systems are very simple to setup and manage on a day-to-day basis, since we designed to meet the needs of an IT generalist rather than assume a storage specialist as the administrator. Second, we have invested heavily in building deep application and hypervisor integration out of the box so that is much easier to integrate our products into a broader eco-system
- Remote support automation. We have a unique approach to how we support our customers. By monitoring our customer-deployed systems remotely from our support center on a real-time basis, we are able to know when a system has a support incident at almost the same time as our customer. Further, by gathering millions of sensor values that give us an in-depth understanding of how our customer-deployed systems are performing, we are able to predict and prevent a large number of support incidents before they occur.
5. Will we one day see move into new markets or vertical?
The addressable market we serve today is well over $10B, and while we are growing extremely fast, most of our opportunity lies ahead of us. Consequently, we have no plans to move into new markets in the next few years.
The most frequent workloads we get deployed in include databases, mail deployments, virtual desktop infrastructure (VDI), file services and SharePoint deployments. These workloads are common to companies across verticals and consequently, we tend to be deployed across wide range of vertical markets - financial service companies, manufacturing companies, high-tech companies, law firms and other professional services firms - we have hundreds of customers in all of these vertical markets.
6. Where do you see your products expanding to next, or options you will add to the current product?
Startups often launch an initial product that they then rapidly evolve based on feedback from early adopter customers. We realized that such a strategy would not work in a mature market like storage where the minimum bar for a complete product offering has been established by very mature and very large vendors such as EMC and NetApp. While we are very differentiated on our core capabilities, our rapid pace of customer adoption is also because we have quickly established parity on a range of features that are typically only to be found in mature products that have been around for a decade or so.
With that as context, we also continue to invest significantly in broadening our feature set. Some of the areas that we continue to invest in include continued scaling of our platforms to further extend our price-performance advantage, deeper integration into application and hypervisor environments, further enhancing our already differentiated approach to data protection and so on.
7. I know many customers would like to hear where your products competes with other vendors.
The segment of the storage market we target is typically served by modular mid-range systems. More specifically, over 90% of our competitive engagements are against the EMC VNX, NetApp's FAS products, Dell Compellent, Dell Equallogic and HP 3PAR products.
Nearly 90% of our storage systems connect to virtualized servers, and the workloads that we often see are database workloads, Microsoft Exchange, virtual desktop infrastructure, file services and Microsoft Share Point deployments.
8. Do you see consolidation in the marketplace or more companies starting up in this space?
Both factors have simultaneously been at play in the following sense.
- If you look at market share over time, EMC and NetApp have both been gaining share at the expense of server companies that have systematically lost share, as more and more of the storage market has been networked storage and not direct attached storage.
- At the same time, start-ups have consistently demonstrated an ability to deliver innovation and grow quickly into significant storage companies, before being acquired by the larger vendors. In this sense, it seems that new multi-billion dollar storage product lines have mostly been created by startups that have been able to innovate better than large companies.
Over the last 5 years, there have been over 3-4 dozen storage startups, all premised on solid state storage as a disruptive phenomenon that incumbent companies will be unable to leverage as quickly or as effectively as ground-up designs, without cannibalizing their existing products. While it is true that many, if not most, of these startups will not be able to sustain as standalone entities over time, I also firmly believe that the next set of multi-billion dollar product lines will stem from new entrants into the storage market.
9. Where in the world are most of your sales now and do you see growth in emerging markets?
A majority of our revenue is derived from the US today, although we have expanded quickly over the last 2 years. We now have sales presence and hundreds of customers around the globe - in Canada, UK, France, Germany, Austria, Switzerland, Scandinavia, BeNeLux, Australia, New Zealand, Singapore, Philippines and in China. We continue to expand our global presence with new locations every quarter, with emerging markets as an area of focus as we look ahead at the next 12-18 months.
10. Let's talk about the cloud, what are you doing in the cloud now?
Our biggest area of focus as it relates to the cloud is in serving cloud service providers as a customer segment. This segment has been one of our fastest growing segments. While our ability to deliver 3-5 times better price performance, better data protection and simplicity appeals to service providers, one of our unique attributes is that our systems can be scaled very granularly in low-cost increments, non-disruptively as workloads change - from a very small initial foot-print to very large-scale deployments - we term this scaling ability as Scale-to-FitTM. This allows service providers to stage their investments and mimic an on-demand procurement model which in more in line with an on-demand payment model that they experience from their customers.
A second area where we are leveraging the cloud is in how we deliver support and how our customers manage their Nimble Storage deployments. We monitor all of our customer deployed systems on a near-real-time basis and gather millions of readings per array per day which are then analyzed using big data analytics to predict support problems. We also use this data to deliver a cloud-based management software such that our customers can monitor their global storage environments from any location using a browser.
11. What do you think of SDN and where your company fits in that new buzzword.
In a narrow sense, SDN will help us and help our customers as it matures. If SDN can allow storage traffic to be prioritized based on which application is being served, that will further improve storage performance.