Exclusive Interview With DataCore CEO Dave Zabrowski

Dave Zabrowski is CEO of DataCore Software Corp. since 2018. Previously he co-founded Cloud Cruiser in 2010 and was CEO until its sale to HPE in 2017. Before that, he was CEO of Neterion from 2002 to 2009 and then the company got acquired by Exar Corporation early 2010. Between 1997 and 2002 he was VP ad GM at HPE.

StorageNewsletter.com: First, what does the Covid-19 crisis change for DataCore, its employees and business?
Zabrowski: Many aspects of our business and our customers’ business have changed. We do business in all major IT markets globally and every single country’s population and economy has been impacted. The depth of impact and rate of recovery has varied widely geographically (ex: Taiwan, China and Central Europe are getting back on their feet faster than USA) and within verticals (ex: essential healthcare and government increasing while travel, consumer and some manufacturing decreasing). Most importantly, all our employees are safe working from home and our customers’ use has proceeded without interruption.

What hasn’t changed is the increasing recognition of the value of SDS to deliver on the business needs, which is especially valued during these difficult times. It helps companies by allowing them to get maximum value out of their existing investments, improving the efficiency, performance, and availability of the storage IT already has, and doing so across any vendors’ infrastructure. These benefits have always played well in any economy.

You joined the company 2 years ago, why did you accept this challenge?
In short, I was looking for an opportunity to turn a good company into a great company. Why? At that point in my career, I had spent half of the time as GM running large company divisions at scale and half as CEO of startups, so I was looking for a ‘Goldie Locks’ size company that had the culture of a start-up but enough resources to make an impact. DataCore was the fit as I found amazing product depth, loyal customers and an entrepreneur employee culture.  

What have you found? What’s your mission? Especially as the firm appears to be a zombie company i.e with no IPO neither an exit continuing its life a bit under the radar.
We are unique in that the founders prioritized financial strength over exits. They preferred staying under the radar so they could build strong products and a financially solid company. We just finished our 11^th consecutive year of profitability which not many software companies can claim. In fact, with the recession we see many storage vendors who have not been profitable disappearing via fire sales and the not profitable IPO companies increasingly under pressure so I am thankful the founders had this foresight.

In addition, we are backed by Insight Partners who is one of the largest and most successful software investors in the industry. The founder and managing director of Insight, Jeff Horing, is on our board. Jeff and I hit it off from our initial meeting and agreed we would build DataCore into a platform company that would transform the storage industry. This requires investment, support and persistence, which we are doing with our DataCore ONE vision for unifying the storage industry.

Founded in 1998, your firm recognized as a storage virtualization pioneer with SANsymphony, could you update us on the new DataCore?
The new DataCore has been a complete transformation over the past 2 years leveraging the best of traditional DataCore with upgraded systems, technology, and processes – without losing the culture that made the company special in the first place. We have a talented team made of people who have been in the company for years as well as people who joined recently with deep functional and industry experience.

From a product perspective, we have added new capabilities and modernized the UX of SANsymphony, our award winning block SDS product; we launched vFilO, a revolutionary product for file and object storage that works across NAS, file servers, and object stores through a multi-site, keyword searchable global namespace; we launched our DataCore Insight Services (DIS) analytics platform, leveraging AI and ML to deliver proactive optimization insights; we simplified our pricing; and we strengthened our hyperconverged offering. Then we created a partnership with MayaData to pursue the DevOps container storage market combining the two companies’ domain expertise in storage and containers to pursue this explosive market opportunity.

From a SDS perspective, there isn’t any company who can come close to the depth of experience and the breath of products in our portfolio.

Financially, what is the situation of DataCore?
We are coming off a strong Q1 and a successful 2019. As we look into 2020, we continue to invest in strategic areas in product innovation, in outside partnerships like MayaData, and opening up an engineering center of excellence in Bangalore, India to complete a follow the sun development model with our Sofia, Bulgaria and Fort Lauderdale, FL engineering centers.

The company is a reference for more than 2 decades in SDS exposing block, you announced last year ONE Vision with DIS and HCI-Flex, how did the market and your partners receive these new product directions?
When we started talking about ONE, it was a relatively new idea, yet everyone who is exposed to it has the same reaction – it is clearly, intuitively the future of the storage industry. No one can dispute we are moving away from a hardware-centric industry to a software-defined industry. And doing so in an unified architecture will remove many pains of IT leaders frustrated with decades of poor interoperability and vendor lock in.

I have presented the vision myself to hundreds of industry people, customer CEOs, prospects, and reseller partners – and everyone agrees there is tremendous value in shifting to a software platform that gives IT flexibility, a consistent set of services, unified visibility and insights, and puts them in control of using the hardware and the technology that makes most sense for their business.

HCI is a tough market with a few strong established vendors, does your strategy evolve with HCI-Flex? We found it a bit confidential.
Yes. Our HCI-Flex appliance established DataCore as a serious HCI vendor. However, our core value is flexibility, so we don’t care if customers want to deploy on their own hardware, on reference designs from our partners like Intel, Lenovo, or Western Digital, or in a DataCore-branded appliance. Our approach is evolving to shift more of the focus to software, and make HCI-Flex more inclusive of multiple deployment options.

From a go-to-market perspective, we received a very positive reaction to the idea that our HCI software can, unlike other offerings, integrate with both external hosts and external storage instead of being limited to a specific vendor’s hardware creating yet another HCI silo. We have since realized how important it is for the market to understand the difference between erasure coding and sync mirroring, each of which bring important advantages and trade-offs. Our approach allows us to offer a highly available 2-node deployment that is not only cost and resource efficient but also high performance.

The HCI market is here to stay so it is important to us. The market is evolving too, as it realizes the value is really in the software and the differentiation is in the way HCI does storage, which is our strength.

More recently you entered into the unstructured data space with vFiLO. Why did you enter this space?
When we started developing our ONE vision, we saw an opportunity with file and object storage. IT departments are adopting object storage to overcome the limitations in file, and they are upset with their aging filers and NAS systems, the lack of innovation and escalating lock-in costs from those vendors. It was evident SDS could modernize this market.

We evaluated bolting file and object storage on top of SANsymphony, but it implied many trade-offs, and most customers don’t want to mix both technologies. With vFilO, you can launch on a Linux machine and deliver industry leading capabilities which continuously migrates, load balances and safeguards data among virtualized on-premises NAS, file, and object systems and cloud storage tiers – while bridging the worlds of file and object. The overall capabilities are highly differentiated compared to the tired OEM systems that have been increasingly frustrating customers for years.

Do you have traction on the market with this as it’s new for you?
Launching vFilO has been transformative for the company; now we have a one-two punch that gives us a very strong competitive position and are in a unique position to help customers across block, file, object, and HCI with 2 very strong products.

True, vFilO is new from a product perspective but it is the same market, and we have been helping customers with their file needs with SANsymphony for some time. Many of our existing reseller partners have also been selling into this market for years, so it is a very good fit.

In terms of traction, we had our first deal within weeks of our launch, which is very surprising given it is a brand new product, in a two-tier channel model, and the fact it is a complex sale that involves with highly valuable customer data.

We just released our first major update in April and, despite the pandemic, we were able to close multiple major deals over the last 30 days, and we have a growing backlog of hundreds of prospects and POCs we are supporting. In other words, traction has been great, as people see the value of what vFilO can do for them, the ease of adoption, the innovation of universal global namespace, and the flexibility they will gain by taking a software-defined approach that integrates file and object, multiple types of hardware, as well as multiple locations and cloud.

In the coming days, we will be launching cloud-based sandbox environments to simplify hands-on evaluations which we expect will significantly accelerate the evaluation process.

In term of business model, you’re 100% channel, do you have any new partners, OEM or alliances as you have new products in your portfolio?
Yes, we remain 100% channel, which is our strategy for the long term. In North America we have shifted our strategy to focus narrow and deep with key partners with whom we built deep relationships and develop join marketing opportunities.

The launch of vFilO has resulted in significant interest from partners globally. Naturally, going into file and object storage creates many new opportunities to partner with cloud providers as well as ISVs for analytics, log management, media, and other markets.

We are also finding success with CSPs who are taking advantage of SANsymphony and vFilO to increase efficiency of their mix of storage hardware, improve flexibility and deliver on their customers’ performance requirements.

With ONE, you also adopted subscription pricing, how did your channel react? And what was the impact on your revenue model?
It is all about customer choice. Increasingly, some customers want to buy via an OPEX model over CAPEX, so we have offered both since early last year. This was part of an overall simplified pricing model where customers just need to know how much capacity they want and whether they prefer OPEX or CAPEX.

Because our software becomes foundational to a new software-defined architecture, whether the customer buys it via perpetual or term license, it is a long-term investment. Therefore there has not been any significant impact to our revenue model.

For quite long time, DataCore seems to ignore cloud and was considered exclusively as an on-premises player, what is your cloud strategy, still a mystery for many people?
We have not ignored the cloud, check out our ONE vision and our latest vFilO cloud capabilities.

It is true that SANsymphony, as a high-performance block storage system, is mainly deployed on premises for tier-1 mission critical applications, which are not going anywhere. The product is extremely flexible, and has the ability to build local and multi-site sync mirrors for high-availability and simultaneously it also enables high-speed replication to different datacenters or to the cloud. We also provide SANsymphony on the Azure marketplace.

However, with vFilO, the hybrid cloud model and autonomous data placement becomes much more important. Our customers blur the lines between on-premises and cloud. It continuously migrates, load balances and safeguards data among on-premises and cloud storage tiers using ML and arbitrage modeling to optimize for cost, performance, capacity, availability, compliance as well as other business objectives. For example, they can define what files they want to archive based on usage or location (or any metadata really), and vFilO will automatically compress, de-duplicate, and move the files to an object store which can be local or could be AWS S3 or any other S3-compatible cloud. Yet, the files remain in the global namespace and will continue to be available for users as if they were still stored locally.

In other words, vFilO makes it easy for IT departments to take advantage of cloud storage in a way that is efficient, integrated, and automated.

You recently announced an investment in MayaData, a small player in Kubernetes storage, what is the rationale behind this? Why did you pick MayaData and not Portworx, StorageOS, Diamanti or Robin.IO?
This is another area where we spent a lot of time understanding the market, the technology, the use cases, and where everything is going. We started our own engineering efforts with a team of a dozen engineers almost 2 years ago and made tremendous traction. We interviewed countless analysts, customers, and many experts and were convinced of the market and our approach which was unique compared to many other vendors. MayaData viewed the market similarly and we concluded our technologies were complimentary.

It is clear containers are going to be an important technology in the future of IT. Today there are two markets: the IT Ops market, which we serve directly through the CSI plug-in in SANsymphony and vFilO. This is the traditional IT market that wants to enable container applications. The second one is the cloud-first, cloud-native, ‘DevOps’ market, which is completely different than ITOps not only from a technology stack perspective but also from the perspective of how they buy and how they evaluate technology.

The cloud-native market is very fond of open source technology as it is built around communities and flexibility. MayaData was already far ahead as the leader in open-source SDS for containers with OpenEBS, both from a user adoption perspective, customers like Comcast and Bloomberg, as well as endorsement by CNCF.

Therefore, the joint venture gives us the ability to focus on the ITOps market while having a strong participation in the DevOps market with a leading player. Insight Partners already has a very strong portfolio of companies in the container space. DataCore contributed technology, talent, and funding. As you know, we have patents that protect the IP on some foundational technologies around SDS, which are part of a cross-licensing deal with MayaData.

Since we built the partnership, MayaData’s progress has accelerated, it looks like it will be a 2 horse race between a commercial offering (Portworx) and a community offering (MayaData). We are happy to be partnered with MayaData as we believe the open source ecosystem around Kubernetes will win the container native market.

We see that this investment is also supported by Insight Partners, a historical investor at DataCore and also the private equity firm which acquired Veeam. Jeff Horing, managing director at Insight Partners, joined DataCore’s board of directors. It gives us an idea as Insight likes to merge portfolio companies as they did in the past and we could anticipate their desire to build a giant software company with potentially Acronis, DataCore and Veeam. Could you elaborate on this? Is it a pure utopia?
We get tremendous leverage from the extensive Insight portfolio and there have been examples where combinations of their portfolio have been very successful. It is good to have an investor that is so active and knowledgeable in adjacent spaces but we are focused on building DataCore as an independent company.

What is DataCore doing for customers during this CoVid crisis?
Over a thousand hospitals and hospital groups around the world rely on our software for not only mission-critical but life-critical applications. In these times, we are giving all healthcare-related customers free access to DataCore Insight services, health checks and priority support, which means direct access to a level-1 expert engineer in minutes, available 24×7.

For new customers we are adding flexible financial terms but more importantly we have been focusing our message to the market to emphasize how a software-defined approach can help organizations increase the performance and availability of the hardware they have, and pool capacity from multiple systems in a much more efficient SDS approach, while giving them a foundation for the future.

What can we expect for the rest of 2020?
At the end of 2020 we hope you will see a stronger DataCore that is clearly leading the industry as the strongest standalone SDS player. I also think this is the year where the industry realizes SDS is not a new technology for early adopters but a standard component you expect to see in any modern datacenter around the world. The technology has delivered on the promises, which, in many cases, was too good to be true: easier management, more efficiency, better performance, data services, better availability, etc.

In 2020, an IT organization that does not take advantage of SDS will be a laggard, falling behind its peers in terms of getting maximum value out of their storage investments. In fact, our recent market survey found that 64% of respondents fell within the range of “strongly considering” SDS to “standardizing on it.” Additionally, roughly half of the respondents answered that they were looking to SDS or HCI to satisfy their primary and secondary storage requirements for the future – reflecting the increasing movement toward software-defined infrastructure to address many of the industry’s current pain points.