Exclusive Interview With Jérôme Lecat, CEO of Scality

Jérôme Lecat, 53, is CEO at Scality, in San Francisco, CA, since 2010, a company born in Paris, France, being spin-off from Bizanga and formerly BizangaStore. From 2003 to 2010, he led the firm, an email MTA for service providers, sold to Cloudmark in February 2010. In 2001, he became chairman of Data Center Technology, a Belgium-based start-up which developed Content Addressable Storage (CAS) technology, especially for the backup market. After signing over 70 customers, the firm was sold to Veritas in 2005 for $58 million. In 1994, he co-founded Internet-Way, an ISP focused on the enterprise market. As CEO, he built the company from a garage start-up to the second largest ISP in France. In 1997, he sold the company to UUNET, where he served as EMEA VP of products.

He has also been active as a business angel and board member in several technology companies, including Vision Objects, in handwriting recognition, sold to DoubleDay in 2009.

He is also currently:

• Board member, France Digitale
• Ambassador French Tech San Francisco
• Member of M3AAWG (Malware and Mobile Anti-Abuse Working Group)

Wife Anna is also an entrepreneur at Les Lunes, in shapes and styles designed, and they have 3 children, Nathan, Alexandre, and Faïna.

StorageNewsletter.com: Is Scality a French or US company?
Lecat: It’s a French company. Actually, it originated in France but from a management standpoint headquarters is in San Francisco. We have a pretty big office in London, UK, in Spain, we have a team in Germany, a big office in Tokyo. We have two offices in USA, one on the East coast, one on the West coast. About all R&D is in Paris.

You have recently announced that your revenue was increasing by 45% in 2019. For which revenue?
We don’t publish that. I can tell you that we have about 300 customers and that our goal is to become a billion-dollar company.

Is the company profitable?
Not yet, it will be in 2021. I’m confident in that.

How many employees?
We’re at 90 in France and something like 60 in the US, worldwide about 180.

At the beginning, Scality management and employees invested $1.3 million in the company. You also had 6 rounds of funding totaling $152 million. Where are you now investment-wise?
65 employees invested in the company. The sum of all this is now around $3.5 million.

IPO?
I had said in 2015 that we would IPO in 2017. We didn’t because of two reasons: we were not ready and the market was not ready. The IPO market has changed quite a lot and now you need to be a much bigger company before going public. I expect that there will be a window around 2022. By then we’ll be profitable and it’s a good thing to show that you can be profitable before going public.

Your idea on cloud?
For a while, everyone was talking about public cloud and how everything was going to go public cloud. The reality is that no one knows where this phenomenon is going to saturate and where it will end. We have to think 20 years out, I believe that by then public cloud will be 70% of IT if we include everything (cloud computing, SaaS). One of the big trends of public cloud will be SaaS services more than IaaS. I expect more growth in Saas and PaaS than in IaaS. There are people, including on the investment community, who make their decision under the assumption that there will be no more private cloud in 20 years. This is not my opinion. And if I’m right there will be a point where investors realize that there’s a world for software-defined infrastructure at large scale.

Why big storage companies lost cloud storage war to Google, Amazon, Microsoft?
EMC and Oracle tried but being a hardware provider, a software editor or a services company are completely different activities. EMC for example is very successful as a hardware provider but they aren’t very successful in software and not successful at all in service. The only company who is capable of doing all is probably IBM. One of the reasons is because they can afford acquisition like RedHat. When you can spend billion because you’re missing a technology, then it’s a very different game. Even Oracle was not able to do this. Building a real public cloud is an investment of several billion dollars. You need to have vastly different leaders that if you were a hardware or software business. If you handle hardware you have some executives that forces you to buy hardware in-house. But if you’re Amazon, Facebook or Microsoft, you can make deal with hardware manufacturers that have cheap, purpose-built hardware. A lot of storage companies tried to compete but they weren’t committed enough.

Did you regret the departure of president and COO Erwan Menard?
No. We’re still friends and I think he did a really good job with Elastifile. Now he’s with Google and he’s a board member at Kalray. A lot of what he built at Scality is still there.

How much did HPE invest in 2016? Around $10 million?
Yes, that’s about right.

How much of your revenue do you get from OEM HPE?
It’s significant but we don’t entirely depend on it, it’s less than 50%

Who are your others OEMs?
I prefer to use term resellers. If you look closely, even HPE mentions the Scality brand, so it’s not exactly an OEM type relationship. We also work with Cisco, Super Micro and even Dell.

Are 100% of your sales done through channel?
85% is channel. The remaining 15% are old customers who we’re dealing directly with.

Who are your largest customers?
In no particular order, it includes Orange, Bloomberg, Comcast, as well as some of the largest libraries in the world.

Do you think you could be acquired?
It’s always a possibility. But right now, my goal is to grow the company and get the product distributed everywhere in the world. Scality is really about empowering choice in the world so in a way I welcome my competitors because they always create more choice. For me, what’s at stake for the world now is that large enterprise and governments can have choice on how to store their data. There are only 3 or 4 cloud providers, so you need to give companies, telco, the means to be able to deploy their own private cloud.

The only plausible buyer would be HP as all the other big storage companies are its competitors.
I disagree with you. But this is not my focus right now. I worry about growing and satisfying customers. But It doesn’t stop me from having frequent conversations with possible acquirers. Our goal is to be profitable by 2021 which means that we will be the master of our own destiny. Our shareholders are not putting any pressure on us to sell the company.

Do you offer a complete solution with hardware and software?
No, we are a pure software player. Our experience is that customers want to have software delivered in appliances, so this is why we partner with hardware manufacturers. We have reference architecture with all of them so we can give that unified experience. Very often the integrator is the VAR which also does the support.

Gartner wrote about your massively scalable storage platform saying that “customers would like to see improvements in automation, management, proactive monitoring and system analytics.” Are you working on that?
Yes, we are (laughing). On all of these points. Scality was created about 10 years ago and the first thing we worked on was the storage engine. We delivered the highest-performance software defined object storage ever. A customer like Comcast does something like 80,000 transactions per second in production. Another one of our customers creates 1PB of data and delete the same amount every day. This is crazy. So, we had to focus on how to deliver that kind of performance with 100% availability. And we give that to our customers. We’ve been working on UI and operation monitoring tool since 2016. We reached a major milestone with the 7th version of our product. We now have some network monitoring tools because we realized that the main cause of lack of performance was network problems. This tool allows us to debug faster and tell the customer where the problem is. This is not where we put our emphasis on the first 6 years of the company but we’re catching up fast.

How many copies do you encourage customers using RING for protection?
Recommendation is 3+1. Three copies plus the original. At Scality we support both copy and erasure coding. Our basic recommendation is to do erasure copy for pieces of data that are bigger than 128KB. If they’re smaller, you can just copy them. But all of this is defined by the customer architecture and the use case. Disk space gets cheaper and cheaper while the I/O stays the same. I/O is becoming more expensive than space, so they are cases where we used to do erasure coding and now, we recommend doing multiple copy.

Do you integrates de-dupe and compression?
No because it doesn’t make sense for our customers. They are using Scality for user-generated content like email, photos etc. There’s very little space for compression with such diverse pieces of data. If you look at enterprise platforms, a lot of things are duplicated. For consumer that’s not the way it works. We also do a lot of CCTV recording and the software already removes the frames that are identical. It doesn’t make sense for us to do more compression from here either. 25% of our business also consist on being a target for backup software and all of the modern backup software have their own de-dupe technology. De-dupe uses to be done by disk storage subsystems but that was 15 years ago. Compressing and de-dupe have CPU and latency costs. And because we don’t do structured data, these technologies are not for us. The other use-case that we see is AI and ML where again de-dupe is done on the layer above us.

What is RING’s main competitor?
As a company it’s Dell EMC and product-wise it’s ECS. We also compete with Data Domain to some extent and NetApp Storage Grid. Our product is much more versatile than the EMC one and we have more range. We are known as an object storage company, but people tend to forget that we do 50% of our revenue on file. Since 2012 we have both the object storage interface and our own scale-out file system.

DDN WOS?
I don’t think it’s active on the market.

Cloudian Hyperstore?
We don’t see them very much.

Hitachi Vantara content platform?
Same thing.

RedHat Ceph?
This one is interesting. Most customers who deploy RedHat Ceph do it for block, not for object or file. We rarely compete with them because customers who rely on RedHat Ceph want free open-source solutions. That’s not the kind of customer’s we’re looking for.

Western Digital Active Scale?
We were competitors once.

Your roadmap?
The holly grail is software-based autonomous driving for object and file storage, storage at scale more or less. What the world of enterprise want is being able to leverage any cloud and have data workflow that can handle their needs. We laid out this vision a couple years ago and release after release, we keep going in that direction.

Personal questions
You are actively building bridges between Silicon Valley and the French tech scene? Why is that?
When I wrote the famous letter to French president François Hollande in 2014, there was only 1 flight a day between Paris and San Francisco on Air France. This summer there will be 7 flights a day. Why? Because people are going from one place to the other, because there’s much more business being done between Paris and San Francisco nowadays. There’s way more understanding of Silicon Valley in France, way more respect for France from Silicon Valley investors, way more deals between the 2 countries. In 2014 the number of credible start-ups in France was super small, just like the amount of funds raised. All these metrics have progressed. It’s not only about building bridges between the 2 countries. Our generation of company also needs to serve as an example and create social change. Scality gives 1 month, fully paid paternity leave to new fathers for example. We must look at changing social models and be at the forefront of that.

Where do you live?
I live in San Francisco, in Mill Valley Orange County. It looks a little bit like Val d’Isère (mountain resort in France Ed.) except the trees are Sequoia redwoods. It takes me 45 minutes to go to the office.

Your hobbies?
Kitesurfing, windsurfing, hiking, traveling. I also love to take my children on adventure. Last fall we went canoe camping. But I think entrepreneurship is one of my hobbies too. I’ll always remain an entrepreneur is some ways no matter what. I also help a lot of non-profit organization. I met an amazing NPO called Coral Gardeners who plants corals. We donated money to them because I think it’s great to have people who really care about the future of our world.