Editor’s note: Most storage companies in the market today are either all-flash or a combination of disk or hybrid. Tegile Systems is one of the few companies that can do all three. The company focuses on transforming enterprise storage. In this interview, Rohit Kshetrapal, Tegile’s CEO, discusses storage trends and where this software market is headed as well as advice for customers in this evolving market.
What are the top trends in 2016 in enterprise needs and expectations of storage solutions?
Rohit Kshetrapal: Well, for one, I think we’ll see the whole “performance and economics” trade-off begin to disintegrate more. As demand for powerful storage infrastructure increases, price will continue to drop and technology will improve. Flash will keep getting faster and become more accessible. This means that customers will increasingly have more options to pursue multiple tiers of flash – something that is offered with other storage media but is brand new for flash. You can see this in our own IntelliFlash HD; we’re now able to offer an array that is “flash and flash.”
I also think that we’re going to see incumbents like Dell/EMC and NetApp fall behind even further. Right now, most of these companies are offering “me-too” solutions – helping their customers add flash to legacy systems. That’s fine to hold an organization over; but when it comes to a technology refresh, businesses will look to storage upstarts to future-proof their infrastructure. The beneficial impact of flash technology is well known by now, and businesses are realizing that it is an amazing asset for any customer-centric organization. They want to make flash the centerpiece of their infrastructure.
How is the Internet of Things impacting the growth of the storage market?
The Internet of Things is absolutely having an impact on storage – on multiple levels. The onslaught of data being generated is already driving growth of the storage market. We don’t expect that to stop – in fact, Cisco predicts that by 2019 the world will have 500 zettabytes of data.
Really, though, the biggest impact IoT is having on the storage market is that it is pushing us to grow and develop products that are faster, cheaper and, more importantly, scalable. One obvious example is what we discussed earlier – flash’s technological evolution and lower prices. Another great example, however, is that most upstart storage companies now offer cloud-based analytics engines for their clients. As infrastructures get bigger and storage becomes more commoditized, what will set companies apart is their focus on helping companies “manage it all.”
How is the movement to software-defined environments and data centers affecting storage solutions?
Rohit Kshetrapal: Software-defined storage (SDS) is so important, and it provides amazing value; but you have to make sure it is done right. I believe we at Tegile have the broadest breadth of product line in storage because of our software-defined environment. Our belief is that coupling software with hardware is essential just as it is for consumer-product companies such as Apple. We always focus on the net value provided to the customer. We don’t expect the end user to put everything together; they have enough to in their daily lives! Building an SDS environment comes with enormous complexities that are not easy to manage when doing so by scratch, so we take care of that for our customers.
Please describe how the storage market’s vendor landscape has changed over the last two years and how your company fits into the evolving landscape.
Rohit Kshetrapal: For the past two years – really the past five years – capital has been widely available to tech startups. Almost anyone with an idea has been able to build a company. This has changed over the past six months as the economy has forced VCs to be incredibly selective with where they put their money. I expect many storage upstarts that have built themselves upon an expensive sales and marketing model will fall off in the coming years because they lack the business fundamentals and structure to carry their products forward.
We’re obviously now in a very mature, large market that is undergoing massive transformation. First, you have flash, which is giving businesses a significant boost in performance; second, you have this push to the cloud. Tegile is well positioned for both of these trends. The approach we’re taking (as opposed to others) is one that’s more economical, enabling customers to grow their infrastructure to keep pace with the market and technology. And given our wide range of offerings, we’re well suited to adapt as the market evolves.
The storage market is experiencing a lot of consolidation. Does this pose risks for customers? What is your advice for customers looking to buy storage solutions in an evolving market?
Rohit Kshetrapal: The consolidation we’re seeing is mostly a result of incumbent vendors not having truly redefined their architectures. With NetApp’s acquisition of SolidFire, I see the landscape now as pretty much set. Storage has always been a market of five to six players. This is natural and is pretty much cyclical for the market.
My advice to customers would be to make sure your hardware investments are the right balance between immediate and long-term needs. Infrastructure is a means to an end and is extremely important. Any solution you purchase should facilitate growth of your infrastructure and organizational capabilities, not prohibit it.
Besides the fact that your company is one of few that provides all-flash or a combination of disk or hybrid storage solutions, how does your company differentiate itself?
Rohit Kshetrapal: Tegile provides all-flash and hybrid storage arrays that allow companies to consolidate all their workloads onto a single flash platform so that they can enhance the cost-effectiveness of their flash storage – helping them remove storage silos, streamline storage management and boost the return on their investments.
Your company has raised $117.5 million in funding to date. Please describe the current environment and economic climate for funding storage startups and what it will take to succeed long term.
Rohit Kshetrapal: With all the uncertainty in the market, there has been an economic slowdown over the past six months that will likely continue. VCs will tighten the strings on funding rounds and hold private startups to higher standards when it comes to the business basics. A good idea will not be enough any longer.
That being said, I think we’re in a good place. The storage market is a bit of a paradox – the market will keep growing despite a slowdown. We are, however, reaching a maturation in the market, and I expect fewer upstarts. Tegile falls nicely in the handful of upstarts that are disrupting the storage incumbents and are here to stay.
Your company is growing at 350 percent year-over-year. Is an IPO on the horizon?
Rohit Kshetrapal: We’re certainly aiming in that direction and laying down the groundwork. We have an effective cost structure, great growth – 350 percent growth in units shipped, and we plan to continue on that path.
If you could change something about the storage industry, what would it be?
Rohit Kshetrapal: There are a couple of things that I’d like to see change. Fortunately, we are seeing them happen, but it will take time for incumbent vendors to catch on. First, applications need to be built with a mobile-first design. It is amazing how fast mobile computing has taken such a dominant spot in the user interface. Second, pricing models need to change. Most upstarts in the storage business have made the change to a single line item pricing model for hardware and software, but there is a lot of room for simplification out there. I am sure our friends in the channel would agree with me.
You have a 30-year career in enterprise software. What are two of the top lessons you learned during that time about growing a software company?
Rohit Kshetrapal: Great closing question! Before I answer, I must say that I like how you called Tegile a software company. Most of our engineering work is in software. It just happens to be bundled with storage controllers, disk drives and flash modules. The first lesson I have learned is that striking the right balance between sales and marketing spend versus preserving cash is really hard. Underspend? Nobody knows who you are. Overspend? The sales team and channel become dependent on a very expensive cost structure that doesn’t scale well.
Second, on a more personal note, despite all of the advancements we have in telepresence, never underestimate the power of a face-to-face discussion and a handshake. There is a connection between people when they are sitting at the same table that just doesn’t happen over the Internet. I watch this younger generation grow up and wonder how the power of a personal connection will change over time.
Rohit Kshetrapal is co-founder and CEO of Tegile Systems, where he provides strategic direction, product planning, and market and industry leadership. His goal is to transform enterprise IT by improving substantially the performance and economics of enterprise storage. He is leading the development of innovative flash-optimized storage solutions that provide much better cost/performance trade-offs for businesses of many different sizes and with varied applications.