Khosla's Back, Backing Stealth Startup

Its been a whirlwind first week for Darren Thomas, former VP of Compaq Computer Corp.’s (NYSE: CPQ) enterprise storage group, now the president and CEO of storage networking startup,
Zambeel Inc.

Thomas got the job thanks to legendary Silicon Valley VC, Vinod Khosla, general partner at Kleiner Perkins Caufield & Byers, the lead investor in Zambeel’s first round, which raised $26.5 million earlier this year. New Enterprise Associates (NEA) and Integral Capital Partners also participated, and Zambeel expects to close another round any day now.

Khosla convinced Thomas to take the CEO’s job at Zambeel, and now Thomas wants Khosla to serve on the board. “I want to keep him on a close string,” he says, “although they already drop his name around here like he’s a local employee.” Khosla is currently on sabbatical but told Byte and Switch Zambeel is “a top play” in the Kleiner Perkins portfolio.

With Redback Networks Inc. (Nasdaq: RBAK), Juniper Networks Inc. (Nasdaq: JNPR), and Cerent -- sold to Cisco Systems Inc. (Nasdaq: CSCO) for a whopping $7.2 billion -- under Khosla's belt, it’s easy to see why Zambeel is keen to have him in the wings. (For more on Khosla, see BBO Files for Bankruptcy Protection.)

Either way, Thomas has big plans for Zambeel. “We can do in one year here, what it will take them three years to do at Compaq,” he claims.During his tenure at Compaq, Thomas built the enterprise storage division into a multibillion-dollar business. “It was my home for 15 years, but at its heart and soul Compaq is an enterprise server company.” He says, “It haunted me that I grew the division 44 percent but the company never returned that money back to me; it would always go to the server guys -- and I am a storage guy.”

So what in the name of Zamfir is Zambeel up to?

It’s still in stealth mode, which Thomas plans to change “as of now,” he told Byte and Switch.

He revealed that Zambeel is building a file-based NAS device that will deliver both scaleable capacity and performance. The problem with the NAS boxes out there today, according to Thomas, is scaleability. “They scale in terms of capacity but not performance.

“The Network Appliance Inc. (Nasdaq: NTAP) device can go up and up in terabytes, but this slows down the performance; and once this gets too slow, the customer has to buy an entirely new device.”In the Zambeel scenario, the customer will simply increase processing power by adding a module into the top of the Zambeel box. The beauty part is the software to manage all this distributed processing, which Thomas says is at the heart of Zambeel’s offering.

Virtualization -- the ability to make multiple storage devices appear as one pool of storage to multiple servers accessing that storage -- is the name of the game right now, but is only one part of Zambeel’s storage management, according to Thomas.

“Compaq’s VersaStor [a virtualization product] can’t provide security or access capabilities to the storage,” and this is key, says Thomas. Neither can it take a snapshot, or instant backup, based on meta data, which is the file that tells one how important certain data is.

This is because VersaStor is a block-based system, so it can only look at data in blocks or large chunks, whereas the Zambeel device works on a file level. Moreover, by mid-2002, Thomas expects the Zambeel appliance to offer both file- and block-based virtualization.

The product will be out in beta form in September, with first production expected by the end of the year.The name, by the way, comes from an Indian fable about a Prince who has a magical little bag, called a Zambeel, and no matter what he needs, it’s in the bag. The concept of an infinite resource, like the little bag, appealed to Waheed Qureshi, the CTO and co-founder of Zambeel.

Other executives at the company include vice president of sales Eric Herzog, who was previously VP of marketing and business within the storage technology division of IBM Corp. (NYSE: IBM), and Frank Kreutz who was VP of sales for Fujitsu Network Communications Inc. and before that held senior-level sales and marketing positions at Amdahl and IBM.

Things are looking good for Zambeel, but Thomas is keeping his head down. Of all the other startups in this sector he is particularly wary of 3PARdata (see Top Ten Private
Storage Networking Companies) and Panasas, both staffed with ex-Compaq folk and talking about “infinitely scaleable storage."

“The management staff at these two firms are smart business people; they won’t make simple mistakes,” he says. Then again, he’s not likely to either.

— Jo Maitland, Senior Editor, Byte and Switch http://www.byteandswitch.com