Phil Soran, CEO, Compellent

"It's not a matter of SAN or centralized storage, but who has the best solution."

November 8, 2005

8 Min Read
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In startup-years, Compellent Technologies Inc. is approaching a mid-life crisis. Founded in 2002 by a trio of able entrepreneurs, it quickly gained ground, thanks to its value proposition: an open storage platform comprising mix-and-match hardware supporting both Fibre Channel and iSCSI, along with thin provisioning and a range of utilities, including replication.

The company has 80 employees and over 200 customers, along with a sizeable network of distribution partners in the U.S. and Canada. It just scored a $15 million round of funding in May, bringing its total to $38 million. (See Compellent Corrals $15M.)

But the modular SAN vendor has reached a crucial juncture. It's time to move to the next level, even as the market for SMB and midrange storage swarms with competitors large, small, and very comparable. There's Dell, EMC, 3PAR, Engenio, LeftHand, and QLogic, to name just a few.

If CEO Phil Soran feels the pressure, he's not letting on. His happy-go-lucky persona embodies what his corporate bio calls "a positive-aggressive culture."

"We're right on path to take the world by storm!" he chirps.Soran isn't yet another Pollyanna. At the very least, he's honed his bravado in a range of circumstances. As a cofounder of Xiotech, he led the company through its sale to Seagate in January 2000. Seagate divested Xiotech in 2003, after Soran had moved on. (See Seagate Airs XIOtech Finances and XIOtech Hot-Swaps CEO.)

The Xiotech heritage haunted Soran at Compellent, as the two companies engaged in a legal battle over customers, employees, and intellectual property that ended in a joint settlement only this past June. (See Compellent, XIOtech Swap Suits and Compellent, Xiotech Bury Legal Hatchet .)

We caught up with Soran last month to ask him about the growth of Compellent, its future, and what he thinks of the Xiotech settlement. Read on, or click on the individual links below:

Mary Jander, Site Editor, Byte and Switch

Organizations mentioned in this article:

  • Dell Inc. (Nasdaq: DELL)

  • EMC Corp. (NYSE: EMC)

  • QLogic Corp. (Nasdaq: QLGC)

  • Xiotech Corp.Byte and Switch: What's happening in storage networking?

    Soran: Well, ha... Storage used to be "snorage" in the 90s. Then networked storage got more exciting, now there's an explosion of growth. Two hundred fifty startups have been funded in the last five years. But the storage landscape is a patchwork. A lot of vendors subscribe to the chicken nuggets theory, where the customer has to put the pieces together. We integrate everything in one solution... [What follows, you've heard before.]

    Byte and Switch: So what's the status of Compellent these days?

    Soran: We have a pretty aggressive plan. We wanted to come up with a product with twice the functionality of a high-end storage system and position that for the midmarket. We've more than succeeded on the product side. We've had one of the fastest ramps in history on the customer front.

    Byte and Switch: Tell us what you mean by midmarket.Soran: I'd call it two areas. First, we mean midsized companies, everything from companies with five or more servers and 1 Tbyte or more. Also, we mean enterprise customer departments. There are applications or areas in larger organizations where they need a standalone solution with enterprise-class features and sophisticated storage management, where they're growing so fast they need their own business continuity and disaster recovery.

    Byte and Switch: Do any particular vertical businesses stand out as midmarket customers?

    Soran: Several verticals stand out. There's healthcare with medical imaging – customers like MIT Medical, the Mayo Clinic, Beverly Hospital, and Charlotte Radiology. In other verticals, legal has been very quick to adopt our products for case management with imaging technologies. The other one is county governments and school districts. Traditionally, they've had long sales cycles and it's tough to get funding. But they're moving very quickly. They're not flush with cash, but they need sophisticated systems, for high-school student records, for instance, or students storing data. Their needs are growing.

    We have all ranges of customers, but what's driving them is the explosion of growth in data and how to manage it. They need business continuity, as we've seen with all the hurricanes and power outages.

    Byte and Switch: How is business?Soran: We're tripling revenues this year, hoping to do the same next year. We're right on path to take the world by storm!

    Byte and Switch: Is Compellent profitable yet?

    Soran: No date yet. It's on the horizon, but we don't publish any predictions.

    By the way, we've added Neel Sarkar, [Principal] of Centennial Ventures, an old director of storage for Dell who helped launch the Dell/EMC relationship. We've got him on board.

    Byte and Switch: Does that mean you're getting ready for something?Soran: In the next few months, we have... several partnerships tying into customer needs that go beyond what we do. We are the premier block-level system provider in the industry, and we are the midrange innovator. There are some things that could enhance our block-level storage solutions.

    Byte and Switch: Such as?

    Soran: Well, we might tie into compliance in areas like legal and finance and healthcare. Sometimes you run into a need for file intelligence.

    Byte and Switch: How many employees does Compellent have?

    Soran: Just over 80. We almost doubled our employee base in two years... Next year we won't double again.Byte and Switch: How many customers?

    Soran: We're coming up on our 200th. We almost tripled customers... We have 80 business partners who sell exclusively for us. We've also accelerated internationally in China, Japan, Korea, the Netherlands, South Africa, and Turkey. It's fun to see how quickly the products catch on. We have a lot of early signups and end-user traction. We got a nice order from a Chinese customer yesterday.

    Byte and Switch: Can you talk about some of the things you're focusing on most going forward?

    Soran: A lot of people tell us they're investigating storage solutions. It's not a matter of SAN or centralized storage, but who has the best solution.

    Sometimes people think it's physically impossible to do something, and we show it is physically possible... It's not Fibre Channel versus SATA, for instance. It's Fiber Channel and/or SATA... and/or iSCSI.Byte and Switch: How is that playing out?

    Soran: Early on, adoption was higher on Fibre Channel. That's shifting. Now, the majority of orders are a mixture. So we allow features like Data Progression... At a block level, we'll ask what is the appropriate drive to store an individual piece of data. Then, based on usage, we can transparently manage it... On the order of half our customers have some type of SATA content.

    [NOTE: Soran is referring to Compellent's recently announced Data Progression application, which runs on the vendor's Storage Center SANs, automatically grabbing blocks of inactive data inside files and moving them from Fibre Channel to SATA drives. (See Compellent 'Blocks' ILM.)]

    Byte and Switch: Well, Data Progression helps sell SATA, right?

    Soran: Data Progression, exactly, will help sell SATA. SATA doesn't have the duty cycle of a Fibre Channel drive, though, so customers ask, "Do I want all my data on SATA?" For those who are on the fence, Data Progression puts the data that should be on high-performance drives and leverages SATA for economics. You might have a primary site for disaster recovery using Fibre Channel. Instant replays use an iSCSI SATA solution.Byte and Switch: So customers aren't afraid of SATA?

    Soran: I have been surprised at how open they are to using SATA, to tell the truth. Their only caution is in asking, Is all my data appropriate for SATA? What should I put in SATA and what should I not? We take that question off the table.

    Byte and Switch: Let's talk about iSCSI. How's it being adopted?

    Soran: Customers can use iSCSI as a lower-cost connectivity technology... or they have primary paths on Fibre Channel and alternate backup paths on iSCSI. We use iSCSI for remote instant replay for business continuity. You can have iSCSI native in the box without switches or converters doing native replication to another site. Also, there's bandwidth shaping. You might choose from eight to five o'clock to have 50 percent of a T1 and at night 100 percent using iSCSI.

    Byte and Switch: What about the competition?Soran: Well, customers always tell stories about what the competition says about you. Our competition says we have a great solution. They sell against us with size, more branding, but not feature/function. I think they kind of defer to us on the advantage we have architecturally.

    Byte and Switch: What about the other big startups – like 3PAR?

    Soran: There's been so much consolidation. A lot of midtier players have gone by the wayside... We run into 3PAR and EqualLogic...

    Byte and Switch: Do you see more managed services on the rise? Can you differentiate for the service provider customer?

    Soran: The advantage we have is dynamic capacity, the thin provisioning type concept. That allows managed service providers to rent space they physically haven't bought yet. That puts the business model on its ear. Now you can sell to multiple customers without pre-buying a lot of hardware.Byte and Switch: What can you say about virtualization?

    Soran: Virtualization is huge... Successful partners have a data center virtualization strategy. But it's not a snap-on box, chicken nugget theory. The infrastructure has to be as utilitarian as you can possibly make it.

    Byte and Switch: What about the Xiotech settlement?

    Soran: Xiotech started in my basement in 1995... They've done real well and they have a good foundation... I'm real pleased with the results [of the settlement]. We didn't do anything wrong and I'm glad to have it behind us.

    Byte and Switch: What was your background before you worked in technology?Soran: I was a junior high math teacher. Then sales and marketing at IBM... The other two [Compellent co-founders, John Guider, COO, and Larry Aszmann, CTO] are engineers.

    Byte and Switch: Do you miss teaching?

    Soran: I still get involved with it. I do guest speaking and coach a lot.

    — Mary Jander, Site Editor, Byte and Switch

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