Rick Belluzzo, CEO, Quantum

"We had to move outside of tape. We needed to strengthen our disk backup products."

October 3, 2006

8 Min Read
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Now that Quantum spent $770 million to buy tape library rival ADIC, CEO Rick Belluzzo faces the same challenge he did before the deal: How does a tape library supplier stay relevant in a world where disk is playing an ever-bigger role in data protection? (See Quantum Takes Tape Rival ADIC.)

The ADIC deal was part of the answer, from Belluzzo's viewpoint. Aimed at beefing up Quantum's market share as well as sales and marketing organizations, the ADIC buy also will accelerate Quantum's strategy of getting deeper into disk, Belluzzo says.

Specifically, while both companies have dabbled in disk-based virtual tape library (VTL) products over the past few years, Belluzzo is looking to expand that considerably by creating disk-based libraries with stronger ILM features.

The first new product from the combined companies will be a midrange disk library for backup use, aimed at remote offices. "We had to move outside of tape [only]," Belluzzo says. "We realized disk, ILM, and tiered storage was going to be the central piece of what our customers will pursue. We needed to strengthen our disk backup products... You take VTL (virtual tape library), add some work in replication and file system management, and you end up with a nice product."

Belluzzo says Quantum will have the first product along those lines in December. He says it will incorporate de-duplication software that ADIC acquired from Rocksoft earlier this year, as well as ADIC's StorNext file system, which lets users set policies for moving data. (See ADIC in De-Dupe Deal.) It also will include replication.Other than that, he doesn't expect a lot of changes in the short term in the products Quantum and ADIC had before the deal. He's hoping the combined tape library line can help fill a void in the market left by Sun's acquisition of StorageTek last year. (See Sun Sets on StorageTek.)

"We wanted to build a large independent storage company focused on backup and recovery," he says. "There was nobody that had the scale to take the position StorageTek had. To do that, we had to have a bigger footprint. Now we have 900 people in sales, marketing, and service."

As for tape, Belluzzo says it remains a key piece of companies' disaster recovery and archiving strategy, as disk takes over for much of the traditional backup process.

"We think [tape] will continue to play an important role in disaster recovery," he says. "There are tiers of storage [that] people put data in to balance cost, recovery times, and all those bring tradeoffs. Disk is asserting itself to be a force and tape will have different roles."

But no matter how much Quantum focuses on disk, according to Belluzzo, you won't see the company getting into primary storage. "The primary storage market is a crowded market, a commoditized market," he says. "Our focus is on backup and recovery and archiving. There are plenty of companies that do primary storage."We recently caught up with Belluzzo for more details about what Quantum and the data protection market will look like now that the ADIC deal is closed.Contents:

Dave Raffo, News Editor, Byte and Switch

Byte and Switch: What was the strategy behind acquiring ADIC?

Belluzzo: We've been working on repositioning the company, even before the acquisition. We're focusing on what we see as one of the most exciting parts of the company -- backup and recovery. We decided to pursue that strategy more aggressively, that's when we made the decision to go after ADIC.

Byte and Switch: Why ADIC?Belluzzo: We wanted to build a large independent storage company focused on backup and recovery. That was our overall objective. There was nobody that had the scale to take the position StorageTek had. To do that, we had to have a bigger footprint in the market, in the channel, and in sales, marketing, and service. Now we have 900 people in sales, marketing, and service.

Second, we had to move outside of tape. We realized disk, ILM, and tiered storage was going to be the central piece of what our customers will pursue. We needed to strengthen our disk backup products.

Byte and Switch: So can Quantum be the next StorageTek?

Belluzzo: StorageTek was a $2 billion company focused on backup and recovery and archive. They tended to be mainframe oriented. They were increasingly integrated by Sun, and there's a void in the market we felt we could capture. We think there's an opportunity for someone independent whose product spans across multiple platforms and operating systems and is focused on backup recovery and archive to build a strong business as a result of that.

Byte and Switch: How many employees have you laid off since the acquisition?Belluzzo: We were roughly 2,000 employees and ADIC was at just over 1,100 before the acquisition. We will have about a 10 percent reduction in headcount, and that's almost complete. We drew people from both companies. We didn't address it as how many ADIC people we kept. We went through the business and said, 'What's the best path in this segment?' My [executive] team, for example, is made up off four people from Quantum and two from ADIC. The CFO [Jon Gacek], head of sales, marketing, and services [Bill Britts] are from ADIC.

Byte and Switch: Are you keeping all previous Quantum and ADIC products?

Belluzzo: We're not getting rid of any products. We have customer and OEM commitments. We haven't accelerated the end of life of any products.

Byte and Switch: Do you expect more consolidation among tape vendors?

Belluzzo: After our deal, there was a smaller deal with Tandberg acquiring Exabyte. (See Tandberg Bags Exabyte for $28M.) There's not much more that can be done.Byte and Switch: Will Quantum make more acquisitions?

Belluzzo: Over time, yes. I don’t think you'll see anything in the short term, but over time when there's new technologies that can help us move forward, we're always open to that.

Next Page: Tape to Disk

Byte and Switch: How much of a factor was ADIC's disk business in the acquisition?

Belluzzo: I think both companies had done some work around VTLs. Both of us independently weren't making as much progress as we needed. The StorNext file system and and Rocksoft de-duplication is going to be pervasive in our product line. (See ADIC Sings SAN Management and ADIC Upgrades.) Quantum had a midrange VTL, ADIC didn't have anything there. You take VTL, add some work in replication and file system management, and you end up with a nice product.Byte and Switch: Do you have such a product?

Belluzzo: In December we will have a product that addresses the remote offices and uses the acquisition of Rocksoft for data de-duplication.

Byte and Switch: One of your competitors, Overland Storage, is trying to play in the primary storage space as well as backup. Will you go in that direction? (See Overland: Bring On NetApp.)

Belluzzo: We're not going to be a primary storage company. The primary storage market is a crowded market, a commoditized market. Our focus is on backup and recovery and archiving. There are plenty of companies that do primary storage. There's a role for us in hardware and software, and disk to tape. We'll play there.

Byte and Switch: Tape vendors have been adding disk products to their portfolio for several years now. Why haven't any been successful?Belluzzo: It's a function of product. All tape companies did the same thing, which was create a VTL. That was the natural way to go. We were first and others followed. (See Quantum Slips Disks Into Backup.) It turns out the VTL market has been relatively small, it hasn't taken off.

There's lessons learned from that. That's why our next product will build on VTL and take it to the next level. VTL was just the first step for us. It makes lot of sense. It fits in with the customer environment. But you can't stay there. You have to build on it. You have to add replication, de-duplication, and bring in other components.

Byte and Switch: When will you add replication?

Belluzzo: We'll have it in our next product [in December].

Byte and Switch: Will you add CDP too?Belluzzo: We've done some work in that area. (See Quantum Rolls Back CDP Project.) We're building a platform and will continue to add functionality. We have VTL, replication, de-duplication. CDP will be a component.

Byte and Switch: Are customers reluctant to buy disk products from a tape vendor?

Belluzzo: People have done the same thing they've done before. They buy primary disk and backup disk, and they're the products they bought from EMC, HP, Dell, and others. We want to make specialized backup and recovery more valuable to an enterprise.

Byte and Switch: Did Rocksoft and its data de-duplication software play any role in your buying ADIC?

Belluzzo: During the early discussions we didn't know about [ADIC preparing to buy] Rocksoft. Having said that, Rocksoft is very exciting. It's a value-add differentiator. The fact we could get it implemented in a short time is an asset. It's something we will build upon.There are unique aspects to Rocksoft that allow it to be more efficient in compression and performance than other de-duplication products.

Byte and Switch: What does the future look like for tape?

Belluzzo: The role of tape is changing with the emergence of these disk systems. Tape will grow in the low-single-digit range. A lot of the growth will come at the low end. We think it will continue to play an important role in disaster recovery. I don’t think you can simply say 'backup and archiving' any more. There are tiers of storage people put data in to balance cost, recovery times, and all those bring tradeoffs. Disk is asserting itself to be a force and tape will have different roles.

Byte and Switch: Do you see disk playing a larger role in archiving too with the emergence of CAS and other disk archiving systems? (See CAS at a Crossroads

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