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DataDirect Networks: CEO Interview: Page 4 of 6

Merrill Lynch recently stated, "Hardware vendors with technologies that enable building very large scalable systems with an efficient power profile and highly dense configurations will benefit the most in an external cloud environment..." and we couldn't agree more. As the provider of the most scalable, power-efficient data infrastructure platforms that exhibit the highest levels of volumetric efficiency in the industry, DataDirect Networks is poised to rapidly expand its presence in cloud computing environments. Additionally, simulations are driving storage demand as they are increasingly being utilized as a means of significantly lowering the cost of bringing products to market. Individual user requirements are growing with unstructured data. Users today are very different from those of just 10 years ago. In the past, storage growth was very predictable; now companies have no idea where they will be in six months to a year. Again, there is an unstructured data explosion that won't stop.

Do you see a growing need for high-performance, content-intensive storage, as people look more toward "stay-cations" and more media activities at home?

Most definitely. There is a seismic shift taking place in the storage industry, a shift marked by the explosion of these content-rich environments -- environments where people communicate with videos and photos in real-time; a world where users generate content and become the producers, transcending their roles as merely consumers. Our sales to Internet businesses, film studios, and post-production companies have boomed in recent quarters. More people are staying home and want greater levels of home entertainment. Many people are not taking the one or two trips a year that they used to, because oil prices are driving up the cost for gas and jet fuel. In some cases, airfares are 50 percent higher than this time last year. People are staying home and looking for new and cheaper ways to unwind, such as going to the multiplex or spending more time on online social networks and video gaming sites, driving the need for an increasing amount of scalable storage capacity to support their content creation requirements.

Whom do you see as your chief competitors? How do you differentiate your offerings?

Well, from a real-time, unstructured data perspective, we are really the only game in town. However, as unstructured data permeates customer environments, the large storage companies such as EMC, HP, NetApp, and Sun are naturally seeing some of their product put to this use, regardless if it's a good fit or not. Once again, it goes back to different data patterns require different data storage. The fact remains that we believe DDN has the specific architecture and the correct family of products to properly address this market. There is a reason over 400 post-production houses and broadcasters rely on DDN.