Where to now for the data robot?
Limited options one way but wide open another
We could say that 175,000 have been bought and the average selling price (ASP) is $500. In that case Data Robotics has earned $87.5m in the three and a half years since it started shipping product. We might imagine the revenue distribution could be something like this:
- 2008 - $5m
- 2009 - $30m
- 2010 $52m
On the other hand, if the ASP is $250, then Data Robotics has earned $43.75m. So we can roughly say Data Robotics has earned $45m to $90m in its three-and-half years of existence.
Our assessment is that this is not enough for IPO juices to start flowing in the veins of Drobo's backers. When revenue is up at the $100m-$200m/year level, then IPO thoughts could start circulating around Drobo's board.
Where could Data Robotics go from here? The firm does not want to go downmarket and mix it with the one and two-drive external storage products from Hitachi GST, Seagate and Western Digital. Nor does it want to move significantly up-market and start mixing it in the data centre storage trenches with entry-level iSCSI products from EMC, Dell, HP, NetApp and so forth.
Drobos occupy a niche and that niche could go further up market but not much, going into remote and branch offices and in departments.
It's worth noting that Data Robotics' total addressable market (TAM) includes the estimated 14 million small businesses in USA. Europe is a relative laggard in Drobo sales terms compared to the USA, and Data Robotics now has nine people in Europe with a large potential for sales growth. Taking these points into account Data Robotics TAM, compared to its current 150,000 customer level, is huge.
These customers are all going to be using virtualised servers and improved virtual machine support is a possible development direction for Data Robotics' engineering.
Someone has also mentioned the idea of Drobo-ising network boxes, providing sophisticated communications functionality in a much easier-to-use-and-manage way.
There is also the possibility of providing a disk archive Drobo. We understand though, that there are no plans in place to offer deduplication. That might change.
Data Robotics has led a charmed life so far. The cost of entry to making a Drobo-like box has been thought too high and the likely sales too low for suppliers wanting high-volume sales, which Drobos don't have yet. As Data Robotics widens its TAM and penetrates it more, this could change. It's relatively easy to to conceive of a disk drive manufacturer thinking this way and making a Drobo-like product. That would give Buiocchi a stronger test as Data Robotics' CEO.
Perhaps any well-funded wannabee competitor might look at the make or buy decision and plump for 'buy' though. ®
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