How to grill an American VC... on the storage upstart world
Battery Ventures VC looks at SanDisk
Interview How do VCs view the storage startup world? Willem ter Harmsel talks to Alex Benik, a partner at Battery Ventures, where he focuses on IT infrastructure technologies. He previously worked for the Yankee Group.
Battery Ventures is a large venture fund that invests in a wide variety of startups, divided into eCommerce & Retail, Digital Media, Industrial Technologies, Software & Services and Infrastructure.
I had a brief talk with Benik about his views on the IT infrastructure market and specifically his take on SanDisk’s acquisition of Fusion-io. I enjoy speaking with VCs, because of the great overall grasp of the markets they cover. Speaking with Benik really helped me see some trends at the right proportions and get new insights into what is driving the concept of the software defined data centre.
WTH: How do you see the path towards the software-defined Data centre?
AB: What I believe is driving this trend is that developers and organisations are looking to move extremely fast. Developers are getting used to the paradigm of going on AWS (Amazon Web Services) and getting resources immediately instead of weeks/months of provisioning time. That is the benchmark against which they are now holding their internal IT organisations.
They are benchmarking their IT organisation against AWS in terms of ease-of-use, agility and price. I think that is the fundamental macro trend that is driving the desire for the software defined data centre.
That manifests itself across the traditional silos of IT Infrastructure: Compute, Networking and Storage, plus the tooling to configure, manage and monitor all this gear.
Battery Ventures has various bets in this area; we think it’s a fundamentally disrupting time. It is very exciting from our point of view.
WTH: Once we have delivered on the software-defined data centre promise, what will be the next thing in IT infrastructure?
AB: Well the notion of the software-defined data centre is a vision we have laid out, but very few traditional companies have been able to execute on this. Only companies like Amazon, Google and Facebook have succeeded; these are large companies with vast resources that have done everything internally.
I think many traditional enterprises are quickly becoming software companies that need learn to do rapid software development. IT Infrastructure should be an enabler to this, not an inhibitor.
That said, most companies have yet to implement the fundamental SDD building blocks in the compute, network and storage layer. We have a long way to go.
WTH: How do you work in Battery Ventures? What does a typical week look like?
AB: We work very collaboratively as a team here, we work out of one global fund. We’re organised by themes and not by geography. We have offices in Israel, Boston and on the [US] West coast. I am frequently travelling between them.
There is a core group of seven people that work on IT infrastructure. A typical week for me is divided in three main activities: New deals, Working with existing portfolio companies, and the other part is general networking. Spending time at events, meeting CIOs and VPs of engineering to stay in touch with the market [is also a part of that].
WTH: How do you regard SanDisk’s acquisition of Fusion-io, and how does it affect Diablo Technologies?
AB: I think it is an intriguing acquisition. I believe they bought a go-to-market machine with a great installed base and some real significant customers.
Obviously, given their acquisition of Schooner, Smart Storage and now Fusion-io, it is clear they want to be a serious player in the enterprise SSD space. What they have been lacking is the go-to-market part of the equation, which they now have through Fusion-io.
Fusion is obviously a business at scale, I think they paid a fair price for the company.
What we have seen in terms of actual performance, Teradimm [Used by SanDisk for its ULLtraDIMM product] brings a next-generation of performance to the market that PCIe approaches don’t bring.
Our aim with Diablo Technologies is to do to PCIe-attached flash what PCIe did to SATA and SAS. We’re bringing another step up in performance.
I think SanDisk has been messaging the delineation between these products pretty well. Ultimately I believe they want a broad portfolio so that customers can choose what works for them in terms of price and performance.
SanDisk and Smart Storage have been great partners for Diablo, we’re excited to continue working with them. Now that they have a stronger go-to-market power, I believe that when they have the integration sorted out this acquisition will be a good thing for Diablo.
The other thing that is interesting is that Fusion-io is an excellent software company. Much of that software can be leveraged on top of Diablo hardware.
One of a series of interviews by Willem ter Harmsel with tech leaders.
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