Where to now for the data robot?
Limited options one way but wide open another
Comment Data Robotics has the great mass of business data centre computing closed off but the small business market is wide open and waiting for Drobo-isation.
We talked to Tom Buiocchi, Data Robotics CEO, and also to Paul Thackeray, the EMEA VP, to get a picture of the Drobo company just after it had announced its refreshed 8-bay business Drobo line and its new top-end 12-bay product with thin provisioning and automated tiering.
The Drobo (Data ROBOt) is a unique product in terms of its feature set, which includes the so-called Beyond RAID protection, which enables users to populate the Drobo's drive bays with their own choice of 3.5-inch drives, choosing their own manufacturer and capacity levels. The user interface is a simple one based on red, blue and green indicator lights. These indicate drive health as well as capacity uptake, thus signalling when a drive update is needed to add more capacity.
Lastly the Drobo has a neat curvy cornered black enclosure. These three features don't sound much, but we understand that the firmware behind Beyond RAID, the key Drobo attribute, took two years to produce. We also understand that Data Robotics' founder Geoff Barrall had a very particular idea of what the device would look like, its features, and how it should present them to users. He was, we believe, quite persistent and insistent that the Drobo device should match his conception.
Today there is still no competing product that matches and exceeds the Drobo's functionality and feature set,
After Barrall left and went on to Overland Storage the Data Robotics board appointed Tom Buiocchi, an executive in residence at a Mohr Davidow Ventures, with strong sales and marketing skills among others, as its CEO.
He has helped the company to become more business-oriented. It has a file-sharing (NAS) Drobo and an iSCSI SAN (block access) product, which have both been refreshed in the recent announcement. Now we have the 12-bay product and a new Drobo Dashboard interface, which runs on a connected host server and shows the status, health and capacity take-up of a set of Drobos.
The 12-bay is a 3U rackmount unit and there is talk of a dual controller unit coming, also of a 2.5-inch drive version which would have more drive spindles, and we understand that 4TB drives are supported with testing under way or about to start.
The SSDs for the 12-slot box will be third-party ones qualified by Data Robotics, not supplied by Data Robotics. Expect mainstream SAS/SATA 3.5-inch SSDs to be on the list or, maybe, 2.5-inch ones in 3.5-inch carriers.
How well has Data Robotics done? There are some 150,000 Drobo customers with fewer than 200,000 units sold.
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. ®