Stay on Top of Enterprise Technology Trends
Get updates impacting your industry from our GigaOm Research Community
It’s easy to confuse the technology industry with the shiny, attention-grabbing consumer web that’s comprised of services such as Twitter and Facebook, but there’s a whole slew of other, very vibrant Silicon Valley startups out there. One such company is 3-year-old Santa Clara, Calif.-based Data Robotics, maker of the Drobo line of data storage devices. It’s quietly turned into a niche — but fast-growing — player in the storage industry, to the point that founder and CEO Dr. Geoff Barrall has started dreaming of an initial public offering. Yes, you heard that right -– a startup not named Facebook is daring to dream big.
Data Robotics started out making a consumer storage device that used BeyondRAID technology to enable the backing up of digital data, first via USB and then over home networks. The $399 device could fit as many as four hard drives and had a full terabyte worth of total capacity. Drobo found willing buyers amongst early technology adopters -– including myself -– who were often buckling under the load of too much digital data. My music collection alone needed a terabyte of storage, mostly because I had ripped all my CDs in lossless format in order to achieve the highest possible fidelity.
And while that was a good start, the company has since expanded its product line and started selling to small- and medium-sized businesses. “People who bought the product at home are the ones who are pushing the company’s offering into the business environment,” said Barrall. Indeed, Data Robotics’ transition to the enterprise is part of the larger trend in which technologies popularized by consumers are finding their way into the business environment.
Other examples of this trend in the storage space include Dropbox. Elsewhere, Skype is fast becoming part of the corporate terra firma and even giant corporations are tapping into Facebook’s social networking abilities to connect their organizations.
I recently caught up with Barrall, who was also formerly the CEO and founder of Blue Arc Systems. His long experience in the storage industry has helped the company attract $53 million in funding, including $10 million in its most recent round of investment led by Focus Ventures. Other investors in the company include Greylock Partners, New Enterprise Associates, RRE Ventures and Sutter Hill Ventures. “We needed the money not to spend it but because we need a cushion as we have a lot of orders,” he told me.
All of these folks are betting on Barrall and so far, their faith is paying off. The DroboPro drive that costs as much as $3499 to store up to 16 terabytes of data is literally flying off the shelves. People are not only using it as a back-up solution, but to run applications.
Data Robotics’ storage devices compete with similar offerings from Hewlett-Packard (s HPQ) and Dell (s DELL), yet the company has been holding its own –- mostly because of its price and product advantages. Case in Point: the company just released Drobo S, a $799 drive that supports eSATA and adds an extra fifth bay for an additional hard drive that will allow it to accommodate up to 10 terabytes of data.
To further its foray into these markets, the company last week introduced DroboElite, an iSCSI SAN storage solution that simplifies management and pools storage capacity across several servers. It costs roughly $6000 for a 16 TB system. “The goal has always been to work our way up to the SMB product line,” explained Barrall, pointing to the successful path Microsoft took from consumer desktops to corporate workstations, and from servers to bigger machines.
Data Robotics has so far sold 85,000 devices. Just 5,000 of them have been sold to business customers, but they account for about half of the company’s revenues. And while it’s not likely that the total volume of devices sold to businesses will ever exceed those of the Drobo consumer drives, Barrall is confident that more and more of his company’s revenues are going to come from small- and medium-sized businesses.
In the meantime, Data Robotics’ sales are soaring. After hitting $15 million a year after launching its first drive in June 2007, the company doubled its revenues over the next 12 months to over $30 million and hopes to hit $60 million by June 2010, its third year of selling Drobos. By the end of 2010, Barrall hopes his company will be on a run rate to achieve over $100 million in revenues sometime in 2011. The company is going to turn cash-flow positive — and profitable — in the first quarter of 2010, according to Barrall.
“And then (we’ll) go public,” he said. With sales growing and profits around the corner, I’m not surprised that this seasoned technology executive is thinking about an IPO. Much like the folks at Facebook.