‘Software biz to put HP in good stead’

Bill Chambers, founder president, LeftHand Networks, loves mangoes. Not surprising as the serial entrepreneur’s first venture as a teenager was peddling the fruit in the neighbourhood in South Florida. He went on to set up four startups and sold one of them to General Electric. Then he set up LeftHand Networks, a company that developed the industry’s first IP-based storage area network (IP-SAN) solution. He sold off the nine-year-old company to Hewlett Packard in a $360 million deal late last year. That HP went on to pay up the agreed price despite the crash in valuations all round, speaks volumes of the company’s value proposition. Chambers has now settled for a full time engagement with HP as vice-president, StorageWorks Division. He spoke to DNA on the value that LeftHand brought to HP and the latter’s future in software. Excerpts:

How is the integration process between LeftHand and HP going on and how long will it take?
One of the things that I give HP a lot of credit for is that they are good at integrating. I was a serial entrepreneur prior to this, I sold my business to General Electric, and I can say they know what they are doing. It’s a year-long process and what HP is doing is to ensure that they get the returns on investment. We have quite a large team dedicated to it looking at the entire spectrum.

Considering that it paid the agreed valuation for LeftHand despite the economic slowdown, the company you set up should be having a compelling proposition for HP. Why is LeftHand so important for HP?
The importance of LeftHand to HP is on several counts. The first is that it fills in a key hole we had in the product portfolio. At HP, we had a gap and we were trying to stretch our EDA product down and stretch our MSA product up. But more importantly, when you look at it from the growth perspective, HP did not have a good product to capitalise on the new emerging market that LeftHand had pioneered, which is refered to as IP SAN. That is the fastest growing segment today. HP did not have a solution and LeftHand did. And that is what brought us to the table. Another thing that I will share with you is that unlike many solutions that use custom silicon and a lot of specialty components inside, our solution leverages industry  standard components as a result of which our gross revenues are very high, almost one and half or two times.

HP has a lot of proprietary technologies and opens standards may not fit in always. Your take on this.
We see that there is a big opportunity for HP to sell services. The biggest trend today is server and storage virtualisation. Now HP has all the services to help customers do it and deploy server and storage virtualisation, for both small and large clients. So, the key element in a competitive landscape is that customers are looking into entering next generation data centre technologies. They are stepping back and realising that what has worked for them till now, may not work in the future. So from HP’s point of view pushing traditional systems may not actually work. That is where we come in with our open standard expertise.
 
There is also this contrarian view that while virtualisation is the future, customers are also looking at buying direct attached systems (DAS), for speed, cost and security. How would it affect HP?
What’s interesting is that, one of our portfolios is a product that offers customers the opportunity to pool in their DAS systems, it is called the Virtual SAN Appliance. So you are right, it’s happening. Drive technology can be serial interfaced with drives of the past with high performance. Customers are choosing it as it helps them increase performance using the same software pack as we use in our lego blocks.

So both the things are happening simultaneously?
Yes. What’s interesting is that both — the virtual and physical — can be used at the same time in the same environment. That is because the technology that powers them is our SAN IQ appliance.

Software was one of the main drivers for LeftHand. What will be its position after HP’s acquisition?
The software is the special intellectual property that makes the system unique. But it is typically sold as a system. When I tell you we sold a storage node, which I refer to as a lego block, you are buying a system which is an industry standard X86 system, but made unique by the software that is embedded in it. In most cases, you are not buying the software separately unless you are buying a virtual SAN appliance.

When most customers today think of storage, they are thinking of a special storage system or a box. In the future, my prediction is, when customers become more and more aware of capabilities of software based virtual SAN appliance, maybe five, ten or even three years from now, they will realise that they can do with software and standard hardware, what could be done with specialised product before.

Going forward, I see the software side of business becoming a larger part for HP. A majority of the business today is largely hardware driven as more physical storage systems are sold. But this will change. A convergence strategy is woven around the data centre between computing, storage and software that will be the key drivers for its push.