Posted by Tom Foremski - June 23, 2005
It took four years and $150m of Larry Ellison's money for Pillar Data Systems to emerge from stealth mode with a data storage solution that could be disruptive to EMC, IBM, Network Appliance and others.
I spoke with Michael Workman, CEO of San Jose-based Pillar, about the long trudge ahead, the company's technology and its strategy. It is a market dominated by giants, and by an industry trend that favors providing broad solutions rather than focused IT systems.
The Pillar approach attacks IT costs through using one platform to manage and store all three tiers of data, from high availability Tier 1 data, to archived Tier 3 data that normally would end up on tape.
In the Pillar approach, everything is stored on inexpensive high performance commodity serial ATA hard drives, but on different sectors of the disk. Slower sectors hold Tier 3 data while the fastest sectors towards the outside edges of the disk are reserved for Tier 1 data.
The goal is to provide storage systems with Tier 1 to 3 capabilities for about the total cost of ownership of Tier 3 systems. This is accomplished by using inexpensive hardware within a single fail-safe platform.
The secret sauce
The heart of Pillar is a sophisticated software application of 2.5m lines of code providing essential data admin functions through a very simple user interface.
What takes sixty clicks to set up in an EMC system can take just 6 clicks on a Pillar system. And with headcount being the largest item in IT budgets, needing fewer admins is a key selling point.
Mr Workman has 20 years in the data storage industry, with 15 years at IBM and a dozen patents. He leads a veteran management team of former executives at Network Appliance, Conner, IBM, and Quantum.
Pillar Systems are in place at companies such as LeapFrog Enterprises, I/Pro and Thacher Proffit.
But building a market in the enterprise sector is tough work and expensive.
"Corporations typically take four to six months to qualify IT systems. And we must also make sure that we have a large customer support organization in place to support them," Mr Workman said.
In addition, Pillar has built a huge testing facility, costing more than $25m and comtaining 150 systems. Then there is the considerable expense of marketing Pillar within an IT market dominated by just a few large players, each able to offer more than just data storage systems.
$150m doesn't go too far in such a market, but Mr Workman said the company has Mr Ellison's wealth behind it and a long term multi-year road map. Funding is all from Mr Ellison's Tako Ventures, with no current plans for other investors.
Foremski's Take: The enterprise IT market today is all about scale and large vendors providing complete data solutions. Pillar needs partnerships with larger vendors and systems integrators to make its voice heard.
The company's software application, which sets up and manages a wide range of data storage requirements, is where the value of Pillar systems is clear. It is also a considerable barrier to competitors.
Requiring fewer IT admins is a message that attracts CIOs, and the lower hardware/maintenance costs are a nice bonus. But CIOs are also very conservative, and evaluation and implementation cycles can be lengthy. Maintaining a large sales/suport team during such times accelerates expenses.
Now that Pillar is out of stealth mode and into marketing mode, the burn rate is accelerating. Mr Ellison has deep pockets and understands the dynamics of the enterprise world, which should help Pillar.
Mr Ellison also brings attention to Pillar, which will save on some marketing costs. However, he is also a sometimes controversial figure, which may reflect on the way his companies are perceived by potential customers. A broader investment base would help mitigate any "Larry effect" and also bring in other cheer leaders.Tweet this story Follow @tomforemski