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Q&A: StorageNetworks' Dew point

Just months after announcing a strategy shift that will transform it from a pure-play storage service provider to a company that makes selling software its core business, Waltham, Mass.-based StorageNetworks hired former BMC Software executive David Dew to be the company's new chief technology officer. Dew, who has a strong background in software development, reports to Paul Flanagan, who is chief operating and chief financial officer. Dew replaces Bill Miller, StorageNetworks' co-founder and former chief technical officer.

STORos, the software that supports the company's storage management applications, and STORos StorageManager, a policy-based storage management application with integrated backup reporting and administration, are now the company's core products.

These are solid products and a good strategy shift for StorageNetworks, analysts say. But the company faces the challenge of trying to find financial traction in a tough IT spending economy.

Dew doesn't seem daunted by the challenge and, in fact, appears eager to get things moving along. Here he talks with us about how he plans on making this new strategy work.

Who else has come on board since you began marketing this product?
Customers like Merrill Lynch have moved over to using the software themselves. The software has only been available since early summer. We'll [start adding new customers] as we compete longer in the marketplace. Why would anyone take the risk to invest in this product?
If you look at our financials, we have $250 million in gross cash. We have a lot of people that know storage. If you look at is as a pure start-up, it's the most well-funded company you've every seen.

We have staying power. We're investing in the right technology. We're building a sales management team with a strong emphasis on software. We also have very strong financial leadership. Where is StorageNetworks taking this product?
Everyone is looking to create this type of utility model in their business. [They're looking to do] chargeback, data protection, provisioning management, etc. They're looking for capacity-based, performance information. StorageNetworks [because of its service business] is managing a petabyte of storage [with this product]. We have a lot of insight to do that effectively. We're maintaining that business, but it's no longer a growth area, so we're using the software in that business [to build a new one].

This is a huge piece of intellectual property that we have. That's a big advantage for us -- a large proving ground -- managing 40 data centers. We're managing collectively about what a Wall Street bank would.

Company offers new version of STORos StorageManager

StorageNetworks has just released version 5.2 of its STORos StorageManager software. This version has improved visibility, enhanced chargeback functionality and more expansive heterogeneous support, the company said.

The Waltham, Mass.-based company introduced the first version of STORos in May, when it also announced it would shift its focus from that of a service provider to that of a software provider, making its proprietary operating system its core product.

STORos StorageManager v5.2 is designed to give users greater capacity to assess their ability to recover in the event of an outage through enhanced backup reporting. The software upgrade also extends the support of heterogeneous hardware, firmware and software for vendor technologies from EMC Corp., Network Appliance Inc., McData Corp., Dell Computer Corp. and Hewlett Packard Co.

What about investing in technology?
There's a lot of businesses out there with good product but, unfortunately, [they] won't see the light of day simply because they don't have the resources. We'll be looking at those companies. What other areas will you focus on?
Storage resource management. At this point, what's your biggest obstacle?
It's time-to-market. We have to have the right product for the customer at the right time. Nobody in this space is sitting still. There are other products that are getting stronger and stronger. Customers will buy a product that will solve their problem. They don't have the appetite for buying suites of products. We're going to take a different tack. We're going to focus on our core competency. That's why you see products like TrelliSoft [an SRM vendor] making sales in this product. They address a specific problem. StorageNetworks has always had an incestuous relationship with EMC. Are you still competing with EMC?
You're always going to compete with them. EMC's solutions are very good -- for a shop that's all EMC. EMC is going to say they're heterogeneous, but the solution isn't going to be as good as if a shop was using all EMC products. There's always going to be a layer of proprietary management software. We're not going to try to displace that.

There's a lot of room in this market for the products that solve the problem. It's hard to master that when you have that huge breadth of product like EMC. We're going to go deeper. Who are your customers?
EDS is a major customer. We've packaged the storage for external use so they can create their own utility. What are some of the companies you're looking at?
We're going to focus on what our customers are buying today. They're buying lots of backup solutions-- products that are insurance-based. We're going to be [looking at companies that focus on] replication and management of that recovery process. Users are also looking to cut costs, so we're focusing on that basic labor level.

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