Exclusive Interview With Pillar’s CEO Mike Workman
Question: "Have you been approached by a potential buyer?"
By Jean Jacques Maleval | October 11, 2010 at 3:06 pmKey Facts and Figures on Pillar
Company
Pillar Data Systems
Location
HQ in San Jose, CA (and development office in Longmont CO), European HQ in Ireland, offices in France, Germany, Switzerland and UK
Founded in
July 2001
Financial funding
$400 million by Tako Ventures LLC, a private equity firm of Oracle’s CEO Larry Ellison that owns 85% of Pillar, the remaining being owned by employees
Main executives
- Mike Workman, chairman and CEO
- Nancy Holleran, president and COO (former VP of IBM’s WW customer engineering group and VP of technology development and product engineering at Conner Peripherals)
No. of employees
353 (55% in R&D, 10% in customer support) including 55 in Europe
Revenues
Around $55 million, never profitable
Product
Unified RAID NAS/SAN (FC and iSCSI) Axiom 600 with ‘brick’ architecture, built with the concept of QoS, with thin provisioning, self-tuning, pooled RAID-5 and -10, modular scalability, tiering at drive level (The surface of each disk platter is divided in four zones. High priority data is written on the outermost tracks where access time and transfer rate are better, while data with lower performance requirements is laid out on the inner tracks)
No. of installations
1,600 for 555 customers
Average capacity per system
Approximately 60TB
Average price per system
Around $140,000 , hardware and software included, without third-party products
Technology partners
Atempo, BakBone, Brocade, Cisco, CommVault, Emulex, FalconStor, InMage, Microsoft, Mimosa, Oracle, QLogic, Symantec, VMware
Known distributors
Bell Microproducts/Avnet, CMS Peripherals, Memodis, Qi ict, Rise, ServiWare, Synnex
Biggest customer
EMIS in UK (through VAD CMS Peripherals)
About Mike Workman, Chairman and CEO
of Pillar Data Systems
(Courtesy of CNNMoney.com, photo Michael Sugrue)
Dr. Michael Workman, 53, has a 25+ year background in the storage market, which includes positions as VP of worldwide development for IBM’s storage technology division, senior VP of R&D and CTO of Conner Peripherals, and VP of OEM storage subsystems for IBM/Mylex. He was director of the board at Komag from 2002 to 2007. He holds an M.A. and Ph.D. from Stanford University, a bachelor’s degree from Berkeley and more than fifteen technology patents. He was once cited in Forbes magazine saying, "I’m 5 feet 4. I learned on the playground not to hit someone 6’2". Workman owns a vineyard in California and authors of a blog.
Q&As
What’s your analysis of the battle between Dell and HP to get 3par?
So 3par is a next generation storage architecture, like Pillar’s, storage pool virtualized, and both companies needed to fill holes in their product line, and I think in the case of Dell, it was something that they were going into, something they wanted to do, whereas HP had an aging product line, or an OEM relationship, so it made sense for both of them. And I think once the bidding started it was a lot harder for HP to lose.
And the price?
Oh, the price was ridiculous. Everybody knows that.
After Dell failed to acquire 3par, which companies do you think Dell might target now?
Most of the guesses out there are ridiculous. For example, if you picked a NAS company, 3par fit a particular market segment. I think the only ones that make any sense to me, that also have a SAN, are Pillar, Xiotech and Compellent. If you separated into enterprise, and I’m really picky about how that word is defined, deterministic I/O behavior, scalability, etc.
Not Isilon?
Isilon, no, I mean that’s not an enterprise class, it’s not serviceable.
But you include Pillar in that list.
I knew you were leading me with that question. I said it made sense in terms of the same market segment. We compete against 3par all the time.
Has your company ever been approached by a potential buyer?
That’s an interesting question, yes, I can even answer that one. Yes.
Just once?
No comment.
Recently?
No comment. A lot of people are writing interesting things about that right now. (Editor’s bet: Dell)
Well, there’s another strong reason to acquire Pillar, and it’s the relationship with Oracle. Since Pillar is Larry Ellison’s company, how does he and how do you manage the conflict of interest and/or competition between Oracle/Sun storage and Pillar’s solutions?
That’s another great question. There is no conflict. We compete with them as often as we can, and happily. I love to compete against Sun, and Larry owns a lot of companies that compete with each other in the market place, and he loves competition. There’s no conflict there. My job as chairman and CEO of Pillar is to win, to serve my customers and win business, and that’s what we do everyday. So to me it’s not a conflict, I’ve never been given any conflicting direction other than go build the company and go win. And by the way, it is Larry’s investment, it’s not Oracle. He has a lot of shares everywhere. He has a lot of hats, he owns part of salesforce.com and everybody knows that and he competes with them every day.
What’s Ellison’s ultimate goal, to sell the company? IPO?
Plan A has always been to go public.
When?
As soon as we think that the time is right and the valuation is good.
What percentage of your systems uses SSDs?
Probably 10%, with units from Stec. It’s slow but it’s growing. In the future we will use them for cache.
What’s your roadmap for unified SAN/NAS Axiom products?
To keep adding speed, power, function, scalability and to keep enhancing all those things.
What’s the most spectacular thing you’re going to do?
The most spectacular? This year we’re going to be putting out a whole new Java-based interface that has dozens of extra features for our cloud providers. About 85 of our customers, we’ve had 555 to date, are cloud service providers of either storage as a service, or some kind of hosting, that kind of thing. And several of the big ones have asked us for a bunch of new functions that will allow them to administer large numbers of storage targets.
More in software than in hardware?
Oh yeah.
Primary de-dupe is not on your roadmap?
We have it today, but it’s not native. And so primary de-dupe is on the roadmap, but it’s about a year and a half off.
For de-dupe, which company do you work with?
We use FalconStor.
Who’s your largest distributor?
Bell Micro. Then Synnex and Memodis.
Who’s your biggest customer?
I think it’s EMIS. Egton Medical Information Systems. They’re the people that host patient healthcare records in the UK. They subcontract with the NHS, the UK National Health Services.
Your biggest customer is in the UK?
Yeah, why not, right?
How many day of vacations this year?
Probably ten days
How many bottles of wine will you produce this year?
I’ve already bottled, and it was 1,500.
Comments
Dell is tired since several years to have
to pay EMC each time to company sells a CLARiiON unit.
With EqualLogic’s acquisition, it now has a good product to convince its customers against low-end CLARRiiONs. But Dell needs desperately a higher-end storage system. Pillar’s Axiom 600 could be a good choice but the main difficulty will be to agree on the price to buy Pillar.
Per comparison Pillar is around four times smaller than 3par in term of revenues with roughly the same number of customers. Both of them never were profitable.
For the negotiation, Pillar is in not in a position as good as was 3par because we don’t see any other company trying to overbid, either EMC, HDS, IBM, NetApp or Oracle/HDS with Larry Allison in an uncomfortable position, being owner of Pillar and CEO of Oracle.
Remember that Dell first offered - only - $1.15 billion for 3par that accepted this amount before HP came outbid to finally being obliged to pay $2.3 billion. If Dell is the only firm interested in acquiring Pillar, the price could be lower than $1 billion, much lower. And on the other side, we don’t see Ellison accepting a small amount of money after having already invested $400 million in his storage start-up. At less than $500 million, it would be the proof of the failure of his U.S. venture.
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