Exclusive Interview With John W. Thompson

John Thompson’ Profile

 
Born April 24, 1949, in Fort Dix, NJ, John W. Thompson, enjoyed a 28-year career with IBM, ending up GM of Americas before becoming CEO of Symantec. He is presently the chairman of Symantec and CEO of Virtual Instruments since June 2010.
 
He joined IBM as a sales clerk. By 1975, he was promoted to the marketing manager (Atlanta), was transferred to Boston in 1979 where he was assigned the duties of regional administrative assistant. In 1984, he was made an assistant to the CEO. He continued to work in the company until 1999.

During his tenure as CEO of Symantec from 1999, he was the only African-American leading a major technology company. He retired from his Symantec’s CEO post on April 4, 2009, turning the company’s reins over to long-time Symantec executive Enrique Salem but retaining his position as Symantec’s chairman.

In September 2002, President George W. Bush appointed Thompson to the National Infrastructure Advisory Committee to make recommendations regarding the security of the critical infrastructure of the United States. In addition, he has served as the chair of the Silicon Valley Blue Ribbon Task Force on Aviation Security and Technology to identify and evaluate technology-driven solutions to improve the security and efficiency of national and local aviation. In January 2009, news sources reported that Barack Obama was considering Thompson to fill the Commerce Secretary post in his administration. Thompson was a strong supporter of Barack Obama’s campaign during the 2008 election cycle. Ultimately, Senator Judd Gregg was chosen for the post but withdrew his name on Thursday, February 12. Thompson again remained a potential candidate until the appointment of Gary Locke.

Thompson purchased a 20% share of the Golden State Warriors NBA team in 2005 along with three other Silicon Valley businessmen under the umbrella of the Bay Area Basketball Partners, L.L.C. that sold last November their interest in the Warrriors.

In April 2006, Forbes published a list of the most highly compensated CEOs. He was ranked #8 with a total compensation of $71.84 million.

He received a Bachelor of Business Administration from Florida A&M in 1971 and a MBA from the Sloan Fellows program of the MIT Sloan School of Management in 1983.

He is currently at the board of Symantec, JovianDATA, UPS and Seagate.

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Q&As

StorageNewsLetter.com: What is the former CEO and current Chairman of Symantec doing at a tiny company like Virtual Instruments (VI) in such a niche market?
Thompson: Well, as I was contemplating my retirement from Symantec, I thought what I would do is invest in a number of small companies, and VI became one of the three or four that I invested in…

You’ve invested in other companies before…
Yes, a little company called Liquid Robotics, which is an ocean-going autonomous crone company. Another one called JovianDATA which is in the online data market analytics business, so I had 3 or 4 little things set up. But I’d been fascinated by the technology and convinced that the people who were behind it are in fact good people as well. You bet on people, not just on technology, you have to have the right combination of those two. So when I chose to invest in VI, I was convinced that the notion they were working on, while it may appear a niche to you, so did anti-virus technology appear to be a niche in 1989. And I think the good insight that comes from investors comes from looking at market trends, and trying to figure out what are the downstream opportunities that accrue from those downstream trends. And I would assume a lot of people missed the downstream opportunity associated with distributed client server computing, which was distributed systems management, which is today now a $15 to $20 billion business. A lot of people in the 1997-98-99 time frame probably thought, ‘Huh. Web enablement, that’s a great thing.’ They weren’t paying any attention whatsoever to the security problems and exposures that web-enablement was going to create. And today that’s a $20-$25 billion business in the security space. And I argue that as we virtualize the infrastructure, as we move more computing to the cloud, performance management, availability management, tools that help you optimize that environment, while they don’t look sexy, they will become critically important, just like distributed systems management did, just like malware detection and anti-spam did, and I believe these technologies will as well.

But there’s a difference between investing, even being chairman, and becoming CEO.
There is a difference. I did not intend to be the executive, but the company hit a spot where its performance wasn’t quite what we as board members expected, so I stepped in to try to help out, because I was an investor and had a vested interest in the success of the company. To my surprise, the board wanted to me to do more than just step in part-time. I’m old, but I’m not decrepit, and I wanted to keep my mind active and help the team, so I agreed to get involved. One of the things I discovered right away was that we needed more funding. And you can’t very well go to the venture capital community with a company that has a great idea but no leader. And so, I decided fine, if having someone like me to say ‘I’m the leader of this company, and we need $15-$20 million to keep it going,’ I was willing to do that for the company and the idea that they’re working on.

What’s the total company funding today?
Well, we just raised in the September quarter $22.5 million from between a combination of Lightspeed Venture, Next World Capital and existing investors. That was our C round.

Entirely?
Just under $40 million, around $38 million.

What was your total compensation before you gave up the CEO’s spot at Symantec compared to VI?
I make zero from VI. I take no salary at all.

And from Symantec?
Oh, I don’t know.

I saw the number $7,025,792 for FY2009.
Is that all?

And as director of Seagate, you received compensation of $203,243 in 2010. You have no comment.
I don’t count… from my vantage point, what you’re compensated is a function of the results that you’re able to drive or accumulate over the years. When I joined Symantec in 1999 it had a market cap of about a billion dollars. Today it has a market cap of about $14-$15 million.

I didn’t say you stole the money…
But to be fair, I do not take a salary from VI. I am a mercenary. I’m here to get something done.

When Symantec bought Veritas, there were big hopes about the marriage of storage and security. Why didn’t that happen?
Well I think what is clear today, particularly as we make this transition to the cloud, is that you can’t secure the world without moving security closer and closer and closer to the information itself. That the idea that you can protect valuable information just by protecting the network or protecting the PC has been proven to be false, so if anything, the conceptual idea that we had around Veritas and Symantec has been proven correct, and it will be proven even more correct as more information and access moves to the cloud. There are two big issues in cloud computing that people have to worry about. The first of which is security, that’s both information security and individual authentication. And the second big issue is performance and resource optimization, and I was in one business, and I’m now in the other, so I must have some intuitive sense about what’s going on in IT.

Do you think it would be a good idea to separate these two businesses at Symantec, as has been rumored?
That’s not my call, that’s the call of the new CEO.

Yes, but the board would be involved in such a decision.
If the new CEO were to bring a recommendation, we would certainly listen to it.

Looking at the latest financial figures from Symantec, this company is not growing …
Is this about VI?

Yes, I will come back to that, but you know, you’re a major guru in this industry as the former CEO of Symantec, and I have a few questions about that first…
Okay.

Looking at the latest financial figures for Symantec, this company is not growing in security as well as in storage. What do you think of the management style of your replacement, CEO Enrique Salem?
Well, Enrique is my hand-picked successor. I had groomed him for the last three and a half or four years to take over the reins of Symantec, and I am confident that he can in fact lead Symantec back to a period of growth. Symantec’s business has hit two interesting soft spots. One, our storage-related business was very well-connected to Sun and Oracle, and with the purchase of Sun by Oracle, a very significant portion of our revenue stream literally dried up overnight. So there’s a clear place to point to see the problem and go work on the problem. On the security side, we’ve had some fits and starts with our enterprise security business, but it’s still the largest security business in the world, it is a four and a half billion dollar security business, more than twice the size of any other security software company in the world. And so there is a point where you reach a certain size or scale where growth is harder to come by. And in the malware detection market today, there is a significant of new penetration going to free products as opposed to fee-based products, and therefore Symantec is under the same stress that other fee-based companies are for market share gains by what’s called the “Freemium” players. But I am a 100% supporter of Enrique Salem.

Since you’re on the board of Seagate, what’s your opinion about the company failing its attempt to go private or to be acquired by WD?
Well, the privatization process was all about private equity sponsors giving the board assurances that they could get a deal done at the right price. Seagate is a company with an awful lot of resources on its own, and if the board, me being one of them, did not see a price from the private equity firms that was an appropriate return for our shareholders, with a degree of assurance that that transaction would get done, there was no reason for us to continue to consider it. And our first duty as board members is to the shareholders to make sure that they get fair value for their interest in the company. And it was our opinion that fair value was not about to be considered or offered, therefore we broke off with discussions.

What’s does VI really do, in simple terms? Because it’s really not easy to understand.
Well our company, in its simplest form, monitors the performance of any complex computing environment.

Storage or not?
With a very specific focus on the SAN and the storage arrays that are behind that network.

Which means that you don’t do anything with Ethernet?
That’s correct. We are a FC SAN-focused company. And as is always the case in my almost 40 years history in this industry, early-stage companies do very well when they pick a technology niche and take full advantage of it. And once they get enough size and girth to them, then they expand from their core roots. And our core is FC SANs.

No NAS?
No NAS. No iSCSI. No FCoE. None of that. FC SAN. Now we have a product roadmap that will give us an ability to not only support higher performance transfer rates, but also different and new and expanding protocols. And that roadmap will unfold over the course of the next few years, as our company continues to garner more and more success in the market place.

More precisely, how do you test each piece of hardware?
Well we have a lab that is full of new and old equipment.

Do you need a special driver for each individual piece of equipment?
No, you can simulate some pieces of equipment in the lab, others you have to have the actual piece of equipment in the lab. And so it’s a combination of simulation techniques and equipment that we get from the switch manufacturers as well as the storage manufacturers. Sometimes we buy it, sometimes they loan it to us, more often than not we have to buy it.

Do you need agents?
No, we do not have an agent. And that’s one of the beauties of our technology. We put no degradation on the performance of the infrastructure. So we have a set of probes that read SNMP traffic, read the light signal and provide analytical capability as the data is flowing through the systems themselves. So as you send a call to a switch, we read the switch data, we don’t interfere with the traffic at all, as you send that call on to the storage array, we have a tap, and we take a piece of the light, and we send that piece of light to the probe, we never interfere with traffic at all. So we add no latency or degradation at all.

And is it in real time?
It is real time.

You get all the data into the infrastructure… and then?
We pass it to a product called VirtualWisdom, which is our analysis tool. And what it is looking for is, it’s reading the FC header. It’s reading the information that is coming from the storage array about the round-trip performance of a request. It’s looking at the request that might be coming from the virtual server, I now know where the points of intersection are, as this request moves up and down the chain. And what the analyzer does is to make a determination as to whether or not the load is balanced properly, whether or not you’ve got too many requests going to one particular channel. It makes a determination as to whether or not your backup and recovery connections are functioning properly. It even makes a connection or helps you with the analysis of whether or not you have too much tier-1 storage, in other words, very high-priced, high performance storage, when you could have cheaper storage. So there are a lot of things that VirtualWisdom as a tool does to help a storage administrator or an infrastructure leader manage that environment.

Since you’re in this business, I would assume you know the main issues with SAN?
Well the number one problem with the SAN today is that it has grown beyond the complexity level of the design architecture. The design architecture of many years ago assumed fewer servers and fewer petabytes, or actually gigabytes of storage behind the switch. And today what we’ve got are some of the largest customers in the world running SANs that are literally thousands and thousands of ports against petabytes of data. And that complexity without visibility creates all kinds of performance and availability problems for them. And so what our products do is give them real visibility with what’s going on in the SAN so they can tune performance, so they can optimize availability and keep systems up and save money in the process.

Does your company have any consulting activities aimed at fixing these problems?
Yes. So one of our most often-used tools for meeting with customers is something that we call SOS-4-SAN. It is a consulting engagement where a customer might have had an actual outage, where the SAN fell over, and we’ll go in and we’ll use our analytical capabilities, both for hardware and software, we’ll plug them into their infrastructure, and we will give them a sense of what they could have done to have prevented that outage. And often times, that discussion leads to the procurement of our technologies. A good case was back in April of last year, a very large U.S. bank had a major, major outage. They called us in, we did an assessment of their environment. In December of last year, they did a $7 million order with us.

What’s your business model for distribution?
We are a direct demand generation organization. In other words, we have direct sales people systems engineers in major markets around the world, and we are supported by channel partners. So we’ll have HDS or a local VAR or reseller that will help us with the distribution side. But we are a very high touch sales operation. The typical transaction size will be between $300,000 and $500,000 for a new customer.

Don’t you think that FC could be replaced by 10GbE?
I’ve been in the industry for 40 years, and I can remember when client server computing was introduced in the early 90s. And people said the mainframe was dead. Need I say anymore.

There were some product that died…
Are PCs dead, now that we have iPads? I think it’s perhaps catchy to declare these things dead.

The first IBM network… what was it’s name. Token Ring.
Well Token Ring disappeared because Ethernet out performed it. Ethernet proved to have superior performance.

But GbE has more users.
You’re confusing what we do with the network. We’re inside the data center, not outside of it. There’s a technology that’s evolving called FCoE. It will perform at 10Gbits. And our roadmap has us supporting FCoE. Because guess what, it’s FC, so it’s the same protocol, but over a different transport mechanism. So don’t assume that this transition to the extent that customers move there is going to render us obsolete. Not at all. Because we’ll move our technology just as the market moves. And just as there are still mainframes today, running mission critical applications, there will still FC-attached storage for many, many years to come that we can sell into, building a strong business.

Today you can design a complete storage system with Ethernet only.
Show me a large enterprise environment that’s doing that. You can’t. The largest companies in the world, one, their mission critical applications on a FC-attached server.

I’ll give you just an example, HPC, using IB.
They may be, but not for their most mission-critical applications. Every large company’s got a little bit of this and a little bit of that. I’m focused on global 2000 and the most critical time-dependent, time-sensitive applications they have. So there might be one that is running IB completely. I doubt it. They may have some little question that they’re running on IB, but not their whole business.

What do you do with your money?
I count it.

For how many more years do you intend to work?
I don’t know, I mean I had not planned to be working at this stage, I had planned to be retired, but what I realized when I did retire was that I was bored.

Your hobbies?
I like to hunt and fish, I have a collection of old cars and new cars, I’ve got lots of interest there. I love my wife, and we like to travel and we love to come to France. We were here 3 times last year, we did a wine tour Burgundy. I did a speech and we spent some time in Aix-en-Provence last summer, and then there was one other trip when we were in Reims in the Champagne district.

How many days of vacation did you take last year?
Two?

Two days?
I don’t think about vacation.

No, but official vacation days. Not being in Paris for business.
I mean last year I took a trip in the Spring to Paris, I took a trip in the Summer to Aix-en-Provence, then to Montreux to the Jazz festival. But in each case, I met with these guys, my French team, because I stopped off here and had just been appointed CEO of VI. Was I working or was I on vacation? I was clearly working, but I was also on vacation. My life is such that vacation and work blend together. I will be done here this afternoon, but tomorrow is Saturday, I will be on the phone half the day tomorrow on conference calls. That’s just the nature of the business that I’m in, and the life that I live. When I have to take time, I take time. We have a home in Hawaii, and I took 10 days over the Christmas holidays and went to Hawaii, and had a wonderful time with my three grandkids there with me…