Exclusive Interview With Paul Flanagan, President and CEO, Nasuni

Paul Flanagan, is president, CEO and board member at Nasuni Corp., a company he joined in March 2017 following 8 years as board member. He started Sigma Prime Ventures in 2012, being also at Sigma Partners (a Nasuni investor since Series A round), and had at least 10 board seats during last 15 years. Before that, among other positions, he was CEO of Rave Wireless, CFO of VistaPrint and CEO of StorageNetworks, starting his career in 1986 at Ernst & Young.

StorageNewsletter: Nasuni was founded in 2009 and has the original mission of the company changed overtime, especially since cloud was not at the same level both in terms of offerings and adoption as well as some of today’s file storage players didn’t even exist. What is the your value proposition today?
Paul Flanagan: Yes, the company and industry have gone through a series of changes over the years, however Nasuni’s core value proposition has remained the same. Our founder and CTO, Andres Rodriguez, started the company knowing firsthand that organizations, particularly global enterprises, were going to need a better way to manage their massive file data growth and that leveraging the cloud was going to be the key. When we first started the company, cloud adoption was in its infancy and most customers were hosting file storage on-premises and leveraging the cloud for certain use cases like archiving. As cloud adoption matured, we saw certain industries such as architecture, engineering and construction (AEC), manufacturing, and media companies, who needed to effectively share and collaborate globally on large files using Nasuni’s global file system with the major cloud providers. About 3 years ago, we started seeing mainstream adoption across all industries as IT started moving core infrastructure to the cloud to take advantage of the scale and savings it offered. Covid accelerated that even more in 2020 and 2021, and that’s when we were able to feel the full impact of perfect “product-market” fit. 

According to a recent IDC report, file services represent a significant market opportunity. Unlike traditional storage vendors or even other “born-in-the cloud” solutions, Nasuni is the only file data services vendor to leverage cloud object storage as our authoritative data source and a cloud control path for global file sharing. This gives us tremendous advantages over these solutions because we simplify how an enterprise migrates, manages, and protects its ever-growing file data while delivering on the economics, flexibility, and durability of the cloud.

In terms of figures, could you sharesome numbers to help us understand the size and footprint on the market of Nasuni? What about your ARR?
We are still a private company, but we do disclose some of our key market and company milestones each year around this time. In fact, we recently shared our 2021 results publicly. Our SaaS metrics are top decile compared to other publicly traded SaaS companies and we expect to hit a major ARR milestone in 2022.  We’re most proud of our customer retention rates of over 98%, expansion rates of 118% and the NorthFace ScoreBoard Service Award received in November because they represent our unwavering commitment to our customers’ success.

Nasuni raised so far $187 million. You belong to the Storage Unicorn club. This is the result of an acceleration of your market adoption, better recognition and technology leadership. Does it mean your next corporate step will be an IPO or a new round before this expected IPO?
We have actually raised $165 million in equity financing to date, and $85 million of that was brought in over the last 5 years of which more than half remains on our balance sheet as of December 31, 2021. We are very proud of the fact that we have grown over 6x during this period while at the same time remaining very capital efficient, and we are not in need of additional financing. We are first and foremost focused on building a strong, customer-focused company that is delivering world-class file data services that enable our customers to focus on their businesses. This will allow us to pursue whatever path we so choose while ensuring we can take care of our employees, our customers, our partners, and our investors.      

How do you see the market and especially the unstructured data market segment? New vendors appeared during the last few years, many workloads moved to the cloud thanks to a rich set of data services capabilities offered by AWS, Google or Azure, making the distributed enterprise is even more a reality.
The unstructured data market is moving to the cloud, where AWS, Azure, and Google Cloud are offering a wide range of data analytics services that help enterprises get more value out of their unstructured data. It’s hard to take advantage of the hyperscalers’ AI, ML, and BI services when your file data is scattered across silos of on-prem file servers and NAS devices. This is where we come in. Our ability to present a single namespace across all global locations, cache copies of actively used file data from object storage in each location for high performance read/write access, and keep all the cached files in sync so users and applications are always working on the latest versions is the core strength of our platform. In addition, the Nasuni Analytics Connector makes file data accessible to the cloud analytics services of an organization’s choice. This can only be achieved at scale if the data path and control path are both built for the cloud. And that’s not easy. Our platform is now in Version 9, we’ve been awarded numerous patents, and we’re proven at petabyte scale across hundreds of locations in some of the largest enterprises in the world. 

I mentioned earlier a potential IPO, but, as Nasuni became more and more ubiquitous with a clear shake of classic file servers positions and also ambitions from the top 3 cloud giants, I may be wrong but Nasuni in the catalog of one of these players makes sense, at least for me. Any comment on this potential exit?
One of the reasons customers love Nasuni is that we are a multi-cloud platform that adds value on top of the big 3 hyperscalers. We don’t lock customers into any one of them. And as I mentioned earlier, even if an organization picks one cloud provider to be the backing store for Nasuni, our Analytics Connector still lets you run analytics services from another cloud provider against the file data. Based on research across our customer base as well as independent sources, it is clear that the market will want a cloud independent, multi-cloud platform provider. The hyperscalers will certainly capture their fair share of the market, but customers looking to avoid cloud lock in and/or want multi-cloud flexibility, will want an independent platform, and we believe we are best positioned to deliver that in the market. Legacy providers do not have the right architecture to do this on their own and are forced to partner with the cloud providers, and other upstarts also do not have the right architecture. We believe we are building a very valuable independent company.   

From a product perspective, all data is stored in a central object storage, public or private, with your UniFS file system layer on top, coupled with the Orchestrator,  and your Analytics Connector, and then you have Virtual Edge Appliances also potentially deployed at central sites and finally the Management Console. You rely on a star topology with some aggressive fine granular caching techniques to propagate data and changes. What are the key differentiators against some direct file servers/NAS competitors?
Let’s talk about the first differentiator you named, our UniFS file system. With UniFS, all file data, metadata, snapshots, and even the inodes reside and scale in object storage. That means our platform can leverage the durability, unlimited capacity, and low cost of object storage from AWS, Azure, and Google Cloud. All 3 hyperscalers automatically make multiple copies of our file system in their cloud data centers, which gives us built-in advantages over direct legacy NAS competitors like NetApp. They require their inodes to reside on a much more expensive SSD performance tier that doesn’t have the same durability as object storage, so you need another instance running somewhere else for redundancy. They can tier inactive data to an object storage capacity tier, but as capacity grows, the performance tier will be used up by more metadata and inodes. So right away, Nasuni has a major scale and cost advantage. Our Nasuni Orchestration Center (NOC) is another big differentiator. The NOC, as we call it, serves as the traffic cop overseeing file caching, versioning, multi-site file synchronization, and global file lock. It’s a cloud service included as part of the Nasuni subscription that is infinitely scalable and highly available, with active-active pairs in major regions around the world. Other technology providers will use a global file cache technology, which is based on Windows servers that cannot match our highly available and performant cloud service. Again, scale, simplicity, and cost savings advantage to Nasuni. You also mentioned our Edge Appliances, which are lightweight VMs that cache copies of active data from object storage and deliver high-speed file access through standard SMB/CIFS and NFS file sharing protocols. Our customers run Nasuni Edges wherever they need access to our global file system. Often, our Edges run on-premises on our customers’ existing virtual infrastructures. We’re now seeing more Edges run in the cloud in different AWS, Azure and Google Cloud regions. Our efficient caching algorithms are such that each Nasuni Edge only needs a small amount of high-performance disk storage to service almost 99% of file read requests. So, customers can reduce their file storage hardware footprint up to 98% without paying any performance penalty and without paying high egress fees to access data from the cloud. What’s also unique is that Nasuni Edges are stateless – if one goes down, you don’t lose anything, because the entire file system is protected in object storage. You can have a Nasuni Edge up and running in less than 15 mn, so there’s no longer any need for costly duplicate NAS infrastructure in other data centers. Another big advantage Nasuni has because of our cloud-native file system.

… But also against distributed storage players who address ROBO deployments like Nasuni?
We have the same advantages we discussed above over all the distributed storage players, too. Nasuni is the only vendor that started with a file system designed for cloud object storage. And then we cache to the edge only the file data that is needed. All others started with file systems designed to live on hardware controllers and simply use the cloud as a backup target or a tiering target, so they don’t tap the full scale and cost savings advantage of the cloud. Or, they started out as enterprise file sync and share technologies with peer-to-peer replication architectures. With Nasuni, file system changes on each Nasuni Edge are first committed to AWS, Azure, or Google Cloud object storage, so that is the system of record. Then, changes are propagated to all other Nasuni Edges caching the same file data, all orchestrated by our cloud-based NOC. This hub-and-spoke architecture and cloud orchestration service are what enable Nasuni to scale to any number of ROBO sites and any amount of file data, without the limitations and high costs of the other distributed storage players. 

Could you explain the global lock mechanism as it is one of the key elements in such an approach?
The goal of file locking is to prevent version conflict when more than one user wants to work on the same file at the same time. If one user opens a file and starts editing it, other users who try to open the same file will be alerted that the file is already being edited, and they are given the choice to open the file read-only or create a local copy. You can imagine how valuable it is to have this capability for enterprises that have users in many locations collaborating on CAD drawings, images, and other types of files. The amount of productivity that is lost due to version conflict can be enormous. Nasuni Global File Lock basically extends file locking from a single file server or NAS device to all locations around the world. The only way to do this in a highly scalable, highly available, and high-performance way is as a cloud service. That’s what we’ve done. To give you an idea of the scale we can provide, in 2021 our NOC processed more than 50 billion lock requests with no downtime. Imagine trying to deliver that level of scalability and availability without the cloud.

Obviously Nasuni has some comfort zones, but we see an extension of your original use cases. What are your target ones and what are workloads where you excel?
Our comfort zone is any workload an organization has on a traditional NAS device or file server. Nasuni is going to offer a modern, cloud-native alternative that will be simpler to manage, will offer unprecedented data protection, even from ransomware, and ultimately save organizations both time and money. We have customers coming to us to replace an end-of-life NetApp FAS, Dell Isilon, or Windows file server in one location so they can start their journeys to the cloud. We have others coming to us to consolidate file storage in multiple locations and make ROBO file infrastructures easier to administer and scale. And we have others coming to us to streamline multi-site file sharing workflows and improve collaboration around CAD and BIM files, Adobe creative content, video game builds, and other project-oriented file types. Lately, we’ve seen an increase in use cases around machine-generated file data, which has the potential to grow at a faster rate than human-generated file data.

I understand you finally merge or replace primary and secondary file storage with your approach, so an easy question: how do you protect data? Do you rely on back-end object storage but I’m sure you have added other key features like CDP, versioning, etc?
This is a major competitive advantage that I didn’t touch on earlier, so I’m glad you brought it up. Another feature of each Nasuni Edge is to periodically take a snapshot of any local changes, compress them, encrypt them, and send them to the customer’s chosen cloud object storage where they are stored as immutable versions. We call this Continuous File Versioning. Customers control the snapshot frequency and schedule. Because we’re only storing the delta changes in low-cost object storage, many of our customers choose to setup a very frequent versioning schedule, as often as every few minutes. This is a massive recovery point improvement over traditional file backup, which is typically once a day. It’s also a big improvement over traditional snapshot technologies that store snapshots on expensive disk, which limits how long snapshots can be retained before they consume too much of the primary storage. So, not only does Nasuni eliminate the cost and complexity of primary NAS and file servers, but we also eliminate the need for file backup software, media servers, on-site backup storage, and off-site backup storage. Again, because we store every snapshot as an immutable version in object storage, the hyperscalers will make a minimum of 3 copies. So, our customers are improving the availability of their backed up data, gaining up-to-the-minute recovery points, and increasing recovery times, too. All without the added cost of backup and snapshot infrastructure. That’s why our customers tell us at every user group meeting, “I love not having to rack and stack hardware anymore to deliver primary file shares, but what I love most about Nasuni is I don’t have to worry about backing up my files anymore.”

This question is a transition to ransomware protection. Do you address this need and how do you solve that challenge?
Yes, our rapid ransomware recovery capabilities are definitely accelerating Nasuni sales. There are 4 big advantages that Nasuni Continuous File Versioning offers for ransomware protection. First, we store all versions as immutable, WORM objects in cloud object storage. That means they can never be overwritten or infected by ransomware, so you know you’ll always have a healthy version of a file, file share, or volume to recover. Second, your recovery points will be minutes instead of days. For example, if ransomware strikes at 2:58pm on Friday, you can restore the snapshot from 2:55pm and your users won’t have to recreate a week’s worth of data, like they would if the last good backup was Sunday night. Third, recovery times are much faster, even for large amounts of data and we have demonstrated Nasuni restoring a million files and a petabyte of data in 37s. We aren’t defying the laws of physics. It’s just that our architecture doesn’t require all the data to be moved from backup storage to primary storage. All we have to do is move the file system pointer to an earlier point in the version timeline, and re-cache just the versions the users need. And fourth, because our customers can store snapshots forever on low-cost object storage, there’s no limit to the number of versions you can restore to. That means our customers can recover even from “patient” ransomware that may have been lurking undetected for weeks.

You announced Global File Acceleration (GFA). What is it and what gains users can expect?
GFA is now generally available and in use by customers, and it gives Nasuni the fastest file synchronization speeds in the industry. A big advantage of having a global file system that lives in the cloud is that we can audit file system opens, writes, and renames on Nasuni Edges in all locations. GFA is a cloud service that applies machine learning to these file system audit events to determine which Nasuni Edges in which locations get newly created files first. By intelligently prioritizing data propagation, we’ve seen file synchronization times even in large multi-site deployments drop to an average of 30. So, if users in Los Angeles, Houston, and New York are collaborating at the same time on the same file share, they’ll see new files almost as soon as they’re saved.

Let’s speak about your go to market strategy, globally and in different geos?
Partners are a big part of our go to market strategy in all geographies. AWS, Azure, and Google Cloud are key partners for us. Nasuni drives significant consumption of their object storage. As more Nasuni Edges are deployed in the cloud, they see us driving compute and high-performance storage consumption as well. The Nasuni Analytics Connector drives greater use of their analytics products. This is why Nasuni is available in all of the public cloud marketplaces, and why we’re a managed partner with top tier access to support, developers, and product management. Channel partners are also an important piece of our go-to-market strategy. They see Nasuni as a way to offer their valued customers a strategic path in moving to and leveraging the cloud. We continue to ramp up our own Nasuni field teams throughout North America and EMEA to support this partner-led strategy, investing in sales enablement and training to arm them, and investing in marketing to provide air cover. 

And what about your pricing model?
Nasuni is licensed as an annual subscription based on usable capacity. We offer single site, multi-site, and multi-site with global file lock editions. As part of every deal, we equip our partners and customers with a value proposition that compares the cost of Nasuni and cloud object storage to the cost of any other alternative. That ensures the correct apples-to-apples comparison is being made.  For example, when customers look at the cost of new NAS in primary and DR sites, snapshots, file backup software maintenance, backup servers, off-site and on-site backup storage, and remote access infrastructure, they quickly see that Nasuni costs up to 50% less. And that’s not including the IT efficiency gains from simpler management or the user productivity gains from faster file synchronization and faster file recoveries. We do the same value comparisons for other cloud solutions as well, where we often show an even greater cost benefit.

To conclude about the future. I heard about Nasuni Labs. What is it and what do you have on your roadmap?
We’re very excited about Nasuni Labs.  It was born out of our strong customer community who love to collaborate and learn from each other. This new open source community that’s been launched on GitHub gives our customers the opportunity to use integrations that have been developed by other Nasuni customers as well as Nasuni engineers and there is no charge for these tools, aside from any cloud costs that may be incurred. We have a comprehensive REST API that’s included with the Nasuni platform, and Nasuni Labs lets customers tap into the power of the API to use Nasuni as an extensible platform for file data services. One of our first Nasuni Labs projects is a scheduler for the Analytics Connector that lets customers more easily search and analyze their file data using cloud analytics solutions like Amazon Kendra and Elasticsearch  to meet compliance and regulatory needs. Another project is called Edge Appliance Automation, which enables IT admins to orchestrate share mapping, volume creation, auditing, quota configuration, reporting, chargeback, and more from scripts or third-party workflow solutions. Stay tuned, we expect to see a fast rollout of more Nasuni Labs integrations!

And finally, a personal question: what accomplishment are you most proud of in your role leading Nasuni?
That is an easy one – two things: First, delivering world-class customer satisfaction. Every week we review the quality metrics associated with our software as well as the customer satisfaction scores for every case closure and are proud of the quality of software and service we deliver across the board. Financially, you see this in customer retention and renewal rates. But the real pride kicks in when you attend our customer user conferences and get live feedback on how much customers appreciate what we do for them both from a support and product innovation standpoint. The second thing I am most proud of is our team. We try every day to foster an environment where our employees are appreciated, are challenged, and can learn and develop as individuals. I have been around the sun quite a few times, but it still always amazes me to watch folks’ step outside their comfort zone yet continually respond to the challenge and deliver results that surprise even them. That is awesome to watch. We have great customers and a great team here at Nasuni who deliver for them every single day.