Belluzzo Discusses Quantum Data Protection, Microsoft Storage Strategy

CRN: Why Quantum? What attracted you there?

Belluzzo: As I look back over the years at the work that I've had, and what I've enjoyed the most, I've always enjoyed being able to lead an organization, build a business, take something that has got promise and opportunity, and provide the leadership to make it become a reality. And I looked at Quantum, and I felt that Quantum had many attractive elements to it. I think the size [could be scaled to be able to do something significant. I think that the storage business, especially our focus on data protection, has a lot of promise.

CRN: What do you mean by data protection?

Belluzzo: First of all, when you look at the marketplace and you look at the technologies and the products that people use to back up, restore and archive their critical assets, their data, that is actually a very large market. It's growing rapidly. If you look over the next several years, it's a $30 [billion to $40 billion market, if you consider everything. . . . Customers are increasingly focused on their data protection needs. We have seen many events recently that have put more pressure on companies [to have a reliable, cost-effective way to protect and store their data. And we also see this as the area [where customers have the most frustration in terms of the operation of their data centers.

To Quantum, that all means opportunity. Opportunity to innovate. Opportunity to take our technology, our history in tape drives and tape automation and continue to build products and solutions. As we partner with resellers, as we partner with OEMs and others, we can take that technology and bring it to the marketplace.

CRN: Is this something coming down the road at Quantum, something new that Quantum is planning on bringing out, or is this something that's ongoing?

Belluzzo: There are three pieces to the business, some of which have been around for a while, some of which are new. The first is tape drives and media. We really want to be the undisputed leader in midrange tape. We recently did the Benchmark acquisition. We recently introduced new road maps. And we're doing a variety of things that really extend our position. Because tape, in any architecture that people talk about for the future, continues to have a very important role in archiving and the backup process.

Our second business is tape automation. We've built a very broad product line, among the most significant, with the most breadth, in the industry. We see a great opportunity to continue to grow that business and gain market share as we continue to strengthen our products and build better channels and distribution for those products.

The third area is what we call enhanced data protection. In this business, we're looking at doing some more innovative work. We've recently introduced the DX-30, which is a disk-based product that basically takes inexpensive hard disks and software and allows customers to implement that in their infrastructure in a seamless way. It looks like a tape library to the system and allows people to shorten their backup window, improve their restore time, and later take their information and archive it to tape. This is an example of an appliance-like product that you'll see more of from Quantum.

CRN: How do Quantum's three businesses fit in with the company's channel business vs. its OEM business?

Belluzzo: I usually draw this as a pyramid. If you start at the bottom with the tape drives, [they are today mostly an OEM business with some channel business. Today, the tape automation business is a little more balanced, where we have some OEMs and some channel business. In fact, our channel business is growing quite significantly, and we see that the channel is quite important at the tape automation level. Then when we talk about enhanced data protection, we see that as being primarily a channel business, because these are products that need services, that need a process for people to sit down with customers and implement these new solutions.

CRN: Will Quantum be looking to bring in more solution providers as a result of the enhanced data protection, or will it work with existing solution providers?

Belluzzo: Right now, in the program that we have in place, our Quantum Academy program, we have and are building a pretty strong distribution offering with a variety of VARs as well as distributors to distribute products to VARs. We feel like the footprint we're developing is the right footprint not only for what we're doing today with tape automation, but [also for what we're doing with enhanced data protection.

CRN: So you don't see a pressing need to expand your solution provider base in any great numbers?

Belluzzo: I believe that you should do a few things well, and I'd rather have a smaller number of resellers that are really focused on our products than a large number of resellers that aren't as experienced and don't feel like they can make money with these systems. We want to start out with what we have today and make it really work well . . . and not think of expansion at this point.

CRN: How many solution providers does Quantum have?

Belluzzo: Altogether, I think we have something like 15 enterprise-focused VARs, 80 of what we call the high-performance and midrange VARs, and 2,000 active resellers that are registered. So it's ample coverage for the product offering that we have.

CRN: How about distribution?

Belluzzo: We have four top distributors that cover the market for us in the U.S. They're Arrow, Bell Micro, Ingram Micro and Tech Data. . . . I think that's ample coverage for the number of resellers and solution providers that we have.

CRN: In the last year, Quantum spun off its NAS division, sold its hard-drive business, went through a reorganization, brought you in. Where do you expect to see Quantum a year from now?

Belluzzo: I think what you'll see from us a year from now is a move toward getting back to growth and profitability. According to the guidance we've submitted, we will achieve that before a year from now. So within a year, you can expect to see us growing and making money and having some new products in some new areas that are very exciting and have a lot of energy and enthusiasm among resellers as well as the industry at large.

CRN: Quantum has divested itself of a couple of big parts of its business recently. Can you see Quantum growing by acquisition in the future?

Belluzzo: Based on [Quantum's history, you can imagine it being a part of our future. I personally am very cautious about acquisitions. They're very hard to execute. They have to be made for the right reasons. So we'll constantly look at those opportunities and see where we go. If we think that's the best way to deliver shareholder value, to make a contribution to grow our business, we won't be shy about doing that.

CRN: Could you give a quick overview of Microsoft's storage strategy going forward, particularly regarding .Net services?

Belluzzo: I'm not sure I'm the right person to discuss Microsoft's storage strategy. I think, though, that most of what Microsoft is doing is building capabilities around the .Net server platform to allow for more significant storage opportunities as well as extending into the NAS business with Windows at its core. . . . Microsoft is definitely making an investment in storage. They recognize how important storage is to the overall operation of an IT infrastructure.

CRN: How are changes in Microsoft's strategy affecting Quantum moving forward?

Belluzzo: I think the most near-term [effect was our decision to get out of the NAS business, which we felt was somewhat affected by Microsoft's strategy in terms of using Windows technology to build that addition. It really became more of a commodity business. We felt it was more appropriate for us to focus in on the areas that we felt we can make the most difference in, which is data protection.

CRN: So Microsoft, by making NAS a commodity, was one of the influences in [Quantum's decision to spin off Snap?

Belluzzo: The primary decision point was one of focus. We have a lot of opportunity in data protection. We felt it was important to put all of our energy behind that. . . . [The NAS market is an area that Microsoft is addressing. It did impact our business, as it did anyone in the NAS business who had a non-Microsoft solution. And we decided we didn't want to make the investment to continue to differentiate our products moving forward, because it would only take away from our opportunities in data protection.

CRN: When you were at Microsoft, was it difficult to work with Steve Ballmer and Bill Gates, and did that have any influence on your decision to leave?

Belluzzo: My decision to leave Microsoft was my desire to run a business. To have that pride of contribution when you have an organization that is doing great things, and to be a part of that. For me and my career, there's been nothing better than that, the feeling, the sense of satisfaction. And that's what Quantum allows me to do. At Microsoft, it was difficult because the businesses were spread out. We were increasingly moving decision and business responsibility to the seven businesses that we defined. And that put me in the position of not being able to get the enjoyment that I get out of running a business.

CRN: What do you think is the likelihood of Microsoft's adherence to the antitrust consent decree?

Belluzzo: I would take [Microsoft to be true to their word. They've worked very hard to put in place all of the infrastructure to make that happen. I think they'll make every effort possible to do that.