Qumulo’s Bill Richter On $125 Million Funding, Recruiting Cloud-Forward Partners
Joseph F. Kovar
‘We‘ve seen some really good examples of some of the national resellers building up cloud practices to help customers on their journeys. They’re … offering real expertise and know-how so they can add value and help customers to not have to reinvent the wheel every time they want to move out to the public cloud,’ the Qumulo CEO tells CRN.
Prepping For The Challenges Ahead
Qumulo CEO Bill Richter said the company’s new $125 million funding round will help expand its channel reach, its ability to better work with clients outside North America and Europe, and its speed of innovation as it looks to play a bigger role in managing data across on-premises and multi-cloud infrastructures, he said.
Richter also told CRN that he Seattle-based developer of a file data platform for on-premises and multi-cloud environments is well financed already, is conservative with its cash, and is on the cusp of becoming cash-flow-positive. Indeed, Richter said, Qumulo has just about finished all the goals it set on the way to planning an eventual IPO.
Richter, in his conversation with CRN, also talked about Qumulo‘s technology and innovation plans, and how it stacks against some of its competitors.
Here’s a look at where Qumulo stands today in the cloud storage business, and what can be expected for the rest of 2020.
Will this $125 million funding round be Qumulo's last funding round?
It can be, if we want. We‘ve been very capital-efficient over the last couple of years. We didn’t need to raise capital right now. But the business has accelerated, and given the inbound interest and our desire to expand globally and double down on R&D investments, it makes sense to do it. We don’t burn cash like some of the other companies out there in this space do.
Are you cash-flow-positive yet?
We‘re not. But last quarter, we were darn close.
Is that a goal of yours, to get cash-flow-positive in the near future?
We think that an IPO, as I always tell the team, has three check boxes. The first is to have a strategic advantage in an important market, and we think we can check that box today. Second, have really great revenue growth and scale, and we are making good progress on that. And then have a path to profitability. And so we focus on those three things.
When you say 'strategic advantage,' how do you describe it for Qumulo?
For us, it‘s all about the software and the cloud, this whole file data challenge. And no one can do that like we can. There are really big incumbents, some of whom I’ve worked for, that are good at selling boxes, but their software-defined stories are non-existent, and their cloud stories are as well. And when you look at what’s happening in the world in 2020, customers want real cloud services for all these challenges. Qumulo’s software can run on x86 servers in the data center. But unlike any of the major incumbents, we run as a native service on public clouds, not as a [colocation] or a half-job. We run as a native service on AWS and GCP [Google Cloud Platform], and soon on [Microsoft] Azure. If you and I wanted to, inside of the next 10 minutes, we could deploy on AWS and have a petabyte environment set up for customers to be able to run an at-scale file application. And that’s the strategic advantage.
Where will you use the new funding?
Global expansion. We‘re going to be adding more and more go-to-market resources, more marketing, more investment in the channel, more development of OEMs, and more geographies. For example, today we’re just in North America and EMEA, and we’re very keen on opening up Asia and the other territories where we see clear customer demand.
In fact, through our OEM relationship with HPE, we already have a dozen to 20 customers across Asia. And we don‘t even have any employees there yet. So that’s an area where we know we have to develop.
Is HPE Qumulo's only OEM partner?
HPE‘s our most mature OEM. And we’re looking at others, including Fujitsu.
Are you recruiting channel partners?
We are, definitely.
What are you looking for in potential channel partners?
In the earlier days of Qumulo, we saw a lot of industry focus, channel partners that were focused on particular verticals, or some of the regional folks. And now what we‘re seeing is a lot of interest from the national channel partners. And what’s happening there is they’re getting demand signals from large national customers who need VARs and large resellers that can help them not just in their particular city but also help them with national deployments. And so, we really want partners that can service customers at scale.
And the other thing is, we want partners that are cloud-forward. We‘ve seen some really good examples of some of the national resellers building up cloud practices to help customers on their journeys. They’re not just reselling the service, although we offer that opportunity to those partners, but also offering real expertise and know-how so they can add value and help customers to not have to reinvent the wheel every time they want to move out to the public cloud.
Does Qumulo sell appliances, or only the software?
We‘re software-defined. Customers can buy a line of appliances from us so they can have turnkey solutions. But we’re very open with customers that that is really just a standard x86 storage server that we’re buying on their behalf. It’s a pure matter of convenience. And that’s just for some customers.
A significant amount of our customer base buys Qumulo software and deploys it, for example, on HPE servers, on HPE‘s Apollo line, which is great. That’s a pure software business for us. And then a growing set of customers just run [our software] in the public cloud. They don’t use the product at all on-prem. For us, the most important things that we champion are choice, freedom and flexibility for customers. So by offering those different modes of deployment--either Qumulo on branded x86, or Qumulo on HPE, or Qumulo in the public cloud--we really put our money where our mouth is. And customers absolutely love that.
Who do you consider to be your primary competitors?
We see a lot from the usual suspects, for example NetApp and Dell Isilon on-prem. And then in the cloud, it‘s really a wide-open market. We think that we’re first-mover there in offering an enterprise-class performance, scalable, multi-cloud file service. We don’t think anyone else can do that as well as we can in the public cloud.
What about Nasuni and Cohesity?
Nasuni, it‘s funny. I’ve been CEO of Qumulo for nearly four years. I’ve never once heard of a single competitive situation against Nasuni. And I think that’s because they go after more of the smaller-scale SMB use cases. We are very much large-scale enterprise.
Cohesity is really a backup company. And I think that they‘re doing some interesting work around backup. But what Qumulo does is tier-one, mission-critical applications. Very often, the data sets not only are very large, but the performance requirements and enterprise requirements around the data is extremely high. And that’s not Cohesity’s market.
What is Qumulo focusing on in terms of new technology for the rest of 2020?
There‘s really two big areas of development for us. The first one is around simplicity in the cloud. Today, you can run the cloud system as a native application in the cloud. We are deployed on AWS and GCP, but not yet Azure. You might imagine that’s an area where we’re keenly interested in being able to have our data service across all three public clouds. So there will be a lot more around cloud.
And then, the second major area of innovation for us is all around the data. One of the main value pillars of Qumulo is the concept of data awareness. You can run real-time analytics against billions of files to get responses not about storage but about the data in sub-second response times. Customers love that about Qumulo. What we‘re doing is enhancing that experience and taking it more and more inside competitors’ data. We’ve built out a full API so that interacting with the infrastructure is very much a software process, not a hardware process.
Qumulo until now has not made any acquisitions. Is that an area you might want to explore in the future?
It is, as a matter of fact. It‘s not that we haven’t looked at it. A lot of companies have developed some interesting IP [intellectual property] but have just not made it as a business. And we get called all the time to look at these different things. We haven’t found one that’s quite right yet, although I’d expect over the next couple years that you might see us doing an acquisition.
My standard for the team here, having done acquisitions before in my life, is, they‘re harder than you think to get right, so you better absolutely be in love with it when you’re doing the deal. Because on the other side of the deal, it’s tough. You have to be in love, not in like, with the company you’re acquiring. And we haven’t found love yet.