Xiotech CEO Sends 2010 Signals

Full Disclosure:  I started with XIOTECH this week here in the Bay Area.  As if on cue, WIKIBON publishes the following:

I received an email blast yesterday from Alan Atkinson, the new CEO of Xiotech. It was a teaser to keep the company on people’s radar screens. I wrote about Xiotech back in November after I met with Alan. As I said at the time, Atkinson would both shake up Xiotech and get more marketing value out of its big name people assets. He’s doing just that.

In his note he pointed out that Xiotech has made several additions to its management team, including Jim McDonald as Chief Strategy Officer and Brian Reagan as SVP of Marketing and Business Development. Atkinson also announced that Richie Lary has been appointed corporate Fellow. McDonald worked with Atkinson at Goldman Sachs and then WysDM, which was later sold to EMC where he did a stint after the acquisition. Reagan is former EMC, IBM (via Arsenal Digital) and Richie Lary is a scary smart dude who looks like Cosmo Kramer and is generally accepted as the Father of Digital’s Storageworks. Atkinson also pointed to Steve Sicola, Rob Peglar and Mark Glasgow to underscore the depth of Xiotech’s bench.

I went digging to find out a bit more about what’s going on at Xiotech. First, Atkinson mentioned a good second half of 2009 but he didn’t give any specifics. Indications are that second half revenues were up nearly 40% year on year. I’m sure the comparison is against a miserable 2nd half of 2008 but that’s still good progress which is largely attributed to the growth of Xiotech’s ISE architecutre. Some of the growth supposedly came from Wall Street where both Atkinson and McDonald know 99% of the IT guys from their tenure at Goldman. I couldn’t confirm Goldman as an account yet but it’s an obvious bet that Atkinson and McDonald will get Xiotech in the door.

One of the things Atkinson said when we met last fall is that he wanted to get his OEM business going. I mean it’s a no-brainer strategy, right? You have some good IP with an architecture that is cost effective and since 2008 has had like four drive failures in the field over a sample of more than 30,000 disk drives. According to the Carnegie Mellon study you’d expect two orders of magnitude more failures annually than Xiotech customers are experiencing. Some OEMs will be interested in these types of results because it will keep their costs down. But the OEM business will take time to build and I don’t expect tons of noise this year on that front. Xiotech has been talking about being qualified behind IBM’s SAN Volume Controller but that’s only a baby step; although it’s another avenue for Xiotech’s reseller channel.

Another point Atkinson made in his letter was “We also will position ISE as the storage answer to dilemmas in virtualization, cloud and other performance-starved applications.” I’m not entirely clear on what this means but about a month ago, Jim McDonald wrote a blog that touched on the role of the hypervisor and how increasingly complex array-based function is moving back toward the host. Interesting perspective. I picked up on this trend back in November and used it for a blog on flash threats and opportunities. A key here will be how well Xiotech is able to integrate with the vStorage APIs announced by VMware in 2008. So far very few vendors have stepped up to this task. It’s a big resource commitment that further underscores the importance of OEMs that can provide resources to get integration work done.

For too long Xiotech’s been a ship at sea without a clear navigation plan. I have no doubt Atkinson is bringing focus and I’m interested in hearing more about the company’s vision, messaging and strategy later on this year.

Stay tuned.

reposted verbatim from wikibon

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