Sramana Mitra: I guess the obvious question, one you must get all the time, is, is it safe?
Matthew J. Schitz: Yes. It’s interesting, because when I was CEO at DocuSign, at the same stage of the company, we were pioneering electronic signatures. The market at that time was signing things on paper. The first question we would get, which was an emotional reaction, was, “Is it safe? You’re putting my signature on the Internet. Is that safe?” And then we said, “Think this through logically.” We went through the entire security [process] and how we validate identities, and so on, and people would come to the conclusion that it’s actually safer than signing on paper.
We had ESG – which is the Gartner of storage – study our distributed network, and their conclusion was that it’s actually safer. Again, a few things: We encrypt the data before it ever leaves your site, which is unique. We shred it, and then we geo-disburse it to 96 unique locations.
SM: Are there redundancies? Is the same piece of datum put in multiple places?
MJS: Yes. We use a technology similar to DVRs and DVDs where – I don’t know if you’ve noticed that a DVD will play even if it’s scratched because it has redundant bits on the medium. We take your data, add 32 redundant bits, and store it in 96 unique locations.
SM: So, if one piece of hardware somewhere goes bust, you can still find the data somewhere else?
MJS: Absolutely, and the network is monitored 24 hours a day, seven days a week. We have more than 85,000,000 [pieces] on the system and never had any data lost.
SM: What do you charge for this service?
MJS: That’s what’s revolutionary about our system. Not only is the security better than a centralized data center, and not only is the performance higher because of parallel connections rather than on serial connection, but we also offer revolutionary economics. For example, we offer a server for $50 a month for unlimited data. That could cost upward of a $1,000 a month on a typical cloud service. We offer three users $10 per month for unlimited data. We’re out there with some revolutionary price points. And that message that says, “Hey, join our network.” If you look at the statistics, over the life of a drive or device, people use between 20% and 40% of their disk space. Everybody has excess disk space. That’s not the issue. Our value proposition is join our network; contribute some of your excess disk space; and in return, you get the world’s best cloud storage and backup at revolutionary pricing.
SM: Amazon’s pricing is very good. Why would a customer choose you over Amazon?
MJS: Amazon is the leader in wholesale storage. But their pricing is per gigabyte, number one. Ours is unlimited. From day one, our costs are considerably less for our customers, especially if you have a considerable amount of data. People’s data is doubling every 12 months, so our customers are happy that they have predictability in their cloud storage and backup costs. As their data grows, their costs don’t.
SM: We have a huge amount of escalating storage because we do a lot of multimedia events, which are all recorded and made available, and we need to back those up. Right now, we have the backup on Amazon. We have the public events on YouTube, which people can watch on our YouTube channel. But the private events are on [something else]. There are several layers of issues there. The events are held on WebEx. WebEx stores it, but they charge a ton for data. We’re about to move everything from WebEx and put it in different places. But you’re right, the storage costs are going up. On the one hand, storage is cheap. On the other, the amount of material we are producing is big, the storage costs start to go up.
MJS: Yes, they do. What we’ve heard from customers is that they want three things from cloud storage and backup: They want a safe, secure environment. They want good performance and through-put. And last but not least – in fact most important – they want it to be economical and predictable. If you read all the research, those are the three things that people want from cloud storage and backup, and it’s been verified by our experience. We designed a whole new architecture.
Instead of taking data and storing them in a centralized data center, which has to grow over time and is very expensive to build, maintain, and expand, we saw that those resources already exist on the edge of the Internet at the user’s site. Everyone already has excess disk space and bandwidth. So, we designed this distributed architecture. We patented it and put it into commercial production. And we now have 10,000 nodes in 64 countries using it. We have tens of millions of files and petabytes of data. The system is working well. We’re growing at a blistering rate. In the past six months, we grew the network 800%.