Sramana Mitra: Switching gears, what are some unsolved problems? What are pain points that you’re hearing from your customer base that are interesting problems and that you and your peers are not solving? These are emerging pain points that need a whole new entrepreneur to go after.
Sramana Mitra: Help us with the competitive landscape. Whom do you compete directly or indirectly? What does that landscape look like?
Momchil Michailov: Software-defined storage has been a hot and trendy area. In flash storage and software-defined storage, there was a total of $1.2 billion of venture investment last year. For the pure software stack, we have been positioned against companies like ScaleIO, which was recently acquired by EMC. We are certainly compared a lot to a company called Nexenta and a number of other players out there.
Sramana Mitra: Let me get a few things straight because I think we’re dealing with a fairly complex ecosystem here. I want to understand the real positioning of your company in that fairly complex ecosystem. We have the data center vendors, enterprise, and customers who run their own large-scale data centers. You are enabling these enterprise customers to layer on software around data center on top of the basic infrastructure provided by the data center vendors?
The cloud infrastructure space is going through a huge upheaval, as it moves from a largely hardware architecture to a primarily software-based model. This discussion digs into the issues and unearths some areas where there are clear opportunities for new entrepreneurs.
Sramana Mitra: Momchil, let us introduce you to our audience. Tell us about who you are. What are you doing?
Momchil Michailov: Thanks for having us. This is Momchil Michailov and I’m one of the co-founders of Sanbolic Inc. I happen to be in Boston today, but we’re both a North American and a European company. A lot of our development is done in Bulgaria in former Eastern Europe. The rest of the company is here in Boston.
Sramana Mitra: You have probably seen maybe 30% of Internet traffic to homes in the U.S. is due to Netflix?
Austin McChord: Yes.
Sramana Mitra: Could that be a lever that pushes the ISPs and the carriers to do something about the level of connectivity or the quality of the connection?
Sramana Mitra: What are the gating items in providing that connectivity? Is it that the Internet service providers are not moving fast enough? Is there any kind of technology that is unresolved?
Austin McChord: I think there’s just not enough competitive pressure in the market for the quality of Internet service to rise. Lots of these small businesses in the 20 to 200 spot don’t have the availability to bring in direct fiber from a real Internet provider – like Level 3. So instead, when they’re putting together fiber links, they’re limited to what’s being offered by consumer and residential ISPs. There’s not a lot of competition or real pressure to have that quality improved. So that limits businesses’ adoption of the cloud at the lower end.
Sramana Mitra: I guess the volume of data depends on what industry you’re in and how much data you’re generating?
Austin McChord: Yes, absolutely.
Sramana Mitra: Let’s talk about trends. What trends do you track given what you’re doing? What are you tracking? What do you see as threats and opportunities?
Sramana Mitra: Talk to me about the SME market. Help me understand the sweet spots. What are the other characteristics of the sweet spots among your audience?
Austin McChord: We’re selling into the SMB market space. Our sweet spot is the 20 to 200 seat business. They typically have anywhere from half a terabyte to 10 terabytes of critical data. There’s a broad swath of businesses that fit that. It cuts across many verticals – medical, legal, financial, manufacturing, and a lot of creative services companies. In our case, backup is a universal need for businesses.