Sramana Mitra: You took the financing from Boston VCs?
Austin McChord: Yes, from General Catalyst up in Boston.
Sramana Mitra: Let’s talk about your business. Tell us what you do. What is the competitive landscape that you play in and how do you differentiate?
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Sramana Mitra: It’s not viable for startups to come into a market with major incumbents purely on the strength of usability. I just don’t think it’s going to be viable.
Jeetu Patel: Let’s take Syncplicity. We took the DNA that they had around user experience and SaaS. They would have not been able to make a dent by themselves as a standalone company, but because we took this small company of creative people and fueled the growth and innovation, it made us, within one year, the fastest growing file sync and share vendor in the market.
This interview focuses on some of the bottlenecks facing the cloud services industry in penetrating the SME customer base.
Sramana Mitra: Austin, give us a bit of context about you as well as Datto.
Austin McChord: I started Datto right out of college about seven years ago. Our goal was to provide backup and SaaS recovery in a better way and at a lower cost. With that, we pivoted towards the SMB market space. Now, we provide innovative solutions for businesses on the backup and SaaS recovery front. We go beyond simply recovering data and even go as far as avoiding downtime all together. Our company has grown really fast around that premise. We have 270 employees now and appliances on every continent except Antarctica. We have been experiencing doubling growth every year and I’m excited to continue that.
Sramana Mitra: How big is the business? What scale are we talking about?
Jeetu Patel: It’s in hundreds of millions of dollars. IDC has predicted growth rates that are actually conservative compared to the ones we had in 2013. We are the fastest growing file sync and share vendor in the industry. The other players in the market are Box, Dropbox, and Microsoft. These are the four players that I think will constitute a lion’s share of the market. Then, you have the tier-2 vendors that might go out and take some of the bread crumbs.
Sramana Mitra: Do you foresee consumer smartphones using your technology or do you foresee handset vendors catering to the consumer market building your chips into the devices? Is that how you see the market evolving?
Gregg Smith: Certainly, that’s how we want to see the market evolve overtime. One thing that we were able to do because of Mr. Snowden and the press that he generated was do a lot of mainstream media. We did a lot of television in the USA today. One of the things that proves to me is that there are consumers interested in talking securely and text messaging securely. That’s an area we’ll start to concentrate on more in 2014.
Sramana Mitra: Fair enough. We have talked about security, privacy, and hybrid cloud. Where do you see things going from here in terms of the open problems? Given those other trends and that there are multiple devices in the enterprise floating around, what are the open problems currently on your radar?
Jeetu Patel: The first open problem on the radar is the fact that software is going to get more predictive with a fair number of insights. Software will know what you want to do before you actually want to do it. I’ll give you a couple of examples. There’s a fair amount of productivity enhancements that happen by solving some of the small frustrating problems that we actually spend a lot of time on a daily basis. I sit down in a meeting with 15 people. We white board some concepts. At the end of the meeting, I take a picture through my phone. Then people ask, “Can you send me that picture as well?” Now, I have to remember all the people and their email addresses to send them that picture. It is something very basic but happens on a regular basis.
Sramana Mitra: When you deploy in a Fortune 500, is the assumption that the phones or tables the Fortune 500 employees are using are owned by the corporation and they custom-build your chips and other applications on top of that into these devices?
Gregg Smith: It can work in a couple of different ways. Yes, they can absolutely leverage the chip and our applications and build applications on top of that. For example, Samsung has done that with us. In other cases, we might just provide the chip and the application. One of our partners would provide the chip and the application and they would just use standard off-the-shelf apps that we sell every day.
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Jeetu Patel: This kind of flexible hybrid cloud deployment model where security, privacy, compliance, and user experience are not sacrificed is going to be the major trend as applications get built. The cloud has made this third platform B where there are millions of applications available to billions of users. We want to make sure that these billions of users can get the same level of delight in using a consumer-grade application with utmost security and compliance. We also do not sacrifice IT manageability while they’re doing that.
Sramana Mitra: I think what you’re alluding to is cloud being a big driver in the consumerization of IT. Layered on top of that are the current accentuating privacy and security concerns that’s driving us back towards a more centralized model of private cloud from a more distributed model.
Jeetu Patel: Consumerization of IT is being interpreted in different ways. Let’s talk about that for a second. Typically, users want to make sure that they can use the most effective capabilities so they can be as productive as they can be. In fact, cloud has allowed people to fundamentally change work patterns through accessing tools and technologies rapidly. The consumerization of IT doesn’t mean that IT won’t get involved at all. It means that IT gets involved in a completely transparent way. That’s where the nuance and details come in. If you can provide manageability and security in a way that’s not intrusive to the user but in fact enhances the user experience and provides more analytics and predictive insights, then users will be more delighted with enterprise-sanctioned software. They don’t have to go through all the friction that the enterprises create if they don’t have enterprise-sanctioned software.
Sramana Mitra: Let’s talk about Syncplicity. How does that relate to the trends that we are discussing?
Jeetu Patel: The way people work is fundamentally changing. Syncplicity is at a convergence of many of these trends. What problem do people really want to solve today? People have multiple devices. They want to make sure that they can have their files and contents on any of the devices that they might have. They want to be able to seamlessly share that content with people both inside and outside their organizations.
They want to be able to get updates to software as easily as they get with consumer-grade applications in the cloud. What we needed to have was ability for people to get productive with their files and redefine the way people work with their files in the mobile, social, cloud area. Syncplicity has provided users a capability like Dropbox but much better on the user experience, enterprise IT-grade security, and compliance. People can go out and collaborate more effectively with each other.
Sramana Mitra: You cater to enterprises and help their employee base operate in a multi-device mode.
Jeetu Patel: To get more productive and to get their work done.