Thought Leaders in Cloud Computing: Austin McChord, CEO of Datto (Part 2)

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?

Austin McChord: The easiest thing to do is talk about what’s special. There’s a lot of people who do backup and recovery.

Sramana Mitra: It’s commoditized, almost.

Austin McChord: Yes, our skill set is around doing recovery unbelievably fast. If a business’s email server goes down, we can restore those services in about six seconds. It has incredibly fast restore time even if that local server is not virtualized. It involves a physical on-site appliance and our cloud back-end that we built allows us to pull off that trick. It’s come in handy and has been incredibly valuable for a lot of businesses. For example during Hurricane Sandy, we had over 500 businesses that migrated all of their physical on-site IT infrastructure to our cloud in a matter of minutes to get them back up and running. On our cloud side, we have over 70 pedobytes of data stored. That’s an enormous amount of data that we’re hanging onto.

We sell entirely through the channel. We don’t sell direct to businesses instead we work with managed service providers to be a key part of their suite of services. We sell through 5000 reselling network in North America and several hundred in the EMEA region. That’s our go-to market and has worked really well for us.

On the competitive landscape, it’s hard to find a direct analog to us because there is nobody that has the technological assets that we have. We found ourselves to be a very disruptive force against the traditional players in backup. Backup Exec and other software-based solutions got displaced quickly when our offering started coming up. Customers can see the value in performing these restores so fast. That’s what really makes backup valuable – it’s how quickly you can get your data back.

Sramana Mitra: Technically, what is behind the decision of having an on-premise appliance? What is the architectural decision driving that?

Austin McChord: A majority of customers that we serve have a fair amount of on-premise infrastructure and a majority of the failures that occur happen on-premise. Like I said, an email server might go down due to an equipment snag and to be able to restore using an on-premise appliance is very powerful because a lot of them have limited access to the Internet – the quality of the bandwidth access that they have is quite low. So that really denotes a need for an on-premise appliance. Not to mention, the on-premise appliances are off-loading a lot of the work associated with the back up – data duplication, archival, encryption. Obviously, we keep the cloud replica to ensure that we can sync even for people that have really poor Internet connections. We can keep it up to date due to the technology that we have. It’s a hybrid cloud appliance.

In a lot of areas, that makes sense simply because if we were to virtualize that infrastructure solely in the cloud, not a lot of businesses have the necessary Internet bandwidth in order to achieve satisfactory performance.

This segment is part 2 in the series : Thought Leaders in Cloud Computing: Austin McChord, CEO of Datto
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