Serial Entrepreneurship in Pittsburgh: Ron Bianchini’s Amazing Journey (Part 4)

Sramana Mitra: That’s good. John Jarve is also an MIT grad by the way.

Ron Bianchini: I know. Have you met him?

Sramana Mitra: Yes, several times.

Ron Bianchini: He’s on my Board in my third company now.

Sramana Mitra: You raised a lot of money for Spinnaker. How long did it take you to bring the product to market and what kind of customers did you find traction in?

Ron Bianchini: We ran Spinnaker for four years from 2000 to 2004. In 2004, we sold it to Network Appliance for $300 million.

Sramana Mitra: By that time, did you have customers?

Ron Bianchini: We did. We had been in the market for about five quarters.

Sramana Mitra: Who were the customers?

Ron Bianchini: The way you scale NaaS products is you buy a NaaS which is called a filer. When the CPU can’t keep up with the work anymore, you buy another one. When that CPU can’t handle the work, you buy another one. You scale filers by buying multiples. When you have multiple filers, you cluster them and they look like one big filer. Spinnaker was all about clustering the capacity. You kept building on capacity as you added more filers.

The main reason for Spinnaker was, we got this quote from a customer who said, “I loved my first filer. I liked my second one. By the time I had five, I hated them because I was constantly managing which one had more space. It was constant copying projects from one filer to another.” He said, “All I really want is that network-attached storage experience. I don’t want to have to manage between the different islands.” If you had three of our nodes and you bought a fourth, it’s found the first and distributed the capacity among them.

Our customers were people who didn’t just own one or two filers. They own 10, 20, or 100 filers. These were all large enterprises. We had a bunch of media and entertainment customers. We had a bunch of marketing research firms doing credit card transactions. This is probably pre-Google algorithms of watching transactions and getting all the marketing information on their customers. Anyone who has lots of filers and capacity but didn’t want to manage the projects between them are our customers.

Sramana Mitra: That was a very classical systems deal. You got the product out. You got a bunch of early customers and got acquired by one of the larger players. This was happening a lot in that time.

Ron Bianchini: That’s right. I will tell you this. People are asking me, “If things are going so well, why did you sell?” When we started Spinnaker, we felt that there was no other game in town for clustering. It was a big differentiator. Anyone who had lots of filers were starting to buy our gear. But here’s what we noticed as a company. In the beginning, 90% of our employees were working on clustering, 10% were doing all the checkbox features, and 10% of the engineers were doing the things that everyone else already had.

Once the clustering part of the product came out and we started acquiring customers, they would call us, “I have a very specific robot that NetApp and EMC supports. I can’t buy you unless you support that robot.” At the end of the four years, it was completely the opposite. 80% of our employees were doing all the checkboxes and only 20% were working on the thing that made us unique. First, the return to my investors was just phenomenal and it came at a really dark time in the tech world. We were worried that we were the smallest storage player competing in the market. We were worried that these guys were right behind us and they were going to overtake us.

I don’t know if NetApp did this on purpose or not but they put out a press release on how they were going to have clustering almost exactly like ours. It was the way that the press release was worded but it turned out that it was just a take on DFF protocol. It was nothing other than DFF, which we knew about. We thought NetApp would be out of the gates, so the acquisition made a lot of sense for us.

This segment is part 4 in the series : Serial Entrepreneurship in Pittsburgh: Ron Bianchini’s Amazing Journey
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