TechEye speaks to John W. Thompson – storage, start-ups and success

We’re a stickler for celebrity though we don’t often admit it, so it was our pleasure to meet with international businessman of mystery John Thompson – former IBM VP, Symantec CEO and now, having started as an investor, heading up Virtual Instruments which aims to make it easier for the Fortune top 200 and others to manage their data storage virtually or otherwise. 

The word of the day, as you’ll see, is “unique” according to Thompson. Virtual Instruments offers a software and hardware package that, literally, no one else on the market is doing at the moment – and it’s baffling that they’re not. VI has seen exponential growth since its launch and this fiscal year revenues have swelled in excess of 150 percent. In just a couple of years it has gone from a handful of people to about 85, internationally, and it’s hiring. 

Every CEO is going to pitch the company they’re looking after to high heavens. So, in Thompson’s words, here’s why it’s unique. “This is a company that has about thirty patents around a number of interesting technologies – I’ll give you one as a case in point. We have a product called a tap patch panel. In any technology environment, you patch component parts together, so rather than going from storage to array, you go from storage to patch to switch. It gives you maximum flexibility to move things around.

“Invariably if you have a problem with the switch to storage array, you have to TAP into it. We took an interesting design route that says: ‘why don’t you integrate tapping and patching in the same way?’ That’s a unique approach. Another example. Most taps will say ‘OK, there’s a light signal moving down the wire, so I’ll take half the light and let it go to the data storage device, take the other half and allow it to come to my analyser.’ A fifty fifty split is common. As the speeds increase, the light switch becomes important – if you split too much light you can erode the integrity of the information itself.

“What we do is the asymetric split, which is at 70 30, and that allows us to have better integrity than the standard fifty fifty.”

Thompson’s in the UK, London specifically, to meet with customers and keep hiring. VI wants to set up more of a stronghold in Europe and it considers the United Kingdom at the forefront of technology. “The UK is in my opinion the most robust IT market in Europe. While Germany is certainly big it is more difficult to crack than the UK is – because the UK has ‘tentacles’ into others, it is the necleus of the European markets. We’ll methodically work our way across the continent”.

While it is an established name over in the States it has its sites firmly set on Europe next.

When TechEye asked how long it’ll be before it has a strong foothold in the European markets, Thompson told us it’s world domination that’s on the agenda really. But, “We’re on the verge of having some real success in Europe.

“We had a very large transaction at a big European bank recently, I can’t say who, but we’ve got a number of large transactions in the UK, France and Germany that we are contemplating. The issue for us is to get more people. Because we’re a relatively new company – although our technology has been around for a while we are new in this approach to selling and supporting. We need more people for the visibility in who we are and what we do.

“The important issue for us right now at the company – because we are a direct sales model – is building our team in Europe and around the world, where we will be interviewing candidates for jobs in the market. The faster we can get people in place the more rapidly we can get people up to speed. 

“Yesterday I had an interview with a potential European leadership candidate. Getting the right leader in place and the right team will go a long way to accelerating our performance in this region. We’re targeting the UK for sure. As for other European markets like Russia – as withEast Asia – in due time. The mistake any young company could make is expanding into too many markets too rapidly, success is as much about word as mouth as anything – it will be impacted by the last customer experience where you did well or not so well.

“If we were to go into Eastern Europe or Japan, if our customer had a bad experience, as the old saying goes, bad news travels twice as fast as good news. It could ripple back into core markets where we’re trying to establish a foothold.”

VI’s biggest customer in Europe is Unilever – and Thompson should be en route to Chester right now to meet with the team. “If you think about what Virtual Instruments does – if you are a large global transaction based  company, you need our technology. If you’re in the banking business, online retailing, telco business, healthcare delivery, those are the prime industry verticals for the technology we provide. We have got very good representation and penetration of those markets and customers in the US and Europe.”

What about competitors? “I sleep like a baby at night. I go to sleep for an hour and then I get up and I cry for an hour. But at this stage, our competitors – I think you can say that there are a whole range of companies that do some of what we do, no single one does all of what we do. Cisco, EMC etc., don’t do all of what we do.” 

And what about upstarts and disruptors, like Salesforce – is VI a disruptor or happy to sit alongside the markets? “Salesforce? Mark is a good friend of mine. We’d love to have them as customers.” He winks. “We don’t think of ourselves as disruptors, I think that is something that causes major inflection points like virtualisation and cloud based technology. Interestingly enough if you think about these inflection points, downstream a huge opportunity grew. For example in cloud and web enablement, downstream from that we think performance management has become a great opportunity. And that’s where VI is nested.

“While we think about the big and disruptive, we need to think about the implications of that, that creates an array of opportunities for companies to prosper when there is a fundemental change. I have been fortunate enough to be a part of a couple of them. Malware and antivirus had existed a long time before web enablement came along. Then at Symantec, when the web opened up, malware and spam became an enormous nuisance, for corporations and consumers. That’s why Symantec’s business sits at about 4 and a half billion.”

Speaking of anti-virus kit, Intel’s buy of McAfee was a surprise move last year. What did Thompson make of that? Was he or Symantec caught off-guard? Not really. “It appears to be more about diversification for Intel as integration of security in the chip, at least the work we have done with Intel over the years and we’ve been good partners, integration of security in chip for malware detection is not practical.

“If technically it poses some interesting challenges. Why would Intel do it? One thing that comes to mind is how it looks at consolidation across the industry. Look at Oracle buying Sun, Dell moving into other areas and Cisco moving into the data centre. They too must figure out how to use the financial margins. Arguably, while it may have been articulated as some grand technical strategy, I personally don’t see it. It does seem like a smart diversification play from Intel.” 

While bigwigs look to diversify, the future of software, says Thompson, is in data and storage space. That puts VI in a neat position. What is clear, according to VI, is that data volumes are growing exponentially. “Companies large and small are seeing growth of up to 50 percent a year. That level of growth suggests that new techniques and tools are needed. And yes, we think our techniques and tools help. We wouldn’t say we are the only approach but as of right now we are the best approach of managing a fibre channel sand infrastructure, we bring our technologies in to look at all aspects and make adjustments and predictions of what performance problems, or dimensions might exist in this environment.

“This is why we have been able to facilitate the growth we have seen in the last two years.” According to Thompson, who has had a string of success and was considered for a strategic advisory trade role by the Obama administration for secretary of commerce, VI products receive a warm welcome. Even in the tight economic climate of recent years, potential customers become aware of what VI is up to and it’s not long before they give the nod.

The toughest part is finding budget dollars for services customers recognise that they need. They’ve had to understand, says Thompson: “OK, my budget is shrinking and I need to carve something out of it to fund Virtual Instruments. We think in times of more robust budget growth, or growth at all, that will become less challenging for us. We’re not surprised that our customers find the budget – when you think about our target market it’s the global top 200, the largest organisations in the world NEED what we do – and you’ll find some of them have a billion dollar plus IT budget. Inside that you can find a few million here or there – and that’s the story.”

He offers advice for budding start-ups. Speaking from his own experience, he says there’s one mistake you, as a leader, have to avoid: the most significant issue for any small business is staying true to your values. “What is it you started to do with your customers and have you truly exploited and delivered on that? It’s only after you’ve done that, and reasonably well, should you look at diversification. Some of the small companies I have observed where they’re not clear about their values – they are sure fire recipes for failure. We are trying to stay focused at VI. People say, why won’t you attack the network storage market? And we say – we could in due time. But there is an enormous problem in the fibre market so we’re doing that.

“We could go to Japan, or wherever, but we haven’t penetrated the UK or US yet so we will focus on that. 

“Let’s be good at what we do around infrastructure first before we consider other layers in due course. So focus matters.”

The next hardware release for VI is a probe that manages 8 gigabytes of transfer speed. Every fibre channel environment has a transport speed, with the state of the current infrastructure they tend to run at between 2-4 gig rates. But switching fabric manufactures, such as Brocade, are now selling 8 gigs – so the next release is a probe that does 8 gigs. As time goes on we’ll match that with probes that help provide the switch to monitor the traffic itself. It’s just a case of keeping abreast of what’s going on with others in the industry as part of a broader ecosystem.

All in all – John Thompson is a renowned business leader with success behind, and in front of him. And becoming CEO for VI pulled him out of bed and back into business, so it is worth keeping at least one eye open for the relative newcomer. “I’m a lousy golfer, I’m an old fat guy so laying on the beach getting sunburnt doesn’t seem like the thing to do – and I don’t want my brain to atrophy, so why not take an active role to an extent you could be helpful. If I wake up one day and realise I’m not being helpful any more, as an old fat guy, I’ll go to the beach.” 

As TechEye says bye to Thompson, we ask what stage VI would like to sell – if at all. He tells us everything has its price. 

“Everything’s for sale. You’d sell me that hat. It just depends for what price.” We disagree and he pulls out an impressive wad of rolled up dollar bills but we tell him we only take Sterling. He offers five and we refuse, until next time.

Thompson’s right though. If it’d been a tenner Thompson would have made his cheapest acquisition yet, around twenty dollars for a beat-up old pork pie.