SVG Sit-Down: Quantum CEO Jamie Lerner Says Company’s ‘Innovation Engine Is Running at Full Speed Again’

Major goal is to transition from hardware offerings to software-defined architecture

It has been 16 months since Jamie Lerner took over as president/CEO of Quantum, and he has been plenty busy. In that period, the company has launched the NVMe-powered F-Series storage system and a line of distributed cloud services and cloud-based analytics and has officially entered the video-surveillance industry with the VS-Series storage platform. In addition, Quantum has cleaned up its financial picture, completed the restatement process for previous quarters, and created $70 million in cost reduction.

SVG sat down with Lerner to discuss the company’s transformation over the past year; his vision for moving to a software-defined, hybrid-cloud architecture; the industry’s reaction to the recent product releases; the increasing popularity of NVMe-based storage; and what to expect from Quantum in the coming year.

Quantum’s Jamie Lerner: “Our technology is getting stronger in surveillance, and we are starting to deploy anywhere you see a lot of video.”

What have been the major highlights of your first year as CEO?
The biggest highlight for me has been that the innovation engine is running at full speed at Quantum again. We’ve made a series of innovations that are stairsteps towards our main goal, which is to move to a more software-defined, hybrid-cloud, hyperconverged architecture. Traditionally, we’ve been very hardware-centric, so that is a big move for Quantum.

And what steps is Quantum taking to make that transition?
The first thing we did to begin that journey was introduce our F-Series product, which is an all-NVMe RDMA [remote direct memory access] network product. We launched that about six months ago, and we already have many of our largest customers on that technology. It’s in production, it’s at scale, and it’s performing even better than we thought. I think it’s also important to note that it’s entirely our own block-storage technology. For many years, we had always relied on OEM for that, and now we have our own block-storage technology.

Next, we took that block storage and virtualized it. We launched the VS-Series, a video surveillance product that we see being used at stadiums and sporting events. That is the same block storage but now in a virtual package. We can take the block storage and the video-management software and run them converged on the same equipment. That’s all software-defined, so you can use our equipment or third-party equipment.

The third major step is, we made all the products at Quantum monitorable from the cloud. Our Cloud Based Analytics will allow you to monitor Quantum technology anywhere — whether it’s in the cloud or in your data center.

Lastly, we’ve been doing a lot of work on our [flagship] StorNext [storage] platform to make it easier to operate, including enhancing the user interfaces and the web-service APIs. And we’re very excited to be just a few months away from having StorNext run on the cloud. So now you can not only move data back and forth to the cloud but actually operate StorNext on premises or in the cloud. And we’ll be going even further by fully hyperconverging the StorNext platform over the next six months.

How has the market reacted to all these developments?
Several of our largest customers are now running the F-Series, which is amazing, considering that kind of thing usually takes a year-long sales cycle. A lot of our large customers moved in the first three or four months because the speed was just so compelling. And we have over 2,400 customers across our tape and StorNext products, [which now feature] cloud-based analytics. It’s free to all our customers because we want them to use it: if you monitor your system, it will obviously run better.

Separately, we’ve also seen a lot of success with the R-Series, a ruggedized edge product we introduced earlier this year. It’s already running on [movie] sets, airplanes, buses, and all sorts of other applications. And we’re seeing more interest from [production-truck vendors], and we are quoting a series of different truck deployments right now. It really gives us that edge technology that we’d been lacking for some time.

As the cost of NVMe drops, do you expect adoption of this technology to accelerate quickly? If so, how do you see the F-Series user base developing in the near term?
The F-Series [launched] with the F2000, which is an extremely high-availability product but is quite expensive. In a couple of months, we will be releasing a new version that may not be as redundant but is a sixth of the price. At that point, the price of NVMe is so aggressive that I don’t see how SSD or 10,000-rpm hard drives can remain an option for people. I think [users] will end up with NVMe for their high-performance needs, large-capacity hard drives for near-line and middle-tier [storage], and tape and cloud for [deep archive]. I just don’t see why anyone would buy an SSD-based product or a 10,000-rpm hard-drive product once we get to that point.

A year ago, we didn’t think [NVMe adoption] would happen this fast, but the price [reductions] have been so massive that it has really speeded things up. As we move away from the really high-end enterprise [clients] and shift more towards the commercial-grade [market], pricing [for NVMe] starts getting very disruptive.

Earlier this year, Quantum formally entered the video-surveillance market with the VS-Series. How has that product been received?
Over the next several years, the surveillance market is going to grow exponentially, and we realize that the total addressable market of surveillance is already much larger than media and entertainment. We’ve been in media and entertainment for 15-plus years, and we’re newer to surveillance, but I think, over time, it will probably be our biggest business. Our technology is getting stronger in that area, and we are starting to deploy in the world’s largest professional and college stadiums, buses, airports, public transportation, prison systems, casinos — anywhere you see a lot of video.

We see surveillance in stadiums taking off pretty quickly. We have the ability to say to [stadium operators], “You’ve trusted us with your video content for a decade. Now let’s talk about the surveillance video.” We not only have the technical expertise; we can also create synergies and put together a more economic offer that combines entertainment video and security video. That has been very compelling thus far for stadium owners and operators.

Quantum made its name on tape over the past few decades. How does the future of tape play into the company’s overall strategy?
There’s one thing that we know won’t change anytime soon: tape is the most affordable — albeit slow — way to store data for decades. I don’t expect any technology to disrupt that for at least the next 10 years.

But what’s happening with tape is, it’s becoming software-defined. If you look at how companies are using the cloud, they are using software infrastructure to archive data. In Quantum’s history with tape, we have always used third-party backup software, and it would write your backup data to tape. Now we’re actually starting to provide that software for archive: we give you a gigantic, almost bottomless file system to put in as many files as you want. You can search for them, you can find them, you can bring them back, and we’ll write the data multiple places so you’re protected if something ever goes wrong with the tape system. We’re actually starting to provide all the software with the tape system to do the archive, so it’s actually “software-defined tape.” The software is where we see [customers gaining] value.

How would you compare Quantum’s position today with where it was 16 months ago?
I think there’s a lot of people reexamining at this company with a very different eye. We announced $70 million in cost reductions along with $50 million-$55 million in EBITDA. We are truly a profitable company. The company is also growing: we recently announced 6% growth, and I think, in less than 12 months, we’ll [see] 10%-plus growth.

Most of our financial challenges, in terms of the profitability of the company, are behind us. We’ll be moving soon to a national exchange. We are economically responsible with our finances, we’re running the business ethically, we’re inventing and innovating and launching new products, and the business is growing. I think people are seeing sound management and looking at Quantum in a whole new light.

This interview has been edited for length and clarity.

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