Although the need for reliable data backup has never been greater, the depressed IT spending climate has caused problems for Quantum Corp., a $1 billion maker of storage systems and software. After naming industry veteran and former Microsoft Corp. President Richard Belluzzo its CEO in August, Quantum sold its network-attached-storage unit and outsourced the bulk of its tape manufacturing. Belluzzo met in eWeeks editorial offices earlier this month with Editor in Chief Eric Lundquist, Executive Editor Stan Gibson and Senior Writer Evan Koblentz to discuss where hes leading the Milpitas, Calif., company.
eWeek: When you became CEO of Quantum in August, you said you would “shore up and transition” the company. How have you been shoring up Quantum, and what is it transitioning to?
Belluzzo: Ive been making sure that changes are implemented so that our financial performance improves. In a short period of time, we made a large number of changes, including restructuring, the acquisition of Benchmark [Storage Innovations Inc.] and outsourcing tape manufacturing [to Jabil Circuit Inc.].
At the same time, I have wanted to build leadership in the business because you cant do that by just restructuring. You have to innovate. So were working toward breaking even this quarter and profitability for next quarter. Weve been building our strategy around growing our tape business, the tape library business and a new category were calling enhanced data protection.
eWeek: So tape and data protection are key but not network storage, which you were talking about a few months ago?
Belluzzo: Thats right; its changed. We became excited about the potential in the broader data protection space. Its a $30 billion market thats growing rapidly, and there are a lot of changes in it. So we sold the network storage business, and we have focused on three areas: tape, tape automation and enhanced data protection.
eWeek: Given that Quantum is an investor in the spinoff company Snap Appliance [Inc.], why was that a better strategy than keeping network storage within the company?
Belluzzo: Were a small investor in Snap Appliance. Creating a separate company allows us to focus our resources on enhanced data protection, which we think is a bigger opportunity.
eWeek: Whats the total head count reduction?
Belluzzo: We were over 3,000 people, and were now about 2,000 people. But 800 of those were in the factory that was sold to Jabil. The remaining couple hundred includes some people being transferred to Snap Appliance.
eWeek: Will you keep disk-based backup products within the company?
Belluzzo: There is no question that those are Quantum products. We did think about whether we should take our network storage business and make it the data protection business. We decided not to but to start with a clean sheet of paper, starting with the DX30 [disk backup system] and moving to higher levels of performance and deeper levels of functionality.
eWeek: How fast is the market for disk backup growing?
Belluzzo: I dont have the exact figures, but its a faster-growing segment than tape. We see people moving toward appliancelike disk storage products that include software for data protection, storing and archiving. So were building a hierarchy of products.
eWeek: Is Quantum becoming more of a software company?
Belluzzo: I would stop short of calling us a software company. We will use software in our hardware products, but we will not become a purely software company. The hardware business is very commoditylike. Software is the value-add.
eWeek: EMC [Corp.], Network Appliance [Inc.] and StorageTek [Storage Technology Corp.] are all working on disk-based backup. How do you see the market developing?
Belluzzo: In the disk-based backup segment, its about delivering a set of products for people who cant afford more expensive disk-based backup systems. We want to build a new model. We think we can build a new category.
eWeek: What does the product road map look like beyond the DX30?
Belluzzo: The DX30 today is about using hard disks to create a virtual tape environment. It embraces software like that of Veritas [Software Corp.]. We can increase the capacity and performance of the device, or we can reduce the cost. Or we can add more intelligence and functionality to the device through software. We havent decided which direction to pursue, but were going to decide in the next few weeks how deep we will go with specific capabilities and what partnerships we might need. We do not have all the technology today. We will have to build or buy more, mostly software.
eWeek: After Sept. 11, are you seeing more money going into storage and backup?
Belluzzo: Its spotty. Ive been with a lot of customers who are thinking of consolidating data centers, doing a better job of archiving and so on. But I cant say that customers in all market segments are doing that.
eWeek: Is there a point at which tape disappears?
Belluzzo: I dont see how tape will disappear. Disk will always have shortcomings. Today, the biggest transition is not that tape is disappearing but that disk and tape are creating a unique kind of relationship together. The real win is to try to make the two work together.