Nathan Thompson's Fiscal Year 2011 Blog Update
By Nathan Thompson, Chairman and CEO, Spectra Logic
Recently we brought a group of our large users to Boulder to give us input on our technology and support strategies. In speaking with these customers it became very clear that long-term relationships are important when it comes to storage, followed by the longevity of their storage platforms. The relationship aspect was not a surprise. However, we didn’t fully appreciate that many of our largest customers ideally would like to keep their tape library storage devices in place for upwards of 20 years. During that time they expect that the modularity of their libraries will allow them to continue to increase capacity, density, reliability and utility as new “plug-in” technology becomes available through Spectra. Since then I have been looking back—and we do have some customers who have been running 8mm AIT Spectra libraries for nearly two decades. Upgrades have been applied to keep up with data growth, but they still are running the same robot with older drives (even thought 8mm tape is at the end of the road).
Come to think of it, the very first T950 Spectra that shipped nearly seven years ago is deployed and in use at NASA Langley. We have a relationship with the team that uses it, and over the years a number of upgrades and improvements (hardware, software and support processes) have been applied to upgrade it.
There is a relentless push for organizations to keep ever-increasing volumes of data for longer, and very often, indefinite periods of time. This plays to Spectra’s strength—strong customer relationships, and continuous incremental improvement of our products, processes and technology. I think it's one of the overarching reasons Spectra Logic achieved record-breaking results in fiscal 2011 for our active archive, backup, compliance and disaster recovery storage solutions.
We increased our total revenue 30 percent and our enterprise tape libraries posted 49 percent revenue growth this past fiscal year. These are strong results, but not surprising when you consider current storage trends and the sheer volume of data that organizations store for extensive periods. Mortgage companies are storing data for the duration of a 30-year loan, at a minimum. Broadcast networks are archiving hundreds of thousands of hours of digital content for an indefinite amount of time. The Library of Congress is storing the very fabric of our republic, which dates back 300+ years. Earthquake scientists are storing seismic data for future analysis to better predict natural disasters. Governments are storing census data to analyze and predict demographic trends over multiple decades. The list goes on and on, highlighting the need for smart, reliable and cost-effective solutions for archiving data. Enter tape.
Simply stated, tape offers the best density, reliability, energy efficiency and scalability for the money. I'm thrilled that we were able to support our bold claims about tape's advantages last fiscal year by being honored with eight product and company awards, including one of the industry's most prestigious awards: theQuality Award in the midrange and enterprise tape library categories in the latest Storage magazine/ SearchStorage.com Quality Awards service and reliability survey. Spectra’s tape libraries swept all fourteen categories including sales-force competence, initial product quality, product features, product reliability and technical support.
Long-term relationships are important to our customers, and we strive to build relationships that stand the test of time. For us, that means establishing close relationships, being candid and transparent, and providing investment protection via products that are modular and flexible. We will celebrate our 32nd year in business next month, and our enduring success reflects our strong customer relationships and the high ROI our customers achieve by implementing our tape-based storage solutions. We invested 10 percent of our annual revenues in R&D and an additional 12 percent in customer support this year. We announced IBM TS1140 Technology tape drives, which are now offered with our enterprise class TFinity tape library, and introduced Data Integrity Verification across our entire TSeries tape library family line – free of charge. This continued commitment to excellence enables us to deliver market-leading innovations designed to transform our customer's storage infrastructures.
To keep up with increased demand, Spectra further expanded by hiring additional local resources in Europe, Africa, South America, Canada, Australia and India. Currently, our products are installed in more than 40 countries worldwide. We grew our SpectraEDGE channel partner reseller base by 10 percent and now have more than 500 worldwide reseller members.
Spectra Logic continued to lead the industry's tape charge by initiating the first-ever Tape Summit in April 2011, a gathering of market leaders responsible for driving the future of tape-based software and hardware solutions designed to meet modern data storage demands. The inaugural Tape Summit conference was a success and is sure to become an annual tradition. Spectra also continued its leadership in growing the Active Archive Alliance, which we co-founded in April 2010.
While we enjoyed our FY2011 success, we are already looking forward to what's ahead in FY2012. At Spectra, we see a number of trends that will shape the storage industry, including:
- Data growth will continue to grow exponentially: Spectra predicts that data will double every 18 months, which is about a 48 percent growth rate. What does this mean in real terms? Every 1 TB of data today will be 7.1 TB of data in five years, and will continue to grow exponentially thereafter.
- Active Archives will gain momentum throughout 2012 as more organizations approach petabyte capacities and seek new ways to manage, index and access their vast data volumes.
- The use of tape backup and archive within cloud infrastructures, which are also predicted to grow, will increase since tape provides the most economic and reliable storage for large data volumes and extended data retention periods.
- Hardware-based data integrity verification will become a requirement for "best practice" archive storage.
- Traditional backup practices will continue to shift. Data centers will increasingly move to online, file-based archives for long term data retention instead of utilizing offline backups in proprietary formats.
It's always a pleasure for me to look back on what we’ve accomplished, and what we have to look forward to. As we continue to build strong, long-term relationships with our customers, all of us at Spectra will work hard to drive even more innovation into our data backup and archive solutions, offer customers the superior support they have come to expect and help lead the next round of transformation within the storage industry. We are honored to help our customers achieve success year after year. And I consider it a measure of Spectra’s success that we have been and will continue to be here for the long-haul!