Why would Cisco and NetApp join forces to invest millions into a young startup in the data management space called Datos IO? The answer lies in the cloud — and the two public tech companies racing to catch up to customers who want a mix of on-premise and cloud-based architectures.
Datos IO is just three years old, with a data recovery product on the market since last June. But it’s already scored some major customers in tech, such as Ayla Networks, Barracuda Networks, eBay and OpenTable, as well as more notably outside of tech such as Macy’s, payments company ACI Worldwide and Home Depot, which showcased its use of Datos at a recent Google Cloud event. For Cisco and NetApp, Datos lies in the middle of a transition to cloud-based IT that has become of key importance to both companies. Approximately 80% of Datos’ customers are also customers of one of those two established tech players, while 70% are using Datos in the public cloud.
“The first inning of the cloud was small companies starting with an all-cloud strategy,” says Datos CEO Tarun Thakur. “The second is about enterprise focus.”
While many startups are looking to help businesses transition to a cloud environment, Datos believes its system can help create backups in the cloud faster than the competition while keeping more of a two-way flow of information than Amazon Web Services’ offerings, which are incentivized to encourage the migration of data all onto AWS.
Cisco compared Datos to other data management companies in the cloud and decided to support Datos because of its ability to act as a central data management suite across different databases, says director Michael Porat, Cisco Investments’ domain leader for data center and storage. Users of newer databases such as MongoDB and Apache Cassandra haven’t been getting the same visibility into their data, he believes. “I think Datos touches on something which is, how do our customers drive to a transition to hybrid cloud?” says Porat. “It’s disruptive.”
Despite just 25 employees and two sales people, Thakur says that all but two of Datos IO’s customers to date have been large-scale businesses, especially brick and mortar companies looking to make a cloud transition. The startup claims to be doubling its customer base each quarter.
Cisco typically makes about 30 to 40 investments in startups each fiscal year. This is the first investment of its kind for NetApp, which has been a more traditional storage company but is now moving increasingly into software. Both will take a board observer spot with their investments.
The article is an extract from the Feature on Forbes. Click here to read the full feature.