What’s Behind One NVMe Storage Company’s Meteoric Rise

There is plenty of potential to upset traditional storage via leveraging on-board NVMe devices and while the competition is thick and fierce, there are a few companies that are already standing out in 2021.

It’s never easy to cut through the hyperbole and look at the real numbers for a private company, but if WekaIO’s growth is to be believed, their 350% year-over-year increase in their cloud business over 2020 with on-prem doubling is eye-opening. We thought it would be a good idea to dig deeper to understand how 2020 growth was possible in the competitive storage and file system space and caught up with the company’s president, Ken Grohe. It turns out, some of the company’s successes are situational (COVID and its many implications) but others have to do solely with the “trojan horse” model of getting big companies to invest in something new—a method Grohe well understands from his early days in the storage business.

When Grohe, one of the first employees at EMC, started in the industry, storage was not even a separate business. “It was more of an afterthought” he tells us. “In the late eighties, we created a market where storage became external, a separate market. We wanted to help the server vendors bring storage inside the server over time.” Key to that effort were partnerships with the top server makers at that time. As that expanded and Grohe left, he watched how companies like VMware found their way into the market, eventually dominating it by normalizing their technology as more of a “feature” inside a server instead of a completely different product to buy and learn.

Weka, following the VMware example, emphasized hardened partnerships (HPE is an investor) with the major OEMs, including their backer and Dell, and took advantage of “server feature” status to make NVMe palatable—something people could have without extra overhead. “The fact that they [the server makers] put NVMe devices in their servers changed the game for us. If we were selling a free-standing appliance or software we wouldn’t make it. We needed them as ‘trojan horse’. We’re making a 10X accelerator in those servers using the dormant NVMe devices, which are the trojan horses,” Grohe says, well aware that perhaps “trojan horse” is not the best metaphor in today’s security-conscious world. Still, we get the idea. And it seems to be paying off.

Perhaps this is the only broad way to get massive adoption and use of NVMe—by shipping them out as part of the server with the management, file system, and tooling baked in and ready to go. It’s still too early to tell how the standalone software and appliance makers are doing with their NVMe front ends and interfaces but one thing we feel quite certain about—it has to be a much tougher sell, especially with the storage sprawl that is driving centers up walls.

There are some other unexpected elements to Weka’s growth that are worth pointing out. It’s hard to say how many of these convergences into their bottom line will continue through 2021 (although Weka claims to have a 95% re-purchase rate with those capacities increasing by 500% on average) but COVID certainly played a role—and it goes far beyond just vaccine development.

It turns out that COVID and the related economic and business uncertainties make the Fortune 100 ready to spend, quick to roll out big new initiatives. In theory, this is because it’s the best time to get a leg up on competition, no matter what industry. Grohe says ambitious new AI initiatives have driven growth that might not have been so fast at new customers, including the largest autonomous vehicle company in the world (he’s not allowed to name names, but you’re smart) in addition to some of the first in line to deliver a vaccine to the world. These are huge deals, Grohe says, and they came out of the blue, with individual installs in the 10 to 70 petabyte ranges across a number of industries. “Our growth really exploded in June because the larger companies know the best time to buy is coming out of chaos,” he added.

And while vaccine development installs were a big part of the growth (all the collaboration, large and mixed file types, etc) some of their biggest deals were around what Grohe calls “COVID resiliency” deals. “They knew the vaccine was coming but a lot of algorithms were needed to make sure it could be maximized and distributed. We supplied to the Swiss Institute of Bioinformatics, another huge deal at Genomics England. This resiliency testing had to happen at a neutral place because we weren’t trusting Asia and vice versa.” He says these are 70PB installations.

Here is the other thing to note about WekaIO and its astounding year. Almost every bit of growth was based on greenfield deployments. New fleets of servers, huge and gleaming with NVMe inside. Grohe says two-thirds of their customers are on-prem, managing those clusters on their own with only one-third in the cloud exclusively. Every customer they have bounces between both, he says.

Another unexpected boost from the COVID crisis was a lack of people in offices to procure new hardware. “We don’t have to be validated as a new vendor,” Grohe explains, pointing again to the integration with Dell and HPE as key to success. “We are like VMware, we go inside the box. If you’re Microsoft, that’s one of our customers, and HQ says they don’t have to validate, it just comes with the HPE box, that means no need to go through compliance and the litany of demands. We copied the model of VMware and at a time when you don’t have people around to validate and when some companies are getting $10 million a year in HPE or Dell servers. It’s just another server.”

While it’s not COVID-related, the NVMe story comes at the right time for companies that are looking to expand or start fresh. They tend to have huge investments in storage, much of it mixed and increasingly difficult to manage. With something like what Weka (and others) do, the NVMe is a little racecar inside the server that serves as a “hot tier” while all that old storage investment becomes tiers two and three. Since it can push everything to an object store, it can be used on-prem and in the cloud, which is how more companies want their storage to leap anyway, especially with a single global namespace. It is, in essence, a perfect storm—the right thing at the right time.

And it’s about time. For NVMe storage and all the funky file systems and interfaces that have hit the market over the last few years. Initially, it seemed like they were all pushing a string. It was tough to get people to think differently about something expensive and essentially unnecessary in a server, especially when they’d just been told to go dump all their storage budget into flash and move on. While Weka’s story highlights the value of partnerships, it also shows that perhaps these technologies and all the different ways to deploy and be proprietary enough to stay in business without closing out new lock-in weary storage customers are finally ready for their day.

As for Weka, we wonder what might happen. If their growth is as big as they say, it’s impressive but remember, that’s customer counts and growth of the number of nodes they have a stake in. They don’t own the NVMe devices, they don’t sell appliances, they’re just a software layer. Not to minimize that software but from a business perspective, there’s only so much margin to be found there. Many of the NVMe and file system companies we’ve profiled over time show a whole lot of spending to get the business they have. What the real net is can be difficult to determine.

It might make sense that HPE eventually snaps them up and forces exclusivity (in other words, Dell can’t use). But that doesn’t seem likely, at least not yet. It could be that Dell could make sure an offer (by the way, they are also selling Isilon and other storage gear so this might make more sense competitively). Either way, it could be the year for these companies to shine and at least start working toward breaking even on all the investment they’ve raked in over the years while we waited for this technology to go mainstream.

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