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Panzura CEO Patrick Harr said he suspects the COVID-19 outbreak will forever change the way IT responds to disasters.
Even before the COVID-19 outbreak, Harr said he sensed an uptick in customers looking to expand their abilities to enable employees to work from anywhere at any time. That has helped the cloud file storage vendor's sales over the past year, and the pandemic is accelerating that trend.
Panzura claims subscription revenue for its cloud file system and data management software grew 237% and enterprise customers more than doubled their global cloud data capacity since last year. Now Harr says Panzura's current quarter could be its best ever, despite ominous economic signs.
Harr said customers are expanding and new prospects are accelerating deployments of Panzura Freedom software to help their employees collaborate, as many adopt work-from-home policies in response to the COVID-19 pandemic. Panzura struck its largest deal in history about a month ago with a large engineering firm, according to Harr.
"Certainly this pandemic has highlighted the need for business continuity," Harr said in an interview with TechTarget. "Clearly, we're focused on helping our customers work through this pandemic, and I pray that we get through this with as minimal disruption as possible to their lives."
In response to the COVID-19 outbreak, Panzura began offering a free Cloud Filer software instance for six months in either AWS or Microsoft Azure for customers that need to provide remote workers with fast access to data. Harr discussed other ways in which he expects the pandemic will have a profound impact on the storage, IT and business continuity planning. It may even, he said, "drive the final nail in the coffin of a pure data center model."
Are customer requests different than what you heard prior to the pandemic? Or, are you simply seeing an escalation?
Patrick Harr: It's more an escalation of this sense of urgency to ensure that employees can work from anywhere at any time. You used to have your users and your employees basically go to the data for the application, and it was in the data center in the office. In global cloud file systems, we'll bring the data to the user at the ultimate edge. You have the applications and the data to be able to successfully run in a remote scenario. We also have a mobile client that ties directly into the global cloud file system. We've always had the capability to do real-time collaboration and global file locking in the global file system, and now with the mobile client, you can do check-in and checkout of files as well. There's full disconnect, meaning no bandwidth. So, it gives complete uninterrupted business continuity. And, if that bandwidth comes back, obviously, you can check back in. We've spent a lot of time particularly this last year focused on business continuity and cloud mirroring and the mobile client. We're just now releasing that in full force.
Patrick HarrCEO, Panzura
What was very interesting about two to perhaps three weeks ago is this started becoming a board-level conversation, particularly for more leading-edge kind of planners. It was almost a seismic shift of how it went from IT-level conversations to board-level conversations in terms of what needs to be done. Much like 9/11 did, this pandemic will forever change business continuity planning and how we have to deal with a crisis.
In what ways do you think the COVID-19 pandemic will change IT?
Harr: Number one, I think you're going to see full SaaS-ification of the world -- a significant acceleration of software as a service (SaaS)-based services. Obviously, we've already seen a strong push of that. But I think this will further cement that as a way of adopting and consuming applications, business processes and data services. Second, I think you will see even further adoption of public cloud in particular, given the inherent natures of how they're built and scale, to handle significant peak loads of demand and bandwidth, etc.
The second piece goes into business continuity. I'll draw the analogy of moving from a data center 30 miles or kilometers away, which is what happened after 9/11. It was more data center to data services continuity. As we've had mobility come out, and now with this crisis, it will come down to not just data center to data center, or last-mile business continuity planning. I think it will become last block and last user, up to that remote worker at any and all times. This is somewhat counter to a couple of years ago when Yahoo, etc., was calling for everyone to come back into the office. This will change some of the dynamics of the workforce. I think you will actually encourage, not discourage, more remote working. I think that in turn will change some of the business practices for how people work together. Video will become more important technology. We're going to have sea changes that will live with us for a long time.
Has Panzura's customer base remained consistent across vertical industries, or has it changed?
Harr: When I joined the company four years ago, we were strong in engineering and manufacturing, building around the notion of helping large-scale design teams get projects out on time and on budget. Now that trend has continued into other verticals: financial services, where we brought on a very large Wall Street bank, some of the largest healthcare companies, media and entertainment, and subsets around gaming, with more collaborative team design. Software development is underpinning that. We have some large chip manufacturers that have distributed global teams.
The second key thing that's helped us expand across vertical segments is consolidation and the migration to the cloud. I think the pandemic is going to further accelerate, if not drive the final nail in the coffin of a pure data center model. Because companies are embracing cloud-first and cloud-native strategies, that's certainly benefited what we've done with them, because a majority of applications are file-based. One of the key things we do is translate files, which is NFS and SMB, into object, which is S3-compliant cloud storage. We enable them to take advantage of the deep, cheap, scalable, resilient object storage but still provide high-performance, file-based NFS and SMB services. What we find is the majority of customers need to transition their file-based applications into a cloud-based world without rewrite.
Where would you say your customers are on the continuum of on-premises versus hybrid versus public cloud?
Harr: Roughly 15% of our customers are in a pure private cloud, where they need what's called dark-site support, meaning no communication through the firewall. These are the [companies that are] heavily regulated, compliant, secure. We do have some three-letter acronym government agencies and banks that would fit that profile. The vast majority -- about 75% of our customers -- are hybrid. They are shifting into a public-cloud paradigm. High-performance access to data and applications at the edge, whether in a data center or an office, is a very significant portion of our business. We've certainly seen hybrid is real. That's what we run in a strong hub-and-spoke context. What's interesting is that the pure public grew significantly last year, meaning they're running just pure in-cloud instances. As an example, a large tax preparer is running us in Amazon [U.S.] East and West as well as in Europe to provide the same global namespace and single common access to the data for the application.
Do the pure public-cloud customers tend to be small or new companies?
Harr: There are newer companies that are more born in the cloud. There's some that are container-based, where they need NFS mounts. The second category is mid to large companies that are getting out of the data center business. They have a lot of applications that are file-based, and they simply need to get them in that public cloud context without rewrite.
Who are your main competitors these days?
Harr: There's still a large swath of status quo -- the NetApps, Dell EMC Isilons and Unity, more traditional file-based storage. They rely on multiple copies of data everywhere, replication, different pieces of backup software. There are so many different things inside that stack, which becomes pretty costly and complex.
Probably our biggest direct competitor is Nasuni. We were designed at the outset for the enterprise, whereas they were designed more from a small, medium business kind of context and from a backup/archive perspective as opposed to primary files. They've really pushed to try to catch up, adding cloud locking, et cetera.
The final area is the public clouds themselves, in terms of offerings and file services. If you are a customer that is comfortable with being in a single stack, [such as] all in Amazon, there's something to be said for having everything in one location and using all their services. I'm a firm believer in multiple clouds, including hybrid and data center.