All posts by Jeff Ready

The 1 Million Customer Niche

Scale was recently placed in the “niche” quadrant of Gartner’s “Magic Quadrant,” the assessment this research firm does of various technology industry segments. We’re happy to be recognized as an industry player, given that last year they excluded us entirely. Gartner views the SMB and Midmarket customers we serve as a niche of more than 1 million companies globally, and it’s a niche we proudly stay focused on.

I curiously asked Gartner what went into these relative rankings. After all, IDC (a competitor to Gartner) had recently placed us near the front of the pack (and ahead of VMware) in terms of both strategy and capability, and fellow tech gurus TechTarget earlier wrote about us “They have the best technology, not just for SMBs but many larger shops as well.”

So, Gartner clarified: “This is not a direct measure of product attractiveness. Indeed, only 3 or 4 of the parameters that drive vendor positioning are directly product related.”

Alllllrighty then. It strikes me that for a technology vendor to not have the quality, usefulness, or “attractiveness” of their products make up a significant part, if not the majority, of such a landscape report strikes me as a bit odd, given, of course, that we are in the business of providing useful technology products to customers… but to each his own.

I suppose this helps out vendors such as Nutanix, who infamously refuse to have their products publicly reviewed and tested (which also strikes me as strange and leaning toward bizarre, but it’s their call).

So what, exactly *does* make up a vendors position in this report? Your guess is as good as mine. (Is it an algorithm based on the abacus that was also used to construct The Leaning Tower of Pisa perhaps, as a fellow technologist suggested to me?) Our HC3 product has been declared to be the best technology in the space per TechTarget as Product of the Year; we are among the market leaders in hyperconvergence per IDC; and with over 1,200 customer deployments of HC3, we are at or near the top in terms of installed production systems in the hands of actual customers.

Perhaps the answer is within the report itself. As reported by The Register covering the research: “Scale Computing wins praise for sticking to its small-to-medium business niche.”

And there you have it: According to Gartner, the SMB and midmarket constitute a “niche.” By other research published by Gartner itself last fall, this “niche” – which they define as companies with 100-1000 employees — constitutes over 300,000 businesses in the USA and 1 million companies worldwide.

About two months ago I made a post on Spiceworks (an IT website where this “niche” likes to hang out) in response to a prospective customer who was concerned about going with a newer vendor. The response was well received and reposted and tweeted as an example of “giving a damn about the customer.”

I’ve pasted an excerpt of that posting below for this reason: We are very proud to be focused on the needs of the SMB and midmarket. We’ve been this way from the beginning of the company, and we aren’t changing our model to satisfy Gartner and the MQ. Call it a million-company-niche if you will, but it’s our niche and we are happy to be the #1 vendor serving it.

[Repost from Spiceworks thread] “I started Scale specifically to focus on small and midsize IT environments. We built our products that way, we built the support organization that way, and we’ve built the entire business that way. Perhaps it’s not as glamorous as focusing on the top 100 or taking Fortune 500 executives out to play golf, but that’s simply not how I wanted to build this business. When you call support, you get an engineer in the USA who intends to solve the problem on that first call. We only offer 24/7 support and we get very high marks for it. And I personally visit as many of our customers on site as I can, and I see the real environments where our customers run… a converted coat closet at a hospital, a hallway behind the mash tun at a brewery, in a basement of a bank in rural Georgia… all kinds of interesting places (and perhaps none as fun as the brewery)”

Besides defining our customers as a niche, a friend forwarded me the following chart, referenced in the In Tech We Trust Podcast (I do not know if they are the inventors of this humorous chart, but it was sent to me along with the podcast link). It is, perhaps, the simplest explanation of how Gartner places vendors in these reports.

Screen Shot 2015-08-17 at 12.41.03 PM

How to Build a Company without the Unicorn

When my cofounders and I started Scale a number of years ago, we were set on a clear goal: to help an underserved segment of the IT world. There are so many smaller businesses, school districts and municipalities that could do so much if only their IT infrastructure costs were reasonable and their technology user-friendly. So we set out to target the often misunderstood small to mid-sized business segment.

For all of the “radical” and “revolutionary” talk in the world of tech startups, most of this talk is buzzword-laden marketing. In our case, what was so “revolutionary” was that we wanted to build a sustainable, long term company focused on the regional bank, the school districts, and universities.

Building technology specifically to meet the needs of small and midsize IT, we needed a plan that was not splashy or glamourous. Our objective was to help a (large) segment work with a solution that was intuitive as well as one that would grow and expand with the small to mid-sized organization.

I’ll be honest. There’s no “public glory” in serving this market: We rolled up our shirt sleeves and made a promise that we would offer our customers an IT infrastructure that would be as easy as plugging in a piece of machinery and managing one server.

Our objective: deliver real value to our customers.

Investors sometimes say they are looking for “unicorns” – and as the buzz and hype around technology focuses on an area, sometimes gobs of money are thrown at companies in the hopes that they will be one of these unicorns.

The problem, of course, is that unicorns don’t exist. And the buzz of a particular technology segment will ebb and flow over time, with periods of excitement (“the next big thing!”) and periods of doubt (“this segment is dead!”).

For the vision I had for Scale, worrying about this buzz, and the chasing of unicorns was not going to work. We needed to build a business in a sustainable fashion, with an eye towards growth and profitability, and avoiding the pitfalls of unicorn-chasing.

The “glory” for us is not in the public buzz. Rather, our “high-five moments” come from seeing how we solve real problems in IT for our small and midsize customers. We have customers who tell us how our products have changed their lives – and have actually made IT fun again. And after 6 years of being in business, our customer satisfaction has never been higher.

In building the company this way, we’ve “quietly” amassed well over 1,000 customers in 14 countries, and we continue to grow rapidly, but sustainably and efficiently.

Over the years, we have found investors who also believe in both our long term vision and our approach to growth and profitability. I’m personally pleased to welcome ABS Capital as our newest investor. ABS Capital believes in our vision and will continue to help us serve the small to mid-sized IT community with innovative yet user-friendly and scalable solutions.

A Giant Step for Mid-Market Mankind (and Hyperconvergence)

To operate efficiently and be competitive, SMBs and mid-market companies require technology solutions that are easy to install and manage and can grow as their business grows, yet be affordable. These solutions also need to fit their environment, as having a system that is more than they need can be cumbersome and just a costly waste.

Companies turn to creating a virtual infrastructure to simplify operations and their environment, however they typically find they have created a new set of complexities and management issues. They still have multiple systems and various vendors to deal with for their storage, server hardware and hypervisor. The solution there would be to have multiple capabilities — storage, servers and virtualization — in one simple, hyperconverged system that would be easy to manage, scalable and fit the mid-market enterprise.

Today we are announcing such a solution with the release of HyperCore v5, which offers new features and expands the capabilities of our HC3 family of hyperconverged solutions. . HyperCore provides full-stack ownership — storage, servers and virtualization — in an all-in-one appliance. The new HC4000 offers a 2X increase in virtual machine density by doubling the I/O performance, CPU and memory resources per node. Like the other HC3 systems (the HC1000 and HC 2000), the HC4000 is highly available and includes integrated management. What SMBs and mid-market companies get is a data center solution that can help them operate and scale their infrastructure simply and cost-effectively.

We think this is a unique solution in the marketplace, providing a giant step forward in the areas of scalability, ease of use, and cost-effective virtualized infrastructure.  And, judging by the initial demand for these new products, our customers agree.  To learn more, see our press release issued today: “Scale Computing Expands Capabilities of HC3 Family with New Release of Ultra-Easy HyperCore Software.”

The VMware alternative – HC3

Earlier this year, Alex Barrett at TechTarget wrote an article about hyperconvergence, Hyperconvergence tackles storage and server strain. In it, she noted that hyperconvergence was a natural step beyond the converged infrastructure offerings that existed previously. Hyperconverged offerings are more than just a bundle of prepackaged components, bringing in additional technology to integrate the system.

But Alex never discusses just how deep this technology and integration have to go to benefit IT admins? Having now deployed more than 900 HC3 clusters at customer sites, we’ve learned a number of things over the last two years.

Most importantly: Owning the stack matters. Continue reading

It’s Dangerous to Go Alone! Take This – Scale Computing Net Promoter Score

In preparing for the MES show this week, I was reviewing some of the presentation materials and happened to stop on our ScaleCare slide long enough to see the resemblance between our heart logo and the heart containers from The Legend of Zelda (my favorite game of 1987).

If you’re like me, then you also have the Zelda theme song stuck in your head about now.

I was a loyal gamer and loved Nintendo (the publisher of Zelda). If someone had called me on their rotary dial phone in 1987 to ask “How likely is it that you would recommend Nintendo to a friend” on a scale of 1-10, I would have said 10 without hesitating. I was clearly a “promoter” of Nintendo as were most users of the day.

Net Promoter Score

This one question, as simple as it sounds, is a fantastic measure of the loyalty that exists between a provider (Nintendo in the example above) and a consumer (me). It is the sole question of the Net Promoter Score (NPS) and it is something that we measure on a monthly/quarterly basis at Scale to measure our progress internally as well as our rank among other companies in the industry. Customers respond on a 0 to 10 point rating system and are then categorized into groups based on their answer:

  • Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
  • Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
  • Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.

To calculate Scale’s NPS, take the percentage of customers who are Promoters and subtract the percentage who are Detractors. Simple, right?

World Class NPS

Despite the simplicity, it is actually hard to score well. The average computer company scores somewhere around 29 and the average software company 35. I’m very proud to say that Scale Computing is currently at 75! This puts us among other loved brands such as Amazon.com (76), Trader Joes (73) and Costco (71). Not bad company to keep!

Customer loyalty is important to us and we will continue to strive for a world class Net Promotor Score to reflect the world class products and support we bring to market.

With the Zelda theme song still stuck in my head, I’ll remind you: “It’s Dangerous to go alone! Take this”.

HC3: The Vmware Alternative

It sometimes takes a new customer prospect a little while to get their head around how HC3 is more than just converged hardware.  HC3 is a full, integrated alternative to a traditional Vmware environment.  Just yesterday during a demo, one of the attendees said, “This is pretty cool.  I assume this is Vmware under the hood?”

Our CTO, Jason, was on the call and responded, “Nope.  There’s no Vmware involved here at all.  HC3 is stand alone so there is no Vmware to license and pay for.”

“Wow. Now that’s really cool!”

That’s when the lightbulb went off.   No Vmware to license.  No SAN.  No VSA.  No storage protocols.   Just an integrated, scalable platform that’s as easy to use as a single server.

Financial sector finds value in non-traditional IT

Where does the real genius sit in financial services and insurance (FSI) sector IT? Surely with the enterprise and its strategic CIOs, bankrolled by huge budgets and the freedom to choose any vendor technology they desire? I’m going to say no – look small to find the big thinking.

Our experience tells us that SMBs are smarter and much more strategic in IT planning than big vendors ever give them credit for. To make this more tangible, we tested these observations through research of 200 heads of IT at mid-market organisations by the independent technology market research specialist Vanson Bourne. Continue reading

Enterprises are Looking to HC3 for Simplicity

We built HC3 to solve a fundamental need in IT:  a system that keeps applications running without all the complexity that’s latched on to infrastructure with bolt-on after bolt-on solution.  We knew this was a problem most acutely felt in midmarket companies, with complex needs but limited resources.  We built HC3 so those midmarket customers could solve that complexity problem.

Now approaching 1,000 deployments of HC3, we’ve been catching the eye of others who also have these same problems.  Large, enterprise accounts that have been entrenched in legacy and monolithic infrastructure for years.

As it turns out, they hate complexity too, and are looking to eliminate the complexity that continues to spiral within their VMware environments, and view HC3 as the next generation of infrastructure, simplified IT. Continue reading

Are VMware’s glory days over?

Pretty bold right?  Let me explain where I’M coming from.  Last week, there was an interesting article (Gigaom: VMware’s hot seat getting hotter by the minute), discussing the challenges VMware faces today:  the struggle to turn the ship around and create innovation under the iron hand of EMC, conflicting interests, and a cash cow that is quickly becoming commoditized.  The hypervisor as we know it, today, is a commodity.

vmware-stock

Some of the latest buzz has centered around the “software-defined datacenter”, which virtualizes the network, storage and servers-all three of which culminate in making infrastructure easy to deploy and manage. Continue reading

VMware is Dead

We recently presented at an analyst-centric conference in which the lead-in to our presentation was “VMware is dead. Storage is dead.”  We certainly drew some inquisitive looks from the audience. But as we explained HC3 and the underlying technology, the puzzled looks turned into nods of agreement.

Some of the latest buzz has centered around the “software-defined datacenter” which is an extension of software-defined networking that has made its way into software-defined storage and software-defined servers – all three of which culminate in the software-defined datacenter.  In the end, it’s all about the promise of making infrastructure easy to deploy and manage. Continue reading

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