Symform, Founded by Ex-Microsoft Pair, Offers Cheap, Efficient Data Storage in the Cloud

2/19/09Follow @gthuang

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a level of centralized control, which is safe and secure, with a large number of Internet nodes that actually do the data storage. “This is true cloud computing,” says Garg. “This isn’t building some huge data center and offering that service. This is actually a storage cloud.”

The concept is not entirely new. It has similarities with San Francisco-based BitTorrent’s content delivery approach, as well as the consumer-focused storage service Wuala, based in Zurich, Switzerland, which released a public-beta version last summer. “Wuala validates what we’re doing at a technology level,” Garg says, but he thinks the Swiss peer-to-peer service is less efficient, less user-friendly, and has an unclear business model.

What does seem unique is Symform’s business strategy. The startup offers a flat-rate fee. “This is highly disruptive,” says Garg. “It doesn’t matter how much data you store.” And it is selling its software not directly to businesses, but only through certain distribution channels—small business IT consultants who offer managed services (17 have signed up so far). “They are decision-makers for these businesses…We bundle our offering with their service. So they make more money,” Garg says.

And that’s the part that comes from hard-earned experience. “The fact that we’re ex-Microsoft guys, we can harness our network. I spent 10 years in Windows Server. I know that space, I bring that credibility,” says Garg. “You want to enable the channel, they’re a built-in sales force. They become the customer support too.” Garg adds that he learned some key lessons at Microsoft from the top, circa 2000. “I got in front of Bill [Gates] every month about security issues. I saw the way Bill and Steve [Ballmer] think, and that changes the way you look at the world.”

The other advantages of Symform are that it’s compatible with existing backup file-generating software, and it lets you work with your files normally, says Garg. Symform’s software runs in the background and detects file changes automatically and backs them up on the network. What’s more, it’s eco-friendly because it potentially cuts down on the power used by additional data centers by making use of smaller servers that are already up and running.

So how big is the market? Garg says there are 8.2 million small businesses in the U.S., and that’s less than 20 percent of the global market. If Symform could eventually get to 1 million nodes on its network and charge each one $10 per month, that would amount to $100 million in annual revenue. “The magic is in the scale,” says Garg. “There’s a lot of money to be made. The challenge is proving it out. Customers have the pain, but will we be able to execute?” For potential challenges, he cites support and scale issues at a global level—for instance, getting partners signed up around the world. “As the network grows, we’re going to learn a lot from real-world usage,” he says.

One thing is clear: if Symform makes its IT-consultant partners happy, it will be well on its way to explosive growth. “I want these guys to make way more money than they’re making today, and do so by solving a key customer pain,” Garg says. “If I do that, by definition I’ll succeed.”

Symform plans to do public-beta testing in March and April, while it gets ready for the software’s general release this summer. Garg says he has filed several patents covering the technical details of the cloud storage network and its architecture. Until now, the company has been self-funded, but Garg wouldn’t rule out taking outside investment. “We’re getting to the point where there are interesting conversations,” he says, around the possibility of bringing more senior expertise and leadership aboard, as well as a broader network of contacts and partners.

Lastly, I asked Garg to reflect some more on his time away from Microsoft. “Breaking away has been huge learning,” he says. “What it takes to go build technology, and figuring out how you’re going to go sell it. As Microsoft, customers came to us. I never had to go find customers. Now I pick up the phone and call partners, and actually have to get them…That’s what I call growth. It’s never easy to grow.” As for the entrepreneurial spirit within Microsofties, he says, “Not enough people take that risk. Microsoft has a lot of talent in there, which is probably going wasted, because the paycheck keeps coming. The hunger goes away. But if I’m not pushing myself, I’m not growing. If I’m not having sleepless nights, I’m not sure I’m spending my life in the right way.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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