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

2/19/09Follow @gthuang

It could be the most exciting cloud-computing startup you’ve never heard of. It’s two guys in a room overlooking Lake Union, in a hard-to-spot building next to the Fremont Bridge. And it uses Amazon Web Services and other people’s computers to do data storage, backup, and retrieval in the Internet cloud.

It’s called Symform—a stealthy Seattle outfit founded by a pair of ex-Microsoft employees, Praerit Garg and Bassam Tabbara. Their cloud-storage technology seems pretty cool, and the problem they’re solving is a real one. But what’s most interesting is how they’re applying what they learned at Microsoft to their business model and sales strategy. Symform has already released a closed alpha to its partners, and plans to roll out its public beta software in the next couple of months; it’s just starting to generate some buzz.

First, some more background. Garg came to Microsoft in 1994, having done undergraduate studies in India and a Master’s degree in computer science at Purdue University. He worked for several years on software security and Microsoft Windows before switching to a smaller team in 2003 that delivered technologies to products like Visual Studio and Windows Server. That’s where he met Tabbara, a software architect who’d previously spent time in Microsoft Research. Garg, who became a senior director in the Server and Tools division, left Microsoft in late 2007 to start something new, and Tabbara joined him.

Here’s the problem they’ve been tackling for the past 15 months. If you’re a small business, you’re probably not doing much to back up your data off-site. In case of a disaster—hardware failure, human error, theft, fire—you’re probably screwed. Garg says more than half of small businesses do nothing, while 16 percent back up their data on tapes or disks, which is prone to errors, management overhead, and media failure. About 10 percent do some form of online storage, which has become a fast-rising commodity.

But it’s expensive. Online backup services provided by companies like Mozy (which is owned by EMC and is now part of Seattle-based Decho) and Symantec cost at least $100 a month, says Garg. That’s because data center costs are high, when you factor in things like cooling, electricity, and mechanical maintenance. Using data centers makes sense for big companies, global advertising firms, and the like, but smaller businesses need other options.

Enter Symform, which stands for “symbiotic storage platform.” The idea is a give-and-take: if you want a gigabyte of data storage over the Internet, you offer up a gigabyte of storage on your own machine. “You get something from the system because you contribute to the system—that’s the symbiotic part,” Garg explains. He adds that the idea initially struck him as, “What if we had disks in people’s houses and we aggregated it like micro data centers?”

The trick is that you don’t just trade files, like in a conventional peer-to-peer network. Instead, each file is broken into pieces and sent out in parallel across the network, subject to military-grade encryption and an encoding scheme that builds redundancy into the system. So your data is backed up across many different “nodes” in the network—other machines that are signed up to be part of the storage cloud. Symform’s software coordinates all the nodes, handling the accounting through a centralized server running in Amazon Web Services (EC2). That’s a key technical point, in that the company combinesa 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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