Towers of Power

0
Towers of Power
Alex Bouzari

The towers that DataDirect Networks Inc. designs and manufactures look a lot like those old-school metal filing cabinets.

But instead of manila folders packed inside each drawer, they’re filled with stacks of hard discs to hold massive amounts of information for supercomputers and media companies.

These are the storage units that DataDirect clients such as NASA and CNN use to hold all of the photos, streaming video, complex equations and computer programs to produce nightly TV shows or to send shuttles into outer space.

A photo that a contributor uploads to a website like Shutterfly.com, another DataDirect customer, is just a pebble in the Himalayan amount of information uploaded daily into these information-age storage cabinets.

“The whole world has become images and videos,” said Alex Bouzari, chief executive of the Chatsworth company. “Being able to stow and make these photos accessible is hard, but we give companies access to data faster than they would have otherwise.”

Just one drawer, what DataDirect calls a tray, in the company’s newest storage unit, which stands 7 feet tall, can hold more information than 235,000 standard MacBook laptops.

DataDirect, which has offices in 14 countries, has seen strong financial growth in the last few years. Bouzari said the company had $127 million in revenue in 2009, up from $47 million in 2005.

“They have a niche in the market,” said Kaushik Roy, a datacenter technology analyst for Wedbush Morgan Securities Inc.

This includes providing storage for more than 100 of the world’s top 500 largest computers, according to Top500.com, a website that provides statistics about supercomputers.

DataDirect has formed partnerships with IBM, Dell, Hewlett-Packard and other companies. When the computer companies’ customers call for storage units, they refer them to DataDirect Networks. These deals provide more than 80 percent of the company’s annual revenue. The rest comes from the occasional direct sale.

Once the clients contact DataDirect, the company customizes the storage units for its needs.

“I spend a lot of time with customers,” Bouzari said.

The company’s most significant challenge is keeping up with changing data technology. DataDirect has redesigned its storage units nine times since it launched in 2000. Plans are already in the works for new systems compatible with technology that won’t be available until 2015.

“In a field like technology where everything changes so quickly, you can easily lose the pulse of the market,” Bouzari said.

French connection

Bouzari founded DataDirect in 1997 with partner Paul Bloch. They both grew up in Paris but didn’t meet until they were engineering students at Caltech.

The pair first collaborated in 1988 to start MegaDrive Systems, which manufactured early versions of data storage units. During a business trip to Washington, D.C., Bouzari met with a government customer who complained that he was spending a lot of money on large computer systems. That was because computer technology was shifting from disc-operated systems that limited data to codes, numbers and words to the Windows model that allowed graphics. As a result, the customer needed more storage space to hold a growing amount of image and video files.

“I realized that if we could develop an engine to solve these problems, we would probably have a good business,” Bouzari said.

So Bouzari and Block dissolved MegaDrive and used the money from their first company to design a storage system under the name DataDirect Networks.

But when DataDirect announced its first product in 2000, the then-unknown company found it difficult to compete with well-established data giants such as Hopkinton, Mass.-based EMC Corp.

At that point, Bouzari was cold-calling potential customers and telling them that his storage systems were more efficient than the competition’s. After months of pitching, he sold his first storage units to NASA. DataDirect’s customers now include technology companies such as supercomputer builder Cray Inc., media companies such as E Entertainment Television and the French Atomic Energy Commission.

Nevertheless, the company continued to struggle to gain recognition among its competitors, large public companies. DataDirect’s financial stability was a big concern for many new customers.

“The challenges in the early years were of establishing references from customers,” Bouzari said.

DataDirect started to file for an IPO in 2008, but stopped the process when the recession hit. Remaining private has helped the company in some ways, Bouzari said, because it allowed him to focus on the company’s long-term development.

“Our concern in being a public company is that you’re driven by the quarter,” he said. “This way we’re not being jerked around by what a financial analyst says.”

The company’s four years of growth have prompted Bouzari to reconsider going public.

Wedbush Morgan’s Roy said he expects investors will be enthusiastic about signing on because companies will be stepping up technology spending once the recovery is at hand.

“As things get better, people are willing to try out new technologies,” he said.

Customers offer some positive comments.

When New Hat Colors, a Santa Monica company that performs color correction on commercials, music videos and films, needed to expand its storage capabilities, the company turned to DataDirect.

New Hat Colors has been working with DataDirect since 2008. The company will soon need to upgrade to a larger system. Richard Alcala, chief engineer, said he will likely stay with DataDirect, praising the company’s customized attention.

“They actually worked with us hand in hand to make adjustments,” Alcala said.

That’s the part of the job that Bouzari enjoys most. He travels about three weeks of each month to meet with customers.

“That’s what makes it fun,” he said. “Without it, I would have retired six years ago.”

DataDirect Networks Inc.

FOUNDED: 1997

HEADQUARTERS: Chatsworth

CORE BUSINESS: Manufactures data storage systems.

EMPLOYEES: 257

GOAL: Become the market leader in image and video data storage.

THE NUMBERS: 2009 revenue of $127 million, up from $46 million in 2005.

No posts to display