When the CEO of a 1,400 staff US storage company told Mr. Knight of their problems, there seemed to be no easy solution. A hardware-only corporation had realized that the distinguishing factor in the market place was not hardware, but software. "It's like cell phones" they told Mr. Knight. "Everyone's phone uses much the same hardware, but the distinguishing factor is the software features available on the phone." Mr. Knight set about creating them a solution.

There were many individual challenges in finding a solution.

• The revenue stream must exceed $10M in the first year, and grow year-by-year.
• Any software offering had to offer unique value-add in the storage industry; it could not just be another version of what some other vendor was doing.
• It had to be in-line with the company's core competencies, so that it would continue as an integral part of the company, not just an off-shoot.
• Ideally, it should result in selling more of the company's hardware, and it should have enough appeal that it could leverage the existing customer base.
• A "barrier to entry" was also needed so that a future competitor could not just grab the idea and duplicate it.
• Since the company had been making a loss for many months, the solution had to have a very rapid "Go to market" plan. There was no time for a 12 month development cycle.
• Finally, there was no cash available to invest in generating the new revenue stream!

Defining the Product

Mr. Knight conceived a product that was both unique, and in-line with the company's core competencies.

There was no time or money to develop the product from scratch, so Mr. Knight spent several months scouring the US from east to west, looking for suitable partners, and talking to industry analysts.

The deal that Mr. Knight put together comprised OEMing two completely different products, each the leader within their sector & price point, then designing the software layers (“glue”) to make them intelligently work together.

Barrier to Entry

The next challenge was to create a barrier to entry to prohibit any other vendor just copying his ideas, and doing similar deals. Mr. Knight addressed this by inventing new application-to-storage traffic optimization algorithms, patenting them, then optimizing the solution for the company’s existing hardware offerings. This created a product that not only had patent protection, but that could not be matched performance-wise, without a competitor selling the client’s own hardware!

Cultural Changes

“The whole process” Mr. Knight said “was additionally complicated by the fact that the culture of the company was hardware, hardware, hardware. Introducing a software focus and awareness involved a new way of thinking for many of the key personnel. Changes had to be made from the design stage, through QA & support. But the staff rose to the challenge admirably!”

“This is where the rest of the industry needs to go”

In a few short months, a brand new, comprehensive software offering was shipping to Beta customers. Analysts said "This product you have created is where the rest of the industry needs to go, but you are already there!" They advised other vendors not to try to duplicate this, but simply to OEM Mr. Knight’s product. Both IBM & Hitachi became resellers. With projected revenue streams of several tens of millions, patents filed to protect the new technology, and a hardware & Professional Services drag, the corporation was delighted!

More New Markets

However, Mr. Knight still wasn't finished. He re-examined the low-cost high-volume storage market, and designed a lightweight, high volume version of the same product, to open up additional markets and revenue.