|Fusion-io CEO David Flynn Boosts Solid-State Storage|
By BRIAN DEAGON, IBD Nov 21, 2011
Fusion-io (FIO) has pioneered a new form of data storage that aims to boost speeds while lowering costs for business users.
Unlike traditional storage systems that deploy racks of disk drives in metal containers, Fusion-io makes data-card modules that plug into computer circuit board slots.
Similar to how graphic cards speed up computer display, Fusion-io cards boost performance by moving the data closer to the computer processor. It does this with flash memory chips and integrated software.
Fusion-io is the first data storage company to come public since 2007. It raised $234 million in an IPO on June 9, pricing at 19 a share. It now trades near 36.
Two of its largest customers are Apple (AAPL) and Facebook. Apple co-founder Steve Wozniak joined Fusion-io as chief engineer in December 2008.
David Flynn, Fusion-io CEO, recently spoke with IBD about the company.
IBD: What is the real-world impact of your technology?
Flynn: In today's information age, all modern businesses gain advantage and efficiency by the quantity and the rate of data they can process. You can make better decisions if you can incorporate more information where it's needed most. Fusion-io is in the business of accelerating the rate at which you can process information, and that has huge value for any business.
IBD: Can you provide some industry examples?
Flynn: If you look at the financial industry, it's how fast can you perform trades and how quickly you assess the risk.
If it's manufacturing, it might be about the telemetry in where your products are.
Another example is bioinformatics. How quickly can you match genes and proteins?
Another is oil and gas and energy exploration. How fast can you process seismic data?
In the Web space, how fast can you answer people's queries on a website?
Those are very important. The Apple iCloud and the Siri voice application on the iPhone, these all require big information systems, many of which are powered by Fusion-io to make those things possible.
IBD: Can you comment on what your company provides for customers Facebook and Apple?
Flynn: With Apple I can't, but I can with Facebook.
With Facebook we are in a number of application areas, probably the most meaningful of which is in their user database. Fusion-io allows Facebook to increase the scale of their user database, to put more users and more information per user within each of their services. We provide them a higher information density, accelerating how fast they can respond.
This is also the case with other customers like (shoe e-tailer) Zappos and Answers.com, which did a case study showing they were able to handle 10 times the number of queries per server. Zappos (owned by Amazon (AMZN) got similar results.
IBD: Where is the pain point in businesses that you fix?
Flynn: When businesses are doing things that are not cost-effective, they look for an alternative.
A lot of businesses are unaware that what they're doing today could cost them a fraction of what they currently spend, and get improved capabilities with it. We've lived in a data-constrained world for so long that people don't know what it's like to have data instantly available in large quantities.
Our task is to help people realize there is a problem, that maybe 85% of the time the computer processor is sitting idle, and that means you are overpaying for everything around it.
IBD: How do you do this?
Flynn: The challenge in the data center is the ability to deliver data from where it rests on storage systems to the computer processors. That's a growing problem because Moore's Law (which says chip speeds double roughly every 18 months) has driven the performance improvement in processors, but Newtonian dynamics have held back how fast you can spin a (disk drive) platter and how fast you can move a (disk drive read/write) head.
Aggregating more and more of these spinning platters and needles has reached a limit, the result being that processors sit idle most of the time.
With the use of flash memory chips we have the ability to revolutionize how data gets delivered into servers to solve this data supply constraint.
We not only pioneered this concept of distributing the flash in the servers so that data can be delivered from within the servers, but we also pioneered how to manage the flow of data from legacy storage systems into the applications directly, meaning you are bypassing even the operating systems, the file systems and so forth.
IBD: How is the competitive landscape?
Flynn: The consolidation we've recently seen in storage is just like what we saw at the end of the mainframe era. The storage system array (like that made by EMC (EMC) is after all, kind of like the mainframe of storage. There is a whole batch of new startup companies who have realized that flash allows them to get higher performance and reliability without the rocket sciences that it used to require.
I also view this as very much like what happened in the graphics workstation market.
You remember there was a day that Silicon Graphics could charge $250,000 for a single workstation and Evans & Sutherland could charge a million dollars for a flight simulator. The reason is it took rocket science to do what they did, and it was very specialized. They were vertically integrated companies with high-margin business models.
That is kind of like the storage market today, but flash storage is like the graphics accelerator card that ultimately liberated the workstation market.
Now you throw a graphics card in a regular PC and whether it is flight simulator stuff or scientific virtualization, it's all good. Flash accelerator devices and the software to manage it make it possible to build storage that is reliable and fast across a wide array of verticals.
Ultimately you will see, like the workstation market, a variant of startup storage companies who all recognize that you can use flash to build a better storage array.
IBD: How will Fusion-io remain competitive in this new environment?
Flynn: We created a value chain for a new technology where being the early mover is an advantage. We think our track record of having foreseen this market in advance of everyone else means that we probably are best positioned to foresee what the next steps are and how to get it broadly adopted.