Drobo: Making Storage Sexy and Very Profitable

Forbes May 16, 2011 Back to press

Over the past couple years, major tech giants – like Dell, HP, IBM and EMC – have spent billions on fast-growing storage companies. They realize that this is a highly strategic industry, especially in light of megatrends like online video, smartphones and even Internet TVs.

Despite all this, the storage industry has missed the opportunity to sell to consumers. Don’t they want cost-effective ways to back-up their photos, videos and music?

Well, there’s a company that has a laser-focus on this market:Drobo. So to learn more, I recently had a chance to meet with the company’s CEO, Tom Buiocchi.

He readily admitted to me that the storage industry is too complicated and expensive. “The first problem is the word ‘storage,’” he said. “We try to avoid the jargon.”

Actually, Tom compares Drobo to a fancy toaster. That is, you can plug disk drives into the slots and then everything seems to work. Back-ups are automated and if there is a problem, you will see blinking yellow and red lights. But for the most part, you’ll see green lights. “We are insanely nuanced about things that go wrong,” said Tom. “A leading zero in the data can destroy your digital library.”

At first, Drobo got traction with power users, such as video editors. But with the surge in digital devices, the company has gotten a lift from consumers. Pricing starts at $399.

OK, so what about cloud lockers from companies like Amazon.com (Nasdaq:AMZN)? Tom thinks these are great solutions. But the fact is that consumers do not like long wait-times and want to have a physical copy nearby – just in case something goes wrong.

“We build appliances that you are comfortable with,” said Tom. “We have videos of 7-year-olds using Drobos.”

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