Permabit: Storing Enterprise Data Unerasably, At Bargain Prices
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any data chunk with a shard on the failed node can be reconstructed from the other five shards, which are stored, by definition, on other nodes. If catastrophe strikes and two nodes holding sibling shards fail simultaneously, the chunk can still be reconstructed from the remaining four shards. On top of all that, shards in a RAIN-EC array are written and retrieved in parallel across many nodes, meaning that reconstruction after a drive failure happens much faster than in a RAID system.
Got all that? The basic point is that Permabit’s erasure coding algorithms “are both extremely fast and allow recovery from multiple failed drives or nodes,” according to Floyd. Customers like the RAIN-EC approach not only because it keeps data safer, but because Permabit’s grid-based architecture allows them to scale up their storage systems indefinitely simply by adding more nodes—meaning no more data migration headaches.
Cook says the company is “gaining traction” with RAIN-EC despite the “decided headwind in the marketplace” for enterprise hardware. As companies tire of paying so much for primary storage, Permabit will take over a big chunk of that market, Cook predicts: “We think we’ll inherit as much as 80 percent of enterprise storage by being economically competitive.”
But Permabit might not have had a shot at that market if it hadn’t gone through its own reconstruction a couple of years ago. By 2007, the company’s original venture investors, who included New York-based Baker Capital, “had been in it for seven years and had funds wanting to reach liquidity,” says Cook. “But the company wasn’t ready for that. The market was just starting to happen. We determined that the best thing to do was to buy out the current shareholders, capitalize the company effectively, and recruit a team of very seasoned people to do that.”
In essence, Permabit found a single angel investor—William Reeves, a former managing director at JPMorgan in London and the co-founder of BlueCrest Capital Management—to take the place of its venture backers. “He’s an angel, but he’s also a very sophisticated and experienced entrepreneur himself,” Cook says. “He understands the challenges we face, and he came in as an outside director with a mission to help us. That simplified our structure and let us focus completely on driving our business.” (Cook didn’t say how much Reeves put up to recapitalize Permabit, or what sort of return the original venture investors got on their money.)
So that’s the company’s business secret: find a patient, deep-pocketed backer who believes in your technology—but be ready to show that the technology is catching on.
“Being exposed to the capital markets right now is painful for many companies,” says Floyd. “Fortunately, regardless of who is funding us, we have a product that’s selling, and a sales force that’s out in the field and is successful. If you’re lacking any of those today and you’re looking for capital, it’s a big challenge…We feel very fortunate to have the company capitalized correctly at this time.”
Cook says Permabit has been growing at 100 percent per quarter recently, and that he’d be very happy if the company can continue “knocking down, in every quarter, the next 12 or 15 pieces of business,” including some large-enterprise accounts and cloud-computing vendors. Meanwhile, the company’s engineers are working to make its RAIN-EC technology even faster. Says Cook: “The speedier our product gets”—in other words, the more credibly it mimics primary storage—“the more it becomes central to people’s operations in an enterprise.”