With Ex-Isilon Chief Patel, Elemental Looks To Enter New Industries

Elemental Technologies has grown to more than $20 million in revenue by supplying software and hardware that helps video speed its way down the digital stream.

With the addition of Isilon Systems co-founder Sujal Patel to the board of directors, the company is looking for guidance in expanding into new businesses, such as helping the government handle vast amounts of high-resolution video from national security operations.

Patel—who is leaving Isilon acquirer EMC, but will still consult with the data-storage giant over the next year—already did what Elemental chief executive Sam Blackman wants to do with his company.

“I really admired what [Patel] did at Isilon,” Blackman tells me. “Specifically, the fact that he was able to take a company that was really focused on selling into the media and entertainment vertical, and leveraging technology that had applications more broadly than that.”

Elemental CEO Blackman

Portland, OR-based Elemental’s core business for the last six years has been software and services to help video providers easily customize content for the growing range of devices people are using, from laptops to tablets to phones. The company’s biggest customers are in the media and entertainment industry.

“But over time, video technology will play a critical role in verticals such as government, enterprise, education and e-learning,” Blackman says.

The government sector, and the huge amounts of video used in national security in particular, will be a focus in 2013. Elemental took an early investment from In-Q-Tel, the nonprofit venture capital firm set up in 1999 to help the U.S. intelligence community drive technology innovation to serve its needs. (I went to see the new James Bond movie last night and wonder whether the “Q” in In-Q-Tel was a nod toward the famous MI6 Quartermaster.)

“We did a project early on to expedite the processing of video for the United States intelligence community,” Blackman says, explaining the In-Q-Tel connection. “We haven’t really invested in going after additional work in the government space since then.”

But he sees a perfect opportunity for Elemental’s services “in the ever-increasing amount of video that’s being captured by all sorts of different devices at different national borders, from unmanned flying vehicles, that sort of thing, [at] resolutions that are very difficult to imagine in the standard consumer space.”

The company tripled revenue in 2011 to $10 million. Blackman says Elemental, with just over 90 employees and lots of openings, is on pace to “more than double” revenue this year.

Patel says he’s looking forward to time for himself and his family after 12 years with Isilon and EMC. But it’s clear he’s also staying engaged in the Northwest technology scene. The Elemental board seat is his second—he also serves on the board of Extrahop Networks.

Sujal Patel

“I’m pretty active in investing in companies and helping entrepreneurs get off the ground,” he says. “That’s my focus for the next year, in addition to we have a new child on the way, which could be anywhere from today to three weeks from now.”

Patel, who participated in Elemental’s $13 million C round in May, says he was attracted to the company because of the “huge opportunity for innovation” in a media and entertainment space that “completely moved”—in the course of a decade that Isilon was selling to it—“from an analog world to a digital world, where content is born digitally and it stays digitally through the entire life cycle.”

More work needs to be done to make that digital life cycle seamless across the proliferation of devices and platforms in use today, and into industries such as healthcare, he says. This broad market is “actually pretty fragmented right now,” Patel says.

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