June 15, 2001

LeftHand Networks secures $10 million, launches novel data storage solution

EDITOR’S NOTE: A continuing series of exclusive Business Report question-and-answer interviews with top management of leading e-business companies in the Boulder Valley.By Elizabeth Gold

BOULDER — The days of relying on file cabinets to hold company information are long gone — especially in Colorado, where the data storage business has grown into enterprises such as McData Corp. and Storage Technology Corp.

With a market expected to grow 21 percent annually, from $41 billion in 2000 to more than $72 billion in 2003, the storage industry appears to be succeeding better than most in the economic shakedown. In April, taking advantage of projections, LeftHand Networks launched what it calls revolutionary network storage solutions in April. The company combines technologies of the two leading network storage groups — Network Appliance Inc. and EMC Corp. — into a new solution called Network Unified Storage. NUS combines the best features from traditional Network Attached Storage and Storage Area Network, according to Bill Chambers, chief executive officer.

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Chambers is a well-traveled leader. Prior to joining Lefthand, Chambers was president and chief executive of Boulder-based Tango Technologies Ltd., a project-based, information technology company specializing in solutions for software products, e-business and enterprise applications. Before Tango, Chambers was president and chief executive for General Electric’s Asia Pacific GE-Fanuc organization, based in Singapore. At GE, he had profit and loss responsibility for a business that spanned China, Japan, Korea, Taiwan, Singapore, Malaysia, Indonesia, Thailand, India, Australia, and New Zealand. And prior to GE, Chambers held key management positions in both start-up and Fortune 500 companies. He began his career with Texas Instruments. The Business Report: How does LeftHand’s technology compete?

Chambers: Until this point, solutions in the storage industry have grown at an evolutionary pace, whereas our solution is revolutionary. We’ve blended the power of a SAN with the simplicity of a NAS. Our solution supports both block and file protocols and scales seamlessly with a company’s network, thereby taking advantage of existing infrastructures and leveraging the investment they have already made.

BCBR: LeftHand recently secured $10 million in funding. How did you go about that?

Chambers: The company bootstrapped and kept in stealth mode from late 1999 until late 2000, when we started in earnest working on fund raising. We started looking for accelerators and hooked up with Garage.com — a matchmaking service. They looked at 80,000 business plans over a two-year period, and we were No. 100. After extensive due-diligence, they put us in touch with angel investors, strategic corporate investors and venture capitalists. We finished with the $10 million in early April from Boulder Ventures, Sequel and Vista.

BCBR: What did Garage.com look for from you?

Chambers: The fundamentals — team, technology, marketplace and a business plan. Since Garage.com is so selective and had a high bar for us to get over, that added a lot of credibility to us. If someone has strong contacts locally and nationally, they may want to make their own connections. We first looked at traditional routes of making introductions and meeting VCs or others but decided that Garage.com would accelerate the process for us. I’d do it the same way if I did it again.

BCBR: How have you earmarked this money raised?

Chambers: We intend to finish up product development, establish key reference accounts and launch late in the third quarter this year. We’re in beta testing right now.

BCBR: What types of businesses are you targeting for customers?

Chambers: Financial services companies have large and growing storage needs. Next is xSPs (exstensible service providers) like Yahoo, AOL and Excite, and then it’s the storage service providers — companies that provide storage for rent to corporations. Our objective is to have a small handful of customers by the end of this year, build a base in this industry and accelerate that growth in these industries.

BCBR: How many employees do you have, and how have you chosen which roles to fill?

Chambers: We have 25 employees with the majority of them in technology, because our current emphasis is on finishing our technology, then expanding. We have a strong, seasoned management team, and our technical team has a strong background in storage and network technology.

A lot of entrepreneurs tend to wait until last before building the marketing side of the business, but we started it early. It’s necessary to understand how you will stack up against the competition, what your customers’ problems are, and how your technology will solve those problems.

BCBR: How are you marketing your company?

Chambers: Our initial focus is using a direct-sales model to reach our target. In phase two, we’ll add classical distribution system integrators and value-added resellers.

BCBR: What have you relied on to keep LeftHand on track?

Chambers: As a company is growing, it’s key to put in place efficient processes that make sure everything, including the technology and the business side of things, is following the business plan. Then it’s important to have a way to measure those processes so you know where you are every day. We use our business plan as a high-level roadmap.

BCBR: You’ve been involved with a lot of different businesses. How do you see the economic situation affecting business now?

Chambers: We’re still growing so we’re not affected by the situation now. In spite of the Internet bubble, though, the demand for storage is increasing at an exponential rate. There’s a University of California study that says more data will be created in the next three years than in the whole of history. That means IT (information technology) managers will be looking even more so for solutions that are simple, integrated, flexible and scaleable. Data stored by companies is expected to almost double yearly. We’re the only ones deploying in this incremental approach. Others have monolithic solutions.

EDITOR’S NOTE: A continuing series of exclusive Business Report question-and-answer interviews with top management of leading e-business companies in the Boulder Valley.By Elizabeth Gold

BOULDER — The days of relying on file cabinets to hold company information are long gone — especially in Colorado, where the data storage business has grown into enterprises such as McData Corp. and Storage Technology Corp.

With a market expected to grow 21 percent annually, from $41 billion in 2000 to more than $72 billion in 2003, the storage industry appears to be succeeding better than most in the economic shakedown. In April, taking advantage of…

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