Investment Protection Built-in to Every Iomega NAS Appliance: Interview with Iomega CEO Jonathan Huberman Part 3 of 3

There is always concern among small business owners that the software on a NAS appliance will become obsolete or out-of-date after they buy it. Iomega takes that concern off the table. Recently I met with Jonathan Huberman, President of Iomega and the Consumer and Small Business Products Division of EMC, to discuss Iomega’s growing role in networked storage for small businesses. In this final installment of a 3-part series, Jonathan describes what enterprise features are finding their way onto Iomega NAS appliances, how Iomega provides investment protection for products purchased and what Iomega will look like in the coming 2 to 5 years.

Jerome: Can Iomega really bring relevant enterprise technologies from EMC to the small business user at prices they can afford?

Jonathan: Today we deliver RSA Technology’s BSAFE encryption for protecting software upgrades. We put EMC Retrospect backup software in all of our direct-attached and network-attached drives and Mozy online backup on client computers. We also have the EMC LifeLineâ„¢ software on all of these products. This is what we have today. But we’re also working on a variety of additional technologies that we expect to be able to deliver to the small business user in the not too distant future.

Jerome: What kind of enterprise security and storage technologies can be found in Iomega NAS products today?

Jonathan: Every quarter we are adding additional functionality to our NAS devices, leveraging the core competencies and technologies of EMC.
 
One interesting note: prior to our acquisition by EMC, we had five software engineers — which may sound like a tiny number, but is not all that much different than what most of our competitors have. Today, we have over 50 engineers in three regions: New England, which is EMC’s headquarters; Roy, Utah, home to Iomega’s R&D and engineering; and two EMC centers of excellence in China where they are developing a variety of software products.  This is something that I could not have done at Iomega.

Jerome: You mentioned that on a quarterly basis you will bring out new software features. Can you answer this a little more pointedly? If I want to buy an Iomega product today, can I take advantage of those features as they come out in the future or do I have to buy a new product?

Jonathan: The plan is to make new software features completely available on the current product.  In fact, we just announced several new software features for the StorCenter ix2 NAS, including remote access, Torrent download capability and more.  These will be available as a download to current owners of the ix2, as well as incorporated into newly manufactured ix2 units. We plan to continue to upgrade the feature set of our LifeLine operating system and add new functionality as we develop it – with this kind of advantage, there’s no reason to hold back.

Jerome: So there is no reason I should wait until Q209 to buy something if it has the capacity that I need but the functionality that I may want looks like it will be on the roadmap for next quarter, I can go ahead and buy the product now and expect that you will make that functionality available in Q209. Is that correct?

Jonathan: That is exactly right. For network-attached storage, and certainly most direct-attached storage products, traditionally what comes in the box is what you get for the duration of the product.
 
I thought it was wrong for us to continue to move down that path because we are always improving product functionality. It’s silly to not make those enhancements available to existing customers. I would much rather offer customers a product that continues to evolve and improve on a quarterly basis, updated with the click of a mouse, thus truly protecting their investment.

Jerome: What sort of NAS products can we expect from Iomega the rest of the year?

Jonathan: New products with greater storage capacity, as you would expect, as well as more user-friendly features. As hard drive capacities continue to increase and the cost per GB continues to decrease, you will get more drive for the same amount or less money over time – that’s just the nature of our business. The value proposition will only continue to improve from a price per GB standpoint, and you’ll also see dramatic improvement in product features and functionality.
 
The beauty is that our customers are protected.  So if you buy a product now, you will still get the functionality we develop six months from now. Obviously your drives won’t increase in size but you will get new software capabilities. We obviously will continue to innovate on the hardware as well, but the key is the innovation on the software side. Customers will be protected — if we come out with different hardware six months from now, the upgraded software will still work on the hardware purchased today.

Jerome: What do you expect Iomega to look like in 2010 and even in 2012?

Jonathan: Let’s start with 2012. I expect we will be the leading provider of network storage and direct attached storage for the distributed enterprise and small business – certainly one of the top two or three in direct attached storage for the consumer. I expect further consolidation and, given our strength in financial and technological and sales presence, I expect Iomega to come out on top. How that consolidation occurs, whether via acquisition or just natural attrition, I don’t know. But I do expect there will be fewer players three years from now than today. Iomega will be one of the dominant players, if not the dominant player, in the small business space.

Now what does that mean for 2010? We will make progress towards that goal. Given the economy, it’s hard to gauge because it seems the spending spigot is going to be tighter.  I expect that we will take market share from our competitors, and we will also grow our share organically over the next year.

In the first of this 3-part series, Jonathan examined current trends in networked storage for small businesses, how Iomega is differentiating itself from competitors and what new advantages that being a part of EMC brings to Iomega.

In the second of this 3-part series, Jonathan described Iomega’s NAS product offerings and how large corporations can leverage that to more cost-effectively store, protect and manage that data in their remote offices as well as how all size businesses can more easily build and deploy video surveillance solutions.

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