BlueArc Storage: Turning Software into Hardware

In 1998, Geoff Barrall was in London designing data centers as a consultant for customers including General Motors and BMW when he discovered the idea for his next business. One of Barrall’s customers was experiencing bottlenecks on its servers, which couldn’t keep up with the speed of the company’s new gigabit Ethernet network. Barrall set out to find a server that could keep pace. When he concluded his search empty-handed, he came up with the idea for BlueArc, the company for which he is now executive vice president and CTO.

Today, BlueArc makes high-end network attached servers (NAS) that are known for their performance and scalability. While the venture-funded company may have just 1.4 percent of the total NAS market, Gartner ranks it number three behind behemoths EMC and Network Appliance in the NAS market’s high-end segment. “The market we classify as NAS is fast growing with a 16.7 percent [compound annual growth rate],” says Gartner analyst Roger Cox. “That’s the highest growth rate in the storage market. By 2007, it will be $3 billion in size.”

Turning Software into Hardware

BlueArc has so far been able to compete with the big boys mainly by virtue of its unique, hardware-based architecture. Instead of building a server that relies on specialized software for managing its load, BlueArc bases its servers on custom-designed integrated circuits dedicated to simultaneously performing typical server tasks such as networking, file system and server management. Barrall says the migration of software into hardware and the parallel processing make the server run faster and more efficiently. Indeed, Vijay Agarwala, director of GeARS, Penn State University’s high-performance computing center, replaced three of his existing file servers with a single Si7500 file server from BlueArc.

In an effort to further differentiate itself from competitors and to respond to customers’ price fixation, the company released a new product last April called the BlueArc SiliconServer. It lets companies deploy different kinds of storage—such as high-speed, high-performance fibre channel and lower speed ATA—in the same NAS system. Using this multitiered approach to storage, customers can decide which applications should run on higher performance disks and which can run on lower performance—and lower cost—hardware. “In a competing system, everything has to be stored either all in fibre or all ATA,” says Gartner’s Cox. He adds that mixing different types of storage on the same platform allows the CIO to configure a storage system that gives his company the best price-performance ratio.

“[BlueArc’s multitiered approach] is going to allow companies to reduce their initial capital outlay for robust enterprise quality storage, and it’s going to allow them to reduce their total cost of ownership over time,” says Cox. And BlueArc’s products are so scalable (they can deploy with as much as 200 terabytes of storage compared with competitors’ 2 to 6 terabytes), companies don’t need to deploy as many units. “The fewer the number of units, the less costly it is to manage,” adds Cox.

An Uphill Battle

Mark Chandler, director of information systems at drug discovery company NeoGenesis Pharmaceuticals, concurs with Cox. “Backing up one large disk as opposed to many servers makes life so much simpler,” he says. Chandler also likes BlueArc’s competitive prices, which made him decide to stop purchasing from EMC. Barrall says BlueArc’s products start at $40,000 and average between $100,000 and $200,000. Chandler also selected BlueArc over the competition because its servers are compatible with the two platforms his company runs, Windows and Linux.

In spite of BlueArc’s advantages (strong engineering and R&D, solid technology, good customer service and happy customers), the company still faces an uphill battle for survival. Cox notes that to break even, BlueArc is going to have to double its 2002 revenue of $19 million. And to do that, he says, the company needs to increase its visibility and credibility by partnering with resellers that focus on vertical markets, which would open another distribution channel.