DiskSites: Long distance connection

Up until now, an organization wishing to store data on servers could only share the full capability of the servers with branches 15 km away or closer, due to the limitations of optical access networks in the metro field. These networks enable high-speed access to data stored within the urban network.

If an organization wished to access the data from a distant branch on the other side of the ocean, in some cases, such as those involving large files, it was better to send the information by fax, because it would arrive more quickly. This was not the case for small Word documents; the problem arose, for example, with heavy programs dealing with the production floor of a plant under construction.

These programs, which are sometimes used by dozens, or even hundreds, of users, are constantly changing. All branches must be quickly updated about new changes. There are no current solutions for shortening the lengthy time required for updating files. The files must be sent by messenger service.

Divon Lan, co-founder, president, and CEO of start-up DiskSites, which offers a solution to the problem, says jokingly that DiskSites’ biggest competitor is Federal Express (NYSE: FDX).

DiskSites does not deal in more efficient storage methods, nor does it develop larger storage servers for sites around the world. DiskSites can transmit the information stored on a larger server farm anywhere in the world, at a speed considered impossible until now, even after purchasing added bandwidth.

The company’s chief market is decentralized organizations, with more than one branch, that wish to share information between their branches.

DiskSites cooperates with Network Appliance, which controls a substantial share of the global content delivery market. “Our technology is very interesting to storage companies,” Lan says. “These companies would like to expand and offer their customers technologies for transmitting all their information. We’ve reached a stage in which the basic data storage technologies are mature enough to break through the urban barrier, which is a whole new kettle of fish.”

After two and a half years of product development, DiskSites is moving on to the marketing stage, and is recruiting new management, the first step in the process. Gil Mildworth (VP business development) and Efrat Boker (COO) have joined the company. DiskSites also plans to open a branch in California in the near future.

The product itself is in the final stage of trials with customers, and the company will begin to sell the commercial product within a few weeks. Meanwhile, DiskSites is not discussing its expected sales for next year, since the market is completely new and must be educated.

Lan: ”DiskSites has remained a small company with 20 employees. Nevertheless, our development team is considered around the world to be one of the best for storage networks. Others are copying the things we do. The biggest compliment the industry is paying us is using the technology we invented.” Lan hopes to recruit several dozen additional employees by the end of the year, depending on the rate of the company’s sales growth.

DiskSites says there is no connection between its solution and other content delivery solutions. “You could consider it to be content delivery in some sense,” Lan says, “but content delivery involves the Internet, while we’re dealing with enterprises. Unlike content delivery solutions, our solution has to be bi-directional, since people in companies create content and share it in two directions. We’re positioning ourselves in the data storage and access field. It’s true that content delivery is an interesting milestone for our solution. You could say our product is the application of content delivery technologies to storage.”

DiskSites is proud that its technology is priced attractively for any organization. The technology is available for less than $10,000 for an average-sized branch. “We thought a lot about how to position the price,” Lan says. “Our box is simple – you connect it to the network and start working. Computer people love it. There’s no need to install software.”

Regarding another financing round, Lan says, “We’re already set.” The US-Israeli Bi-national Industrial Research and Development Fund (BIRD-F) recently invested in the company. The company has raised over $5 million to date.

DiskSites is keeping mum about its potential competitors, noting only that a great deal is going on beneath the surface. “Everyone wants to get into the field,” Lan says, “but we’re already here with a product. Our technology is complex. You could say we have a two-and-a-half year head start, and we plan to convert our lead in technology to a lead in marketing.”

Published by Israel's Business Arena on December 25, 2001