Belluzzo takes Quantum leap from CEO job; COO Gacek steps up, Storage Soup blog by Randy Kerns

By , Monday, April 4th 2011

Categories: Analyst Blogs

Tags: data deduplication, Jon Gacek, Quantum, Rick Belluzzo, tape backup,

Backup vendor Quantum switched CEOs today. Rick Belluzzo stepped down after nine years and Jon Gacek stepped up from his role as COO and president to replace him.

Belluzzo remains chairman of Quantum’s board, and both men said the vendor’s goals remain the same under Gacek: to remain the leader in open systems tape libraries, start taking disk backup market share from EMC’s Data Domain and expand its StorNext file system’s role in rich media and archiving.

“We’re in a different place than we were over the last few years,” Gacek said in an interview today. “The company needed to transform into a systems company [from a tape company]. I feel like with our products and value to end users, we’re in a much different place. I don’t think people understand how good the new DXi [data deduplication] software is yet. In bakeoffs against Data Domain, we’re more than competitive.”

Quantum had to remake its disk backup business strategy after ECM spent $2.1 billion to buy Data Domain in 2009. Before that, EMC sold Quantum’s first generation DXi software through an OEM deal. That OEM deal went away after the Data Domain acquisition, and Quantum has struggled to recoup that lost revenue through sales of its branded DXi appliances. It has since overhauled its entire DXi hardware platform, and upgraded the DXi software to version 2.0 in January.

“EMC tends to just badmouth our technology,” Gacek said. “They say, ‘We used to sell it, it’s not very good.’ But that was a couple of generations ago. We tell the customer, ‘We’ll bring the product in, go ahead and run it against Data Domain.’ Our win rates go up when we do that.”

Still, Quantum hasn’t made much of a dent in Data Domain’s dedupe backup business. While announcing the CEO change today, Quantum disclosed that its revenue for last quarter was around $165 million – near the low end of its forecast and about the same as a year ago.

Gacek said the strategy is to take on Data Domain through Quantum’s own channel, but he’ll keep the door open to other large OEM deals to try and pick up the slack.

“We have to control our own destiny, and that’s why we’re focused on our branded channel,” he said. “I don’t run the other companies, but it looks like EMC is running the table on the other guys. EMC is taking IBM and HP and Oracle to the woodshed [for disk backup]. I’m not chasing OEMs, but I do think the space will get more and more competitive.”

Quantum has an OEM deal with Fujitsu, but that doesn’t come close to replacing the lost revenue from EMC.

Gacek joined Quantum from ADIC after Quantum acquired its tape competitor in 2006. [Quantum’s dedupe and StorNext technology come from ADIC]. He began at Quantum as CFO, became COO in 2009, and had president added to his title in January. Belluzzo said the management transition was planned for more than a year, but Gacek said he had no assurances in January that he would be the next CEO.

It’s hard to believe Belluzzo didn’t feel at least some pressure to resign. Quantum’s stock price opened at $2.50 today – well above the 12 cents it dipped to in late 2009 but still far below the $4.02 it was at before the economy tanked in late 2008. Since he became CEO in Sept. 2002, Quantum’s stock has risen 21% compared to Nasdaq’s overall growth of 145%.

While Quantum still hasn’t been able to record significant growth in the hot dedupe market, Belluzzo said he’s leaving the company in good shape.

“Although we have had our share of challenges, the company is well positioned to play an expanded role in the storage industry,” he said

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