The Big Story

Vast Data's big plans

In a time when many tech companies are posting blockbuster results, Vast Data stands out.

The 5-year-old flash storage company did two funding rounds: an $83 million series D in May and a $100 million series C in April 2020. It's valued at $3.7 billion, is cash-flow positive and recently surpassed a $150 million run rate, which just eight salespeople were largely responsible for driving. (Think of the commission checks!)

The tech appears impressive as well: CEO Renen Hallak said a rack — which he said contained, on average, around 43 individual units — can fit 40 petabytes. Consider that 1 petabyte in a rack was a stunning accomplishment in late 2019, and you'll see how much progress has been made.

Now, as Vast Data charts its path forward, the startup has ambitions higher up on the tech stack. It no longer sells hardware, instead certifying appliances made to its specifications by Avnet.

That means doubling down on software. The company wants to run its own data science platform, Hallak told Protocol, a trajectory that he says will pit it against vendors like Databricks.

• "We think that five years from now ... that infrastructure stack needs to be very different. It needs to enable AI supercomputers rather than the applications that we have in the past," Hallak said. "Vertical integration adds to simplicity. But more than that, it allows you to take full advantage of the underlying technology."
• Achieving that goal, however, is easier said than done. While data storage is difficult, so is AI. It took Databricks years to build its foundational tech. Still, Hallak indicated that Vast Data would seek to build most of the platform itself.
• "It would not be possible for us to just buy someone else … and strap it on top of our system," he said. "We always lean towards doing the critical parts ourselves. And if there are any peripherals that aren't as important … then maybe there would be room for acquisitions."
• The company definitely has cash to invest in R&D. Of the $263 million it raised, more than $200 million is still on hand, per Hallak.

Vast Data may have up-the-stack ambitions, but that's not ubiquitous in the storage industry. Pure Storage, which also offers its own version of flash storage, prefers to be a neutral vendor and let customers pick the products they layer on top.

• "We live in a world of very polymorphic data. Every business has data coming at it out the wazoo from every direction," said Pure Storage vice president and chief architect Robert Lee. "All of these different types of data have best-of-breed ways to analyze."
• Hallak recognizes the problems poised by potential vendor lock-in. And he readily admits that some customers are going to want that open ecosystem.
• Instead, Hallak says Vast Data is trying to pave the way in a still wide-open market: providing the backbone for the very data-heavy AI algorithms of the future, those that will constantly require troves of raw information (video, for example) that require more storage than permissible by database companies today.
• But as Vast Data goes up the stack, Hallak also expects more competition in its core storage business.
• "Perhaps it will come from these database companies creeping down in the same way that we are going to creep up," he said.

Vast Data is definitely targeting a much higher-end market, companies that now (and in the future) need to manage massive amounts of sensitive data on-premise. Current customers include the U.S. Department of Defense, NASA and the National Oceanic and Atmospheric Administration.

• Still, Hallak believes if it's able to solve the problem of the more advanced AI challenges, there would be much broader applicability for the technology.
• "When you solve a really hard problem, you sometimes also have solved a less-hard problem on the way," he said.

Vast Data's technical prowess and sales efficiency make it a contender. But the data storage industry is very different from advanced analytics. It's also a space that probably has too many providers already, all touting the same capabilities.

Still, it's a fluid market and there is a massive opportunity to compile different data services into one product suite. And with the traction Vast Data has gotten, there is clearly excitement around the technology and the startup's future. Now Hallak and his team just have to keep delivering against that promise.

— Joe Williams

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