Earlier this month, Pivot3 announced that it saw record growth in 2016, with total revenue for the year increasing by 84 percent over 2015, including a more than 200 percent increase in Q4 2016 from Q4 2015. The company, whose roots were established in the surveillance storage market, has since expanded its hyper-converged infrastructure solutions to markets and applications beyond security.
Over the past several years, Pivot3 has continued to expand into a number of different vertical markets, such as government, healthcare and education, and has also seen consistent growth among customers deploying its HCI solutions across multiple mixed workloads, including data center consolidation, database applications, virtual desktop infrastructure (VDI), and business continuity and disaster recovery. However, the spread of the company’s technology beyond the surveillance arena have also led some to question the company’s commitment to the video space.
I recently caught up with Pivot3 CEO Ron Nash to discuss what’s driving the company’s impressive growth, how they’ve branched out from the surveillance storage market and what they’re doing to capitalize on different emerging trends.
Griffin: To what do you attribute the significant growth that the company has seen recently?
Nash: 2016 was a good year. We were hitting on all cylinders with all of our products and in all of our markets. You don’t grow a company’s revenue by 84 percent a year unless everything is working well in each phase of your business. We’re excited about some of the Edge products we introduced to get out and attack a segment of the market that we weren’t necessarily in, kind of on the lower end, where we could get people three nodes and full functionality in a product at a regional or smaller site that we could not do before with our bigger appliances.
Griffin: How has Pivot3 evolved to reach the point where it’s more than just a surveillance /data storage appliance firm?
Nash: We began really as a solution marketer, so when we went into industries – the first we went into was security and video surveillance – what we were bringing was a hyper-converged product. We had hyper-converged operating in 2009 but we never called it that and we never talked about the technology. We just talked about it as a solution and what the benefits of that solution were for the particular application. We used that approach in starting our video surveillance business and starting a virtual desktop business and, finally, starting a backup and recovery business, and we were just marketing them as solutions and not talking about the technology behind them.
I think what happened in the market, in general, is people started realizing that there is a big wave in technology of taking commodity-priced servers that you can buy for great prices and putting all of the functions of data centers on top of them. So as people started to realize that wave and how important it was – some of the early adopters were web-scale companies like Google and Facebook – we were able to come out and talk about how we had been doing that since 2009. We still talk about solutions for particular markets, but in addition to that you saw us talking about the technology, starting a year or two ago, and that’s when we caught the attention of the wider analyst and technology press and it got us more visibility and that contributed to our growth.
Griffin: Some people in the video industry, when you mention Pivot3 today, tend to think the company has moved beyond its surveillance roots and is now focused on other areas of the business. What would you say to those people and what are you doing when it comes expanding your offerings in surveillance?
Nash: Our security business has grown every year. If you just take the amount of business that we sell into the video surveillance industry, it has grown dramatically year after year. It’s a very important part of our business and it always has been. Now, in addition to that, we’re doing other use cases and, in fact, that was even happening to us in security.
If you look at the pattern of our customers, they would buy our products initially as a solution for their surveillance network. They would have so many cameras, a VMS system, etc. and we would be the platform that would operate that. Once they started, they would notice that this platform just worked great. It stood up, it didn’t lose data, was easy to operate, priced reasonably, made good economic sense for organizations, but it was standard servers running stuff and our customers started putting other applications on our platform. Some of the security people initially started putting related-type applications, such as the processors for an access control system, and after they did that they branched further afield into data center applications, such as Microsoft Exchange and other database systems.
Our customer install base, which is predominantly people who purchased us first for surveillance, is buying additional expansions from us because, in addition to expanding their video networks, they are now putting other applications on our platform. About 40 to 45 percent of our revenue last year came out of an existing customer base and it just shows how fast our customers are growing, the use cases that they are putting on our platform and we just went to market talking about the same thing. Yeah, I know, because our competitors say Pivot3 is doing something else in addition to surveillance that we’re not a pure surveillance company and that’s true. But if you look at the genesis of that, that’s where our customers led us.
Griffin: What are your thoughts with regards to the future of surveillance and what will be required to meet the needs of the ever-evolving and growing market?
Nash: The big sea change in surveillance over the past few years that’s only going to accelerate is the value of (video) data. If you go back a few years, surveillance data was primarily used when you had a problem – a break-in, slip-and-fall in a store with a lawsuit or some other kind of incident – and it was used forensically to investigate after the fact. A lot of that data was only retained for 60 days or whatever and at the end of that time it was tossed away. The trend we’re seeing the last few years is that video, combined with the analytics you can put on our platform, is starting to become marketing-type data for organizations.
One of the interesting things we’ve seen in retail is in shopping malls where some of our customers are using analytics to do a lot of the same things you would do online. When you’re shopping online, a website knows a lot of about you – where you’ve been previously, maybe some of your demographic information and your behavior patterns – because the internet carries cookies as a means of identifying people. They physical retailers don’t have any of that but some of our customers are doing things like tracking patterns of how many people are in the mall, their ages and genders, what days and times are the most active for shoppers, and then notifying stores.
People have talked about the Internet of Things (IoT) for years, but in any new business there is always one killer application that drives adoption and video is definitely going to be it for the IoT. That’s what is going to get your IoT platform out there and that’s what’s going to get you hyper-converged systems in all of our remote offices and your central office. Once you get that established for video, then you’re going to add other applications onto it but there is no doubt video surveillance is going to be at the center of this revolution of the Internet of Things.
