PETE PAISLEY:

Welcome to The LTO Show—the premier podcast for leaders in the tape and storage industries. I’m your host, Pete Paisley. Each episode, I bring you conversations with industry leaders who are contributing in special ways to the tape storage community. Our goal is to deliver fresh insights into the business case for LTO tape storage—and today, I’m excited to welcome back Nathan Thompson, founder and CEO of Spectralogic.

For Nathan Thompson, the focus wasn’t on growth at all costs, it was about building a legacy.

Give every employee, even entry-level workers, stock options. “It’s probably the only time in their life they’ll own something like that,” Nathan says. Treat customers like decade-long partners, not one-time transactions. Stay private. Stay focused. And build something that lasts.

The result? Spectralogic—a company that’s remained 100% privately owned for over four decades, where employees share in the success they help create, and where customer relationships span generations.

Pete Paisley (00:01)

So as you were being more intimate with customers and choosing your approach to customers well in those days, how did your Salesforce overcome the challenge of kind of selling a point product at the time, right? You didn’t have a lot of the complimentary data storage stack and tech stack that an IBM or a StorageTek had.

How did you compete there? And do you think this challenge led to your development of that complete storage solution that you have today?

Nate Thompson (00:40)

Yeah, very much so. Now, we have always had a lot more capabilities built into our libraries functionality that brings either more robustness or better data integrity for our customers. And so we could almost always differentiate on, you know,

Here is our competitor’s device, and it’s going to be less expensive. And here is our system. And it’s frankly going to be more expensive. But in the end, it’s going to save you cost, and it’s going to protect your data better. And so we have in our larger libraries just a tremendous amount of capabilities that, you know, if you write a tape, you can go re-scan it every so often and make sure that you’re not having any data, you know, getting outside of the error correction span, if you will.

And we do amazing things with tapes before customers get them. They all have a born-on date built into the…

We write it in, we always write a tape and read it before we will sell it to a customer to make sure that there aren’t any dropout areas or damage or whatever. We charge a little bit more for it, but it is, you know, when you’re putting as much data on something that, you know, it needs to be very robust.

But long term, you know, it’s probably the Hall of the Wild or something, we came to realize, and this is probably a chapter that we’re still writing, although we’ve done a lot in this, we decided that we needed to start solving problems or help customers solve problems, and ideally using tape.

You can look at tape and it’s by far the most cost effective storage. It is, you know, it’s probably a quarter to a sixth the cost of spinning disk from a purchase standpoint. It is a much longer lasting technology. It’ll last 30 years. If in a controlled environment, you know, kind of a room temperature environment, you may not have something that can read it in 30 years.

But it takes one to three percent of the power of spinning disk. And it really is where data will go. It may not be read or it be migrated, but it’s the long-term place for data. And there are rumors that the cloud…

Pete Paisley (03:41)

Right.

Nate Thompson (04:03)

Like the glacier interface and the cold storages on tape and I tend to believe those rumors. So there’s a lot more of it out there that’s being used at a cloud level.

The challenge with this is you can take a tape drive and a tape library and to build a really viable solution with it you need… Maybe it’s come down now with things like CLAWD and AI, but you know, it’s a 10 to 15 year process.

And we’ve seen the hyperscalers when they’ve looked at that as a media spend 10 or sometimes 15 years writing the software to manage tape.

And so starting in about 2010 or 11, we had gone from just this one sort of small part of being a tape provider to a relatively larger company, not at the time the size of a StorageTek or IBM, but we started investing in solving this connectivity problem.

And that became our Black Pearl product. And so we’ve put more R&D into that than any other product in the history of Spectra. And it’s by far the most complicated thing. But it allows this tape medium to be used in a broader context.

And so we have customers all over the world that are able to use tape in different ways outside of backup and maybe outside of archive. Sometimes it’s used for backup.

So, you know, we have in the media and entertainment space, we have maybe 800 to a thousand worldwide media and entertainment customers that are using that software. We’ve built interfaces to some of the media asset managers like Avid, many of the others, but it’s a great media for what they do.

They shoot lots of video, they keep some of the video, and they produce content and they may go back to it. So we’ve opened it up to a lot more applications than just backup.

And so we really see great opportunities for giving, you know, again, I don’t want to say this has been a short-term path, but you look at so many things, you know, imagine what you could do if you could store 50 petabytes at a quarter of tenth the cost of spinning disk. Imagine what you could do if you could even store five petabytes.

And across all kinds of industries and markets, there are people who have need for that. And the level of complexity of writing a software to manage tape is such that there’s probably only 30 or 40 who’ve ever done it.

And there’s a lot more software. I mean, let’s take this platform, Riverside, maybe Riverside, and I’m not, this isn’t a pitch, but Riverside wants to store all of this video they collect. Sure, they can use AWS or Microsoft or such, but it’s really expensive. And it’s even more expensive when you bring it back.

So data is growing. Building a system or building systems that allow customers to store data at a fraction of what it would cost to store in the cloud or on spinning disk — I think there will always be a big market for that.