Egnyte CEO Vineet Jain: Why the cloud will never be enough for the enterprise

Vineet Jain, the CEO and co-founder of enterprise file storage platform Egnyte, has a bold bet which forms the basis of his entire business operations.

Anyone who follows Jain on Twitter will instantly know what it is, as it’s his handle: @CloudNotEnough. What’s more, the Egnyte chief exec believes that the need for on-premise architecture alongside the cloud will remain the case for enterprises even in a decade’s time.

“[I have] the very firm belief that the cloud is not enough, especially in the enterprise context,” Jain explains to Enterprise AppsTech. “The cloud, being another data tier, will replace a lot of workloads which are currently being served with on prem infrastructure.

“But it will never be a complete 100% substitution,” he adds. “On prem will have a critical, albeit a changing role to play.”

The Egynte chief is at pains to point out he’s not a naysayer on the cloud – indeed, he acknowledges it is an ‘integral’ part of his business. But while the cloud scales up for consumers and small businesses, larger organisations simply cannot take the risk.

“This is the bet I’m placing,” Jain explains. “If you look at the situation today especially in mid-market, then 90% of data is still behind the firewall, and 10% is in the cloud.

“Depending on who you believe in, [analysts] are all prognosticating that 40% of data will be in the cloud by 2015, and the workloads will shift. But key to this entire change in paradigm is a changing – but not disappearing – role of on-premise storage.”

For Egnyte, this enterprise-grade solution is to integrate with local storage ‘to do everything that cloud only can’t’, in the words of a company information video.

Jain notes that 60% of his customer base today runs a combination of cloud and on prem. Using a traffic light analogy he explains his belief that cloud-only doesn’t cut it: green light files which can be placed in the cloud; yellow light files, large files which are on-prem but with a copy in the cloud; and the most sensitive red light files.

“The key way of looking at Egnyte in this ostensibly crowded space is we are not cloud only,” he adds. “You can absolutely go live with Egnyte with your entire workload running through this cloud-based file server with thousands of users. But that’s more of an outlier.”

“That’s the way I think the data will go,” he adds. “There’ll be more acceptance of data in the cloud, people will become more comfortable with security, but the on-prem is not disappearing, it’s not getting marginalised.

“Again, the vector here is the enterprise. If you’re looking at an ankle-biting 25 seat account – yes, they can go to our cloud, or Box, or Dropbox, or whatever that might be.

“But it’s the enterprise, the 1000 plus, where I think the world will be hybrid for the longest time to come.”

Earlier today Egnyte announced the expansion of the company’s business into Europe, as well as the appointment of a new European general manager. Jain admits the progress hasn’t been as speedy as rivals in the storage space - $62.5m raised in capital compared to Dropbox’s $607m total and Box’s $414m – but the roadmap is clear.

“My target here, as long as we can execute, we should be cashflow break even by Q4 of this year,” he says.  “Maybe worse case it shifts to the right.

“The aspiration is even if the madness and the capital markets abates, which I believe it will, even in terms of IPO, we should be profitable, have two quarters of improving profitability and, latter part of 2015, our company has a shot at filing for an S-1 at that time.”

Whether that becomes the case, naturally, remains to be seen. Read more about Egnyte’s European expansion on our sister site, CloudTech.

 

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