STORServer Inc. builds on skills of employees

   When four former Digital Equipment Corp. engineers started what is now STORServer Inc. in the mid-1990s, they didn't seek venture capital funds or money from wealthy investors and instead looked for consulting work to bring in cash.

   Started as Storage Solutions Specialists Inc. in 1995, the company shifted from helping clients put together components from multiple vendors into a data-backup system to assembling those components into a single product under the STORServer name.

   The employee-owned company today generates more than $10 million a year in revenue from about 600 customers and employs 35 people in Colorado Springs to design and build devices that back up critical data for midsize companies and government agencies.

   STORServer's products range from a device starting at $25,000 that can protect hundreds of gigabytes of data on up to 10 servers to one selling for up to $500,000 that can protect hundreds of terabytes of information on hundreds of servers. The company was recently recognized as one of 177 CRN Emerging Tech Vendors, a list used by information technology providers to assemble computer systems and networks for their customers.

   John Pearring became STORServer's president and chief executive when it was formed in 2001 to replace Storage Solutions Specialists when it shifted from a small software development and consulting firm to a larger manufacturing company. He previously was vice president of marketing for Storage Systems Specialists, after spending nearly 20 years operating TextPros, a local publishing firm that expanded into technical documentation, marketing and training support for the computer storage industry.

   Question: How long did it take to sell your first product?

   Answer: We sold our first beta (test) version in 1997. STORServer grew out of that because customers didn't want to deal with multiple vendors, but did like our software. We had 20 customers after our first year and the company has grown steadily since then. We have been blessed with success beyond our wildest dreams. Sales have been flat at times, but we never suffered a revenue decline or lost money. We were worried after 9/11, but it really showed the need for disaster recovery. We are not totally insulated from the economy, but our customer base doesn't seem to be affected.

   Q: Why has the company never sought outside investment?

   A: We make that decision annually because the board does not want to give up control of the company. That is the reason we have remained healthy - because the founders still work here and are still involved. When you go to venture capital, they assume only one in 10 investments are going to pay off and perhaps one or two others will make it. Private companies have better than a 50 percent chance of making it.

   We have been approached numerous times by venture capitalists, but we have turned them down.

   It is tempting sometimes to think what $5 million could do for our marketing, but when you think about what you have to give up, it is like selling your soul to the devil. We opted instead to have a large group of founders and employee ownership. We rely on our own brain trust and investment to take the company farther.

   Q: When did sales really begin taking off for STORServer?

   A: The people who founded the company were some of the top (computer) storage specialists in the industry, but they were not experts at sales and marketing. After about five years, we began investing in sales and marketing. We realized it was really hard to eat based on arrogance. People won't give you money just because you are confident and smart. We changed the way we paid our sales personnel and we invested in training and marketing tools for our resellers. It took about two years for that investment to produce results.

   Q: Where is STORServer focusing its strategy in the next few years?

   A: We want to solve our customers' problems through virtualization technology (which allows servers to be split among two or more uses.). It helps to reduce complexity and adopt a more green strategy. If you have a box (server) for archiving, a box for backup and a box for something else, you can consolidate into a single piece of hardware using software. A lot of computing power is unused. Virtualization uses less physical space, less power at a lower cost and is more efficient. Instead of one CPU that is 30 percent utilized and another that is 40 percent utilized, you can have one that is 70 percent utilized for two different functions. It allows us to think about functionality rather than about hardware.

   Q: Does the company have an exit strategy?

   A: We have no exit strategy. We are a brand. We hope our relationship with our customers lasts forever. We don't think in terms of an exit strategy. We want to be a fixture in Colorado Springs. 

   Contact the writer: 636-0234 or wayneh@gazette.com. Questions and answers are edited for clarity.