Today we announced our investment in Ottawa-based Diablo Technologies, along with Hasso Plattner Ventures and existing investors Celtic House and The Business Development Bank of Canada. From what I can determine, Diablo’s $28m round is the largest investment in a Canadian technology start-up in over a decade. And while that’s interesting, it doesn’t hold a candle to the technology and vision that warrants such a big bet. While Diablo isn’t announcing its products just yet, it has developed a revolutionary new approach to incorporating flash memory into computing systems. It’s called Memory Channel Storage (MCS) and we think it represents a dramatic shift in the storage/memory hierarchy. We are extremely excited to be working with this outstanding team and personally I am really looking forward to skating on the canal!
It’s fairly well understood at this point that flash memory is changing everything in storage. If you don’t know, just ask Artur from Fastly, a portfolio company that’s leveraging SSDs in the CDN domain. In addition to Fastly, we have been fortunate to back two other great teams working on flash related projects, Anobit and XtremIO. Both Anobit and XtremIO had tremendous technology and were acquired earlier this year by Apple and EMC respectively. Flash has been good to us, but we don’t get them all right. We passed on the later rounds at Fusion-IO, which, given the company’s current market capitalization, looks like a tremendously poor decision. They certainly belong in our anti-portfolio.
Anobit, Fusion-IO, and XtremIO represent three different layers of the food chain in the Flash investment thesis: controllers, PCI-E based SSD cards, and SSD-based storage arrays. Diablo represents a step beyond with its novel approach. Memory Channel Storage leverages the highest performance and lowest latency interface in the system, the memory interface, for the tightest possible integration of flash into computing systems.
Much of the prior work in SSDs has treated SSDs as fast disks. Diablo’s MCS takes a fundamentally different approach, and enables SSDs to look more like memory. In-memory computing is all the rage, as evidenced by the tremendous success of applications such as SAP HANA, Tableau, the resurgence of in-memory databases, and the fascinating RAMCloud efforts at Stanford. Run more of your application in-memory and it will run faster, no breakthrough in computer science here. The dirty little secret is memory is still expensive.
While DRAM will always be higher performance than flash, Diablo’s MCS-based products will be dramatically higher capacity than DRAM, persistent, and deliver more IOPS at lower latencies than any other SSD technology. Further, it’s not an either/or decision. Servers running MCS-based products will have lots of memory, and lots of flash. What Diablo is doing is effectively creating a new layer in the memory/storage hierarchy. Virtual machines, databases, and analytics will all see significant speedup. And developers are going to blow our socks off building applications that leverage the unparalled performance of MCS. While I am not at liberty to disclose too much just yet, you won’t have to just take my word for it. The ecosystem of companies that are rallying around the the Diablo approach is pretty impressive and we’re happy to be working with these guys.
We have known Riccardo Badalone, the CEO at Diablo, for a number of years, and got reconnected last year via the team at Anobit. We have watched them deliver on multiple generations of products sitting on the memory channel and are excited to be a part of the next chapter in building the business. While hardware investments have been somewhat out of vogue in the VC community, every so often a team comes along with an idea that is so compelling that it requires you to break from the conventional wisdom. Only time will tell how it works out, but I do know that the level of passion and drive of the Diablo team is on par with only a very select set of companies I have had the chance to work with, and that is a major component of the recipe for success. If you’re interested in learning more about Diablo and MCS, feel free to reach out to me at firstname.lastname@example.org