As CEO of enterprise-storage provider Data Domain, Frank Slootman saw a handsome $2.1 billion exit for his investors after EMC and NetApp conducted a bidding war for his company. Now he’s joining the team at Greylock Partners as a full-time partner and will be bidding for a piece of the next hot enterprise startup.
Slootman will mainly focus on companies that sell tech to businesses, based on his experience in bringing Data Domain up from a venture-backed company starting with $27 million in funding. Data Domain was ultimately acquired by information-management powerhouse EMC in 2009. Since that deal was hard to top, he decided to go into venture capital.
“I’m sort of in a situation where I’m looking for the next challenge to put my hair on fire,” Slootman said. “(Venture capital funding) has historically been a game for people who had elite Ivy-League education, but not with a whole lot of operational experience — I’m hoping to change that and bring others like [myself].”
Part of that is because some startups in the enterprise space, like Yammer and Zendesk, are regularly oversubscribed in their fundraising rounds and have to be a little more selective in which venture firms they take financing from. Slootman was brought on board to offer portfolio companies a little more security in terms of having someone with experience in the field as an advisor or board member.
Slootman said he wants to focus on companies that are working with increasing virtualization. That means pulling applications away from standard computers and running them on remote servers that have more computing firepower. The best model of that today is cloud computing, which can run anywhere from one to thousands of web-based applications and stream the results through the Internet.
“The enterprise data center is still very much where the industry is going — we want to focus on mass standardization of the infrastructure,” he said. “We’re trying to fundamentally separate the application from its underlying physical infrastructure.”
But Slootman is not necessarily a believer in the consumerization of the enterprise, a belief held by some companies that new enterprise ideas should come from consumer powerhouses like Facebook. Yammer, for example, took its cues from Facebook when it created an enterprise social network and has racked up $40 million to date. Slootman said it was a niche market that probably wouldn’t take off as quickly as other types of enterprise companies.
“There’s nothing standardized about it, it’s like they just built it for themselves, but for some companies that might be a very reasonable way to go,” he said. “In the lower marketplace where people don’t have the critical mass to run their infrastructure, that’s probably the safest bet.”