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Diligent – An Israeli Success in the Field of Data Backup

Diligent is a small, young Israeli company dealing with information storage and protection. The company was founded five years ago and today it is the world leader in its field with an estimated value of $10 billion alongside corporate giants like HDS, HP, SUN, EMC and IBM. We spoke with Doron Kempel, CEO of Diligent International and one of the company's founders, and Ron Asher, vice president of development and director of the Diligent Israel site, on the revolution the company brought about in the field and the secret of Diligent's success as a small company among giants.

What is the secret to Diligent's success? How does a small, young company lead such a large market?

Doron: The success stems from excellence, and excellence starts with a challenge. We've set a very significant challenge for the company and for its development group. After the challenge of course there are the people. We've gathered a group of very special, talented people who create exceptional technology.

How did all this get started? How was the company born?
Doron: It all began with a vision that sounded totally quixotic.
Company founders Moshe Yanai and myself were both managers at EMC and in 2002 we decided to leave and start a new company. All we had at the time was a starting idea and the understanding that the entire world of data storage and backup had to undergo a significant change. It was clear to us that in order to make this change possible we would have to develop technology that would change the rules of the game.
All this took place after the events of 9/11 – the collapse of the Twin Towers. Following these events we realized that the way large companies protected their data had to undergo a substantial change. What happened on that day is that suddenly two enormous buildings were wiped out, with all of the offices and huge companies housed in them, and all of their databases simply vanished. The loss of data is a danger companies don't recover from.

How did your vision to develop the new technology come to fruition?
Doron: We convinced EMC to sell us their development center in Israel, including the most brilliant minds there and the laboratory. That year, 2002, was a hard year. We negotiated with EMC and eventually, at the end of the year, completed the deal and the new company, Diligent Technology, was off and running. We are gathering a group of people and presenting them with the challenge of the coming ten years as we see it: a solution to the issue of data backup.

Who were the people you gathered?
Doron: We gathered a group of brilliant and talented mathematicians, engineers and technology people. Four of them were mathematicians who worked at EMC and two others we brought in from academia. We brought in Ron when we were looking for someone who was very creative and daring who could manage a project like this. We surrounded the mathematicians with very strong engineers with experience developing very large systems. After 18 months we had the prototype for the new technology, a mathematical algorithm that could do something.
Until then we didn't even know whether it was possible. Of course we demonstrated a lot of self-confidence, but really there was no guarantee it would succeed.

Ron Asher (right) and Doron Kempel at the Diligent lab

How did you harness the people? How did you get them to create something out of nothing?
Generally when people believe something is possible they achieve it. The challenge factor, together with the self-confidence of people who had succeeded a lot in high-tech in the past, allowed us to reach this achievement. Another component is of course having the right people, people seeking an adventure who are very ambitious in a certain way, but have the ability to work in a team.

And from there?
Doron: From there it started to take shape and suddenly there was a product. That "suddenly" took three years and millions of dollars – the cost of the sophisticated lab we have here.
When we realized it could work we turned to some of the world's largest capital risk firms and presented them with the technology and the vision and obtained a very large amount in investment funds. Meanwhile we continued to develop and in the middle of 2005 the product was ready and entered the beta phase. At the end of 2005 the first customers began using it, and since then the pool of customers has grown and we don't have competitors anywhere in the vicinity.

What is the company's client base?
Doron: Today our customers include three of the world's ten largest telecom companies, one of the world's five largest banks, one of the five largest vehicle companies, one of the five leading electronics companies, etc. These are very large clients and in the field we deal in what matters is the amount of information you manage for the customer.

How did you manage to win the confidence of such large companies?
Doron: We developed a product that customers can't refuse. This is a product that allows the customer to increase our information storage ability 20 times compared to the existing solutions on the market. It's revolutionary technology and a solution that saves companies millions of dollars. We also work with very high criteria in terms of reliability, commitment and our responsibility to the client, and we have credentials.
Our products are sold in the US and in Europe and by large distributors, including HDS and SUN Microsystems.

In brief and simple terms, what is the technology you developed?
Doron: The technology we developed is called de-duplication, which prevents duplication of data, allowing us to filter out every item of information that goes for backup which is a duplicate of something already in the system. The system does a scan of all of the data and backs up only the changes that do not already exist.

Ron: Our technology allows the creation of 20 times the space in the databases, which is an enormous amount of space. Our technology allows us to locate a certain piece of already backed-up information with unprecedented speed. To accomplish this we developed a search method that is 500 times the speed of all existing methods. A method in which the ratio of content to search index is 250,000:1. This allows us to execute the scanning process very quickly.

Doron: The challenge is to do this for enormous quantities of data at a very fast pace. We have reached a scanning speed of 600 megabytes per second. Huge corporations can have trillions of bytes of information, meaning you need exceptional technology that is 500 times better than the existing technology.

What was the data storage solution until you appeared on the scene with the innovative technology you developed?
Doron: The most common solution until 3-4 years ago was backup on large tapes on which storage was substantially cheaper than on discs.

It sounds a bit like the Middle Ages in today's technological era…
Doron: Indeed. These were large recovery sites with huge warehouses filled with dusty crates containing tapes trucked in to the recovery sites. After 2001 it became clear to the world that this system was illogical, because there was really no way to located the relevant data. It was protected, but unavailable and not useful in any way.

How does your technology alter the world of data storage?
Doron: We compress the data and make it possible to store several times the amount of information on disc. Suddenly the disc is becoming the storage medium rather than tape and since the data is compressed and there's enough bandwidth, it can be transferred on the Web.

This is a real revolution…
Doron: Definitely. We've transformed the whole world from a mechanical-manual state to automation. We made the process of data protection automatic, electronic and real. What existed until now was a big bluff, because it wasn't really possible to locate the relevant information.

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What kind of company is Diligent?
Doron: The word "diligent" points more to the "how" than the "what." It doesn't mean what our product does, its value and advantages, but is a sort of internal expression that indicates what we demand of ourselves. It includes concepts like industriousness, attention to details, vigilance, a sense of responsibility, outstanding integrity, striving for excellence. There's a lot of emphasis here on the "how."

What is the company's organizational structure?
Doron: There are a total of 100 staff members employed at the company. The company's development center is located in Israel and managed by Ron Asher. The center has 65 employees. The main headquarters and the marketing, sales and finance departments are located in Boston and manned by 15 American employees. The rest are local employees around the world who comprise the sales and customer support arrays.

What is the breakdown of workers at the company?
Ron: The development center in Israel has a very broad age range – from students and young college graduates to professionals and company veterans age 50 and over. This assortment creates harmony and balance, which are very healthy and beneficial for us.

Doron: There's an excellent group of people here. There's a very strong focus on challenging goals and this requires people who have an interest in that, who are hungry for challenges. It's not for everybody. We put a whole lot of emphasis on the individual.

How is this emphasis on the individual made apparent?
Ron: We take very good care of our workers. We make sure there's a balance between the employee's professional life and private life. We encourage staff members to make time for activities besides work. There are a lot of young parents here and we encourage them to leave early certain days of the week to be with their family. We organize other events and activities in order to air out and integrate the staff. We want to keep people for long periods of time without having them burn out because we drained them down to the last drop and now they're worn out and don't have the energy to think. We try to create a situation in which the pushes are anticipated. When we approach a difficult period we try to distribute the load among as many people as possible, which allows more flexibility and makes the push more reasonable. In the high-tech world, which is very demanding, we place more stress on productivity, balance and quality than on quantity.

Doron: Very few people have left us during the years we've been in operation. We don't take this as a matter of course. The issue of personal development is very important to us. During the past five years 95% of our managers have been people we promoted from the inside.

What characterizes the organizational culture and the atmosphere at the company?
Ron: The atmosphere at the company is very informal. There's order here and everybody makes his contribution, but in engineering work the place of the engineer hired yesterday and the place of an engineer who has been working here for a number of years is the same. Both of them are engineers and I don't know which of the two will bring the better idea. There's a lot of cooperation and information transfer here. The doors are open and communication is informal. The work culture is very open. This is a place of fertile ground for creativity and development.

What are manager-employee relations like?
Doron: We almost don't think of them as workers, but partners. The level of cooperation and data-sharing is very high. The company includes its staff members in just about everything and there's a high level of transparency here.

How do you retain employees?
Doron: First of all, through the fact that all of us recognize the company is the people that comprise it. We expect a lot from the staff members, the challenges and standards are very high, but at the same time we show empathy toward them and make sure their aspirations for advancement and their personal goals are realized and that there is a balance between work and private life.
Listening, feedback and periodic evaluations are ingrained in the company culture at all levels. All Diligent staff members know and feel they are listened to. Not every opinion is always accepted, but everybody knows that their opinion will be considered as part of the decision-making process. The managers' doors, at every level, are always open.
We hold a variety of social activities, weekends at hotels, trips and parties for employees and their family members, which makes the Diligent staff member's bond to the company more meaningful.

Ron: Of course we don't neglect the material aspect. Compensation is high, both the salary and company share options, and the wage package at Diligent is very attractive. There are also other benefits, such as fitness center membership, department activities, gifts, meals, etc.

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On the development center in Israel:
Ron: The development center consists of three staffs: an R&D staff, a testing staff and a customer support staff. In the storage world there are many complex latent technologies, and development is carried out in various fields. Reliability must be absolute and our challenge demands very high-level engineers. The development staff, the testing engineers staff and the customer-support staff are independent and excel in their respective fields, but operate in harmony. All of them are supported by the storage lab, which is the largest and most advanced in the country.

Doron: The plan is to double the number of engineers during the coming year, without dulling the spearhead and the cultural structure, which is very important to us.

What is the reason for this substantial growth?
Doron: We have a tremendous project load, which requires that we increase the pool of our staff members without slowing the development pace, including vertical development to continue developing the product and horizontal development to operate these abilities on additional hardware platforms.

Ron: Our technology's potential is very big. The product's functional wealth is supposed to grow a lot in 2008 without us decreasing the pace at which we're moving to meet all of the customers' demands as well as the demands of the business partners. To accomplish this we need a lot of engineers. 

What kind of people are you trying to recruit?
Ron: The challenges before us require us to turn to the engineering population, which is quite elite. Because it's a very limited population our human capital must also grow by taking in people who, according to our assessments, are very talented, and teaching them what we know. We have a lot of positions open to recent college graduates and a few positions for students toward the end of their degree requirements to work here part-time. There are also specific positions for which we need certain skills or know-how. The variety here is very broad.

How do you intend to double the number of employees within a year?
Ron: We've already been recruiting for six months at an accelerated pace, and the working assumption is that through this growth process we will enlarge the entire pyramid – more managers and more groups. That way we will be able to buttress the recruitment process, meaning the system that interviews, hires, trains and integrates the engineers will increase. The growth will be gradually, ensuring that we are hiring the new employees correctly.

How does the company's organizational culture come across in the recruitment process?
Ron: Although our recruitment process is relatively long it allows us to get to know the job candidate well and gives the candidate a good opportunity to get to know us. My approach is that every interview is essentially a two-way interview. The candidate can ask questions and raise any matter, and we are very open and receptive. We invite the candidate to walk around here, to see the offices, to go into the lab, to ask people questions. There's a lot of openness here and the feedback we receive is almost always positive.

Why is this the way you've chosen to deal with job candidates?
Ron: Because we think the candidate's ability to reach the right decision is a sure recipe for success. Generally good candidates get a number of offers and they can choose, and it's important that their choice be right, too, not just our choice. It's important that the candidate feels he has looked into the matter thoroughly and really did choose what's best for him. Candidates who come in for a number of interviews feel the atmosphere here is warm, homey and very pleasant. This is very positive feedback because we really do want it to be that way.

And in conclusion, a forecast?
Doron: The revolution is still getting started – this is just the tip of the iceberg. We have 300 large customers around the world, but there are still thousands of other customers whose data is stored using the old method. The market potential is very big and if we are very focused and maintain the current energy level, I believe we can come through – from the standpoint of expectations and our promises to the customers – for our staff members and shareholders.

For the Hebrew Article

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