On a Cloud, Q&A with CTERA CEO Liran Eshel

Liran Eshel jokes that he has managed two startups in the last year.

For one, Eshel is CEO and co-founder of CTERA Networks, a provider of a cloud computing storage device, which raised an undisclosed amount of capital from Benchmark Capital last year.

For his other startup, Eshel is “co-CEO” with his wife, who gave birth to the couple’s second son last year at around the same time that CTERA was founded. Their older son started school recently.

“Startup life doesn’t leave much spare time, but I try to spend as much time as possible with my family,” Eshel says. “You can guess my wife and I had a very busy year.”

Truly busy. Earlier this month, CTERA, which has offices in Palo Alto, Calif., and Petach Tikva, Israel, released its CloudPlug device, a small data-storage and encryption module for small businesses or consumers with a lot of demand. The cloud computing company Rackspace has agreed to help market the CloudPlug, which I test drove and is simple to plug in and use.

Eshel has been working in the startup life for about a decade now. Before launching CTERA in May 2008, he was CEO of SofaWare Technologies, a subsidiary of Internet security provider Check Point Software, where he was responsible for defining strategy and overall executive management of the company for more than eight years.

Eshel splits his time these days traveling between Israel and the United States, which he says has made him an expert on airline cuisine.

I caught up with Eshel after CTERA’s launch of the CloudPlug to ask him several questions about being an entrepreneur and raising capital. Here’s part of that conversation.

Q: What’s your schedule like?

A: Running a global company means you are always working. In Israel, we work Sunday to Thursday, but naturally I find myself on the phone and on emails on Friday, as well. My morning starts with calls to Taiwan and China and ends late at night with West Coast calls and webcasts. In the middle, I have the regular office hours.

Q: Besides spending time with your family when you can, what do you do during your downtime?

A: I try not to miss my weekly tennis practice, and I play the piano daily, even if for a short while. I used to play golf, but Israel only has two courses which makes it quite difficult.

Q: What are some of the advantages and disadvantages of having operations in Israel and the United States?

A: The physical distance is always the big disadvantage. And time zones. People have to be flexible with working hours.

The advantage of having dual headquarters is access to top engineering talent in Israel combined with marketing and sales talent in the U.S.

Q: Why has CTERA launched the product now, given current economic conditions?

A: No, the economy was not a factor. We launched because the product was ready. We did over six months of extensive beta testing with customers and partners, and they were very enthusiastic.

The economy may work to our advantage. R&D at the larger storage companies appears to have slowed, and CTERA has established an early lead with regards to innovation.

Q: You got a lot of media coverage when the CloudPlug product was launched. How has that affected your company?

A: The buzz has generated a great deal of interest. We now are in the process of converting those leads. Ask me again in a few months, and I’ll have a better sense of the trajectory. For now, the interest is very exciting.

Q: We’ve noticed a lot of startups join the cloud space recently, and some are well-funded. What’s your take on the cloud storage market?

A: Cloud storage is a natural solution, but you’re right, the market is becoming saturated. Pure online backup is a commodity measured in cents-per-gigabit. What sets you apart is how you deliver it. Local storage and file sharing is key. The cloud isn’t appropriate for day-to-day work; it would almost be a step backward. But for disaster recovery, the cloud is ideal. Too many companies end up in severe crisis because of fire, flood or hardware failure.

Q: Your company raised a Series A round just last year when it was launched and is now delivering a product. Was a quick ramp-up to product always the plan?

A: We had a very clear vision from day one. We knew we would embed software on the local NAS [Network Attached Storage] device to eliminate the need for desktop software to connect to the cloud, and we knew remote management capabilities were required make it an attractive channel play. All we needed were the engineers to make it happen.

Q: What did you learn about fund-raising when you raised venture capital last year?

A: Patience. Plan for a long, arduous process, have a crisp story, and expect to be rejected. And listen. VCs are no strangers to economic busts in Silicon Valley, and they recognize things change quickly. A ‘no’ is only a ‘no’ today. Tomorrow is another day.