David Richards smiles and emits a wry chuckle. The chief executive of Wandisco, the AIM-listed cloud computing firm, is recalling the time he witnessed a traffic accident outside his office in San Ramon, California.
“This woman just reversed out of a parking spot, put her foot straight down on the accelerator and smashed into someone in front of me. She never looked.”
When the shaken but thankfully uninjured victim appealed to him as a witness and asked for his number: “I said ‘I’m with Wandisco’. Of course, she was looking for this Mexican guy called Juan Disco for the next six months.”
With a market value of £244m, Wandisco may not be a household name but it is one of Britain’s biggest listed technology companies. Richards, 48, a serial entrepreneur who grew up in Sheffield but who has been based in the US for nearly 20 years, owns a chunk of the business worth an estimated £17m.
“Wandisco is an acronym,” he explains somewhat wearily seated in the Telegraph’s London offices. “It means Wireless Network Distributed Computing. It’s not about 1970s disco equipment. Yeah, I know it polarises people. Some people think it’s fun and great; some people think it’s a bit tacky.”
Either way, the dual Sheffield and San Ramon-based firm has nothing to do with the music business. Instead, Richards and his South Indian co-founder Dr Yeturu Aahlad, who formed the business in 2005 after a chance encounter, have developed specialist software that allows businesses to shift vast quantities of data to the cloud with no disruption.
Customers might include a big bank which wants to shift all of its data into cloud storage – but to be able to keep on serving customers and operating their business while it is doing it.
If that sounds like a niche business, it is not.
Around the world, cloud computing – where companies and governments rent out computing power by the hour and storage by the gigabyte from third party providers like Amazon, Microsoft or Google – is undergoing a powerful boom.
The global cloud services market – which enables companies to access computing power and data storage in much the same way they would purchase gas or electricity – is projected to grow 17.5pc in 2019 to $214bn, up from $182bn in 2018, according to Gartner.
Richards believes Wandisco is on the way to carving out a small but lucrative slice of that colossal market with its proprietary technology.
“We’ve only just scratched the surface,” he says, looking relaxed during a short trip to the UK. “We’ve got less than 5pc of enterprise data in the cloud and over the next five years I think we will see explosive growth.”
Man of steel
A steelworker’s son who earned a degree in computer science at Huddersfield University before going on to help to build three other technology companies – Druid Group, Insevos and Librados, Richards set up WAN Disco in 2005 after he met Dr Aalhad, co-founder and chief data scientist, who was then working for IBM.
“When I met him I was stunned,” he says. “What really impressed me was the intellectual property that he had invented. In this case, it was 20 pages of hard mathematics.”
After setting up the business, Richards, who received a total pay packet worth $891,000 last year, went on to list Wandisco’s shares on London’s junior AIM market in June 2012 and has led the business almost interrupted ever since.
But his tenure at Wandisco has not been plain sailing. Wandisco had originally listed on AIM as a big data play, offering organisations a way to shift data among servers and computers internally without the need for any outages.
Investors lapped it up and in 2013 the company soared to a £1bn valuation, but the market for such services never grew in line with expectations. As that became increasingly clear and concerns grew about the health of Wandisco’s balance sheet, its share price cratered in 2014, prompting Richards to formulate a new strategy to focus on cloud computing instead.
His plan was to use the same technology developed by Dr Aalhad, a graduate of the prestigious Indian Institute of Technology in Chennai and whom he describes as a “maths genius”, to help large businesses needing to move live data, such as financial transactions, into the cloud without suspending servers.
Not everyone liked the idea – including the company’s then chairman Paul Walker who led a boardroom coup against Richards in 2016. It didn’t last long. Just one week after he was ousted, Richards was back with the support of US investors who in turn helped to remove Walker, the former boss of FTSE100 software firm Sage.
Since then, Wandisco has stabilised and sought to reposition itself as a cloud services company, although it’s fair to say the company’s new focus has not yet delivered the goods for investors.
At 541p, the company’s shares remain stranded well below their 2013 highs of 1480p. Last year, the company was operating in the red and posted a loss of $9.4m for 2018 on revenues of $17m, down from nearly $20m in revenues in 2017.
Nevertheless, Richards – a diehard Sheffield Wednesday fan – remains confident that his strategy is right. That’s because the process of moving from legacy IT systems, usually hosted on in-house servers, onto the cloud is becoming so important, yet so perilous and complex, that it is fuelling robust demand for Wandisco’s products.
Easing the load
Right now, companies which want to switch big data sets onto the cloud quickly and with minimal fuss or disruption to their business literally have to use a truck. Amazon, for example, offers a service called Snowmobile, in which an 18 wheeler truck drives up to a company’s data centre with a giant hard-drive packed inside a steel container on the trailer.
Vast amounts of data – think for example a film studio’s complete video archives or the satellite image collected by a government agency like NASA – can then be loaded onto this hard-drive.
The truck is then physically driven to an Amazon data centre, where it is uploaded onto the cloud. The process is designed to transfer up to 100 petabytes–around 100,000 terabytes – per truck, but it still takes time, potentially weeks or months to complete, thus creating problems for businesses which are paralysed in the interim.
That’s where Wandisco’s technology comes in, allowing companies to shift large amounts of data far more easily and quickly. Richards has formed partnerships with many of the world’s biggest cloud providers – Amazon Web Services, Microsoft Azure and Alibaba.
Staying true to his Yorkshire roots, Wandisco’s programming base is in Sheffield, where it employs 70 engineers and other staff. The company also has operations in Belfast, India, China and a sales offices in Silicon Valley where Mr Richards lives with his wife Jane and two children.
Much of his life is spent shuttling back and forth between California and the UK, where he says Wandisco can recruit and retain talented engineers and computer scientists more easily than in the US.
A keen skiier and golfer, Richards clearly enjoys the California lifestyle but while many UK tech companies gravitate towards listing their shares in the US when they go public, Richards rejects the idea that the City of London doesn’t understand tech.
He remains upbeat too about the prospects of the UK technology industry, heaping particular praise on Britain’s universities and education system. “All the raw materials are here in the UK,” he says. “I think there are lots of good things. The quality of research is just phenomenal.”
And what about Brexit? Again, despite all the noise and negativity, Richards remains unfazed. “I don’t think it really is going to impact our ability to create some great companies and great technology.”
“I think the UK is underserviced by people who have experience in founding businesses,” he says. “There are lots of brilliant ideas but only 4pc of people in the venture capital industry in the UK have actually started a business. That’s one of the reasons why we [the UK] have struggled.”
In the US, he claims 60pc of VC professionals have experience founding startups themselves, ensuring they offer far better advice to young companies and invest in the right ones. “I’ve never spoken to a VC in the US that hasn’t been a founder and actually started a business,” he says, although he believes the environment is changing.
“If you have got lots of startups, then they’re going to some of those are bound to be successful. And some of those people are bound to exit and go and be venture capitalists.”