Charles Fitzgerald

EMC hopes to distinguish itself from Amazon.com, Google, Microsoft and others in the cloud computing arena today with the formation of Decho, a new Seattle subsidiary that promises to help people store their photos, videos, financial documents and thousands of other digital files.

Decho's Charles Fitzgerald says the new unit has a unique advantage over others because of its singular focus on protecting people's personal information in the cloud.

"Big, successful companies tend to have to morph everything to their franchise," said Fitzgerald, who previously served as general manager of Microsoft's platform strategy group.  "God knows how many times I've seen that at Microsoft."

Decho is the combination of two companies that the Hopkinton, Mass.-based EMC acquired in the past 13 months: Paul Maritz's Seattle-based  Pi Corp. and American Fork, Utah-based Mozy.

Because of that legacy, Decho is no ordinary startup. It employs more than 100 people, boasts revenue in the tens of millions and has already stored 10 petabytes of data on behalf of some 900,000 users. Unlike many startups that are scaling back, Decho is using some of EMC's $5.4 billion war chest to expand staffing while at the same time evaluating acquisition opportunities.

"It is good to have the mother ship there," admits Fitzgerald, who serves as vice president of product management at Decho. (The company is actively recruiting a CEO who most likely will be based in Seattle.)

Decho is taking a different tack to cloud services than some of the big competitors, creating a secure one-stop destination where consumers and businesses can access all of their files. That's a big problem as the amount of digital information one produces over months and years piles up on a variety of devices and Web sites. 

Since those devices and services tend to come and go, Fitzgerald said that people face storage challenges related to their personal data.

"Take Flickr. Given Yahoo's straits, where is Flickr going to be in two years?" asks Fitzgerald, adding that it is possible that something bad could happen to the popular online photo service. "I don't want to be dependent on the service. I care about my information." 

But the concept of Decho -- which stands for "digital echo"  -- goes much further than backing up information. Over time, the company -- which currently charges individuals $4.95 per month for online back ups -- plans to help people organize and enrich their growing mountain of personal data. That's where some of Pi's technology comes in.

And it is an arena where a number of technology giants are headed, from Google to Microsoft to Amazon.com. Fitzgerald thinks each is taking a different approach and none has the technical chops -- the "software smarts" in his words -- to operate at a massive, cost-effective scale like Decho.

Here's what Fitzgerald had to say on each of the big competitors in the cloud computing arena as well as a few startups:

 On Google:

"People look at Google and say: 'Oh, Google has built this great generic cloud infrastructure.' They haven't. They have built a great infrastructure totally optimized for search... You see this when you are trying to put Gmail on top of that infrastructure. It had operational issues. But the even bigger issue, is they have a cost issue. It is just inefficient."

On Amazon.com:

"Amazon, I think will stay wholesale. I think they see the big opportunity (moving) from catering to startups to catering to enterprises. That is really where there push is.... An awful lot of IT is going to move out of the enterprise data center and into someone's cloud data center. But that is lots of relatively small applications as opposed to super big applications. And given the economics on Amazon, that is probably a pretty good choice to pursue. What you are not going to see is someone who gets their start on Amazon and starts to scale up, the economics just don't scale. You got to get off of it. You got to start squeezing costs out of it."

On Microsoft helping people store personal information in the cloud:

"We will see if they do it. From a focus perspective, they are focused on creating advertising inventory. And some people kind of freak out.... If you think about the data you care about, you want to protect and preserve it. I think there is also an issue where people worry about free services because they are capricious."

On online storage upstarts like Box.net and Xdrive:

"There are lots of people who do online storage of some kind. It is a really messy category.... I guess it is an interesting capability, but it is not a business.... What is great about backup is that there is a value proposition, customers understand it and they will pay for it. If you look at these services, whether Box or Xdrive or anybody else, and whole bunch of these guys have come to us and tried to sell themselves to us, they have lots of nominal users and very little data.... They have had a tough time getting to critical mass ... so i think a lot of those guys are going to disappear in the next couple months, which is good because there is so much noise out there."