3165: Is Enterprise Storage Due for a Shake-Up? How TrueNAS is Challenging the Status Quo

[00:00:03] How do you build a thriving business without external funding, especially in an industry dominated by tech giants? And what happens when an open-source project evolves into an enterprise-grade storage solution, one that's trusted by over 60% of Fortune 500 companies? Well, this week I'm at the IT Press Tour and on a journey across Silicon Valley.

[00:00:31] And on this particular trip, the spotlight is on IT infrastructure, cloud, networking, data management, storage, analytics and of course, AI. And today though, I'm sitting down with Brett Davis from iX Systems. We're going to be discussing the journey of TrueNAS and how it's become an open-source storage powerhouse that's quietly reshaping enterprise storage.

[00:00:55] With competitors such as NetApp, PureStorage, Dell, HPE and all those usual suspects, TrueNAS is standing out with its unique approach. Delivering enterprise-grade storage without the hefty price tag or vendor lock-in.

[00:01:14] So today, we're going to explore the company's roots in open-source technology, its commitment to affordability and transparency and why it is being used by 60% of Fortune 500 companies. And that's just some of the ones that they know about. So if you're in the IT world, chances are you've heard about TrueNAS. But what makes it different? And why are so many enterprises making that switch? Well, let's get Brett onto the podcast and find out now.

[00:01:43] As part of the IT Press Tour, I'm joining you in your office today. But obviously, people listening around the world. Can you just tell everyone listening a little about who you are and what you do? Sure thing, Neil. Yeah, no, thank you for coming to visit us on the IT Press Tour. It's always great to join that group. It's a really good group. My name is Brett Davis. I am Executive Vice President at iX Systems and TrueNAS. We'll talk a little bit about that separation in a little bit here.

[00:02:09] But I oversee the sales and marketing and product management divisions at iX Systems and TrueNAS. And I was originally part of the founding team of iX Systems in 2002. And one of the things I always try and do on this podcast is take people back to the very beginning of the story. We often celebrate the success of a company and stood at the top of the mountain, but not the climb.

[00:02:35] So if we start at the beginning, can you share your origin story, the origin story of the company? Because I think it had its roots in open source technology and came from quite humble beginnings. I'd love to find out more about those beginnings. We do have a unique origin story. As I mentioned, we're founded in 2002. But you could actually trace our roots all the way back to Berkeley Unix in the 60s. And that's actually before I was born. But actually, our roots do trace all the way back there.

[00:03:04] So back when Berkeley Unix was created, the original Unix is created at UC Berkeley here in Northern California. Yeah, there's a most Unixes spawned from there. And one, there was Sun Microsystems was a company that spawned out. And then BSDI was the other one. BSDI was the company behind the commercial Unix BSDOS. And so between BSDI, Walnut Creek CD-ROM, and really the origin of the FreeBSD operating system,

[00:03:34] between all of those things, iX Systems spun out of that. So after the dot-com crash in 2000, 2001, BSDI decided to sell the software to Wind River. Wind River bought the software, the embedded software, the embedded OS, and then basically bought it to kill it as a competitor. But the hardware division spun back out and lived on as its own company. Now, as the dot-com crash happened,

[00:04:01] and that company really had the who's who of the cautionary tales from the dot-com, the pets.coms, and the Ask Jeeves, and the ones that web van, things like that, that really the poster children for the dot-com crash. And so they were basically, the company was crushed under the weight of its receivables as a lot of its customers went out of business. And so there was an employee asset buyout in 2001, and that was our founders,

[00:04:29] our founder and CEO, Mike Loth, and CTO, Matt Olander. And really, it was a three guys in a garage story. We were building server hardware for customers that were using, at the time, obscure versions of open source operating systems, back when nobody would do that. Dell, IBM, HPE, none of them would do anything other than Windows Server, or commercial Unixes. And so we were doing things like FreeBSD, and Linux, and Slackware Linux,

[00:04:59] and at the time, all these bizarro operating systems. And so we were qualifying our hardware there and made a real niche business out of that. And really built that into a successful business through that niche for some time. And then through all of that, because of our open source heritage, we still were contributing a lot to, in terms of development and contributing code to a number of open source communities and projects.

[00:05:27] And we were advocates for open source, as well as building hardware for open source. And that business actually still continues today. It's kind of our, it's not our growth business. But yeah, we've made a really good business helping companies do that for a long time, until around 2000, oh, it's about 2009, 2010, when the, at the time, the FreeNAS project, which is one of the open source communities and projects that we worked with,

[00:05:58] they were looking for a corporate sponsor. And so we were still a small company at that point, probably 50 employees. And we, they knew of our open source advocacy, and the fact that we had contributed so much. And so they came to us and asked for us to take over the community for them. And so we did that in around 2009, 2010. And we were users of FreeNAS. So we were a bootstrapped business. And we would have used NetApp storage, or we would have used any other, you know,

[00:06:26] commercial EMC at the time, we would have used that, had we been able to afford it. Of course, we couldn't. So we always had to do things on a shoestring. And so back then, we would use FreeNAS storage as well for our own internal uses. And so once we took over the community, though, we realized that, like, that this was a real opportunity. We took our development resources, we integrated the OpenZFS file system,

[00:06:49] which then took, it took FreeNAS from this, this home user prosumer storage that you could also use for, at an enterprise. It took it from that to really, OpenZFS was so capable, it took it from that to really an enterprise storage that you can also use at home. So it really kind of flipped that on its head. And so we built, as we made that transition of the software,

[00:07:19] we really built the community up from there, and then built enterprise versions of FreeNAS that we called TrueNAS at the time. That was back in around 2013 or 2014 when we launched that. And then transition to today, we still, FreeNAS eventually in 2020 just became TrueNAS. Everything became TrueNAS. We had TrueNAS Community Editions, Core and Scale, and then TrueNAS Enterprise as well, which was offered as appliances.

[00:07:46] And TrueNAS, the heritage of FreeNAS is still available as open source software today. And we plan to maintain that as long as we're able to. And then we have the, and we believe in that, we want to make sure that we continue to honor our open source heritage and support that, those communities. And then of course, we have the enterprise versions, which are appliances and a super set of enterprise features.

[00:08:12] And that version is available with 24-7 support and for customers that need enterprise features that ensure uptime, security, performance, et cetera. And really for the past dozen, half dozen years or so, we've been focused in that side of the business. And today, TrueNAS is full enterprise storage that competes with the biggest names, the who's who in storage, the Dell EMC, NetApp, Pure Storage, you name it.

[00:08:41] And so we've made a pretty good business off of that. It's a unified storage with a full enterprise feature set. And I think it's so important to hear that Orangid story because here in 2025, iX Systems, for many people listening, will be known for being used by server customers. But it is taking somewhat of a backseat now. And TrueNAS for storage customers in particular, that is the star of the show now.

[00:09:05] And listening to your presentation today, I think you said it was being used by 60% of Fortune 500 companies and 500,000 annual downloads from 190 countries in one year alone, which is just phenomenal. So can you tell me a bit more about what is it that makes you different from other solutions? Yeah, well, I mean, there are other open source storage software available out there.

[00:09:31] But TrueNAS is really the only open enterprise storage available on the market. And you're right about the iX Systems and TrueNAS brand. And in fact, this is the iX Systems brand sort of fades into the background as we kind of focus on our TrueNAS business because I think I was telling this story at the IT press tour. But, you know, we would go to conferences and to trade shows and we would roll out an iX Systems booth and people would come up and say, who the hell are you guys? iX Systems never heard of you guys.

[00:10:00] And we'd say, well, have you heard of TrueNAS? And they would say, oh, TrueNAS. Yeah, absolutely. We're using that. I'm using that in the data center. I'm using that at home. I'm using it all over the place. Wow, I didn't realize that was you guys. So, yeah, I mean, so maintaining two brands for a company our size when really the TrueNAS business is our growth business, it makes sense to sort of focus on that. So, yeah, TrueNAS is really the only enterprise, open enterprise storage on the market.

[00:10:25] And I think I consider us really the only company that's looking to truly make enterprise storage more affordable. So, and when I say affordable, I'm not talking about complicated TCO models that explain a high price. We're talking about actual savings. And so that's our full suite of products from the data center to the edge to the cloud.

[00:10:51] We even have our TrueNAS mini systems that are used in small offices and people even use them at home. And so really, we're just, we're, we are looking to disrupt the enterprise storage market by just doing things differently and really kind of turning it on its head and really showing a lot of success there. So from our sales process to how we market to, frankly, just to making a free product

[00:11:18] that's available to not only demo, but also use fully with, there's no other companies doing that. And, and it really stems from some of our origin story, which is both in our belief in the open source ethic and the gift to humanity that open source communities provide and the catalyst to technology that they provide. But one of our core values actually that we call it thinking people before profit. And, and so that drives a lot of what we do.

[00:11:47] I mean, we're not a, we're not a nonprofit. We're very much a for-profit company, but we do a lot of things not for profit, which include developing and, and delivering a full featured product in our TrueNAS community edition that people can use for free. And it really just lowers the barrier to enterprise storage for individuals and small organizations to, to train themselves up on, on becoming a storage admin or using it for small businesses.

[00:12:13] And I don't want to call us zealots in that way or ideologues, but I mean, it's probably a little bit true. It drives a lot of what we do is that belief that in reciprocity, that we can put value out into the world. And, and there'll be customers that want to use the product in enterprise situations and that'll come back to us. And so that's been a successful model for us. And looking back at your origin story, one of the other things that stands out about

[00:12:38] you guys is that you're a bootstrap company that's focused on steady quality growth and built for the long term. That seems to be paying off now, but was that always the plan from the outset? Because it takes a certain amount of patience as well. Yeah. Gosh, was it the plan? I think it was really just, it started out of necessity, right? We didn't, we weren't really developing intellectual property other than just certifying server

[00:13:04] hardware for customers using open source operating systems. So, so there wasn't really an investable business there. We've just made our business kind of building brick by brick by just making a reputation in open source communities. And as open source, and we were doing it long before it was cool, but as, as it started to take hold and Linux now is the, when we started it, Linux was hardly used in the data center.

[00:13:31] Fast forward to today, it's the only thing really used in the data center and in terms of operating systems or what people are developing on, et cetera. So, so we really just kind of did that out of necessity. And, and there was an article actually written in Forbes a few years back was called us the last bootstrap company in Silicon Valley. I don't know that's actually true, but we, it is a feather in our cap now that we've been able to build a business successfully in a traditional way without seeking any outside

[00:14:01] funding and been able to build a business that we have today with, with TrueNaz just with, without having to, to worry about VCs breathing down our neck. We can just make sure that we're masters of our own destiny and doing things that are right by our customers and for the right reasons and making sure that we keep customers for life instead of just always chasing a return on the investment. And when I was researching you before I came here to see you today, I was reading that TrueNaz

[00:14:29] equals the world's largest storage user community. Just for people listening and indeed any potential clients or indeed existing customers, can you expand on exactly what that means? Sure. Yeah. I mean, as I mentioned before, it started as FreeNaz and that I think FreeNaz originated in 2005. I think its first release was then. So we're talking about a long history here and then has transitioned to TrueNaz since, but since inception, it's been tens of millions of downloads, millions of deployments.

[00:14:59] It's been deployed in every country on the planet. But it's today by measures that we have, we have an active community of active community members of hundreds of thousands at any given time. These are folks that are using the software, testing the software, developing the software. You mentioned that it's used in a majority of the Fortune 500. It's at least 60% of the Fortune 500 is using TrueNaz in some shape or form and that we know of.

[00:15:26] There's a lot of air gap systems or systems that we don't have visibility to or often you've heard of, you've probably heard the term shadow IT. A lot of times that's TrueNaz being used by the shadow IT. People bring TrueNaz to work. It's actually a lot of, it's one of the ways that we're able to expand our footprint really is people will download it if they're building a storage system at home, they have an old PC laying around or something and they want to turn it into a NAS system. They can download TrueNaz and put it on that.

[00:15:55] And what they're doing there is they're training themselves on the software and they get to experience the power of this enterprise storage software that they have access to for free. And they go, wow, my God, we can be using this at work. And then they take it in and they bring it into a lab and they use it in a lab. And then someone says, wow, what is that? And oh, it's TrueNaz. And the person explains it to them. And the next thing they're onboarded onto one of our enterprise appliances because they

[00:16:20] see that we have the HA appliances and appliances that have full enterprise support that are competing with whatever they're using for primary storage. So it's kind of a land and expand model, but helps us get a foot in the door for sure. And another phrase that stands out I see on the website is open enterprise storage. And for business leaders listening, maybe not as tech savvy, can you just expand on what that means as well? Yeah.

[00:16:47] I mean, I think in nearly any technology space now, this has been proven, sort of all roads lead to open source. What I mean is that open source eventually wins because it can be a commoditizing force in the market. It drives costs down. It lowers barriers to entry, all of those things. It's just an eventuality. I mean, like I mentioned before, if you look at the Linux operating system, it started as

[00:17:14] something that only geeks were using in their basements. And now it is the de facto operating system in data centers. And so it's really just an eventuality. I mean, just recently, the news right now is this DeepSeek LLM that came out another, just really at a fraction of the cost of Llama 3 or the fraction of the cost of OpenAI's models, just the success they were able to have. And of course, we're still waiting for more details on that.

[00:17:43] But this really shows the power of open source and how it really is a force in the market. And so where open source takes longer to take hold, I'm sorry, this is kind of a long-winded answer to your question, but where open source takes longer to take hold is when it comes to critical infrastructure, right? And that's because when it comes to critical infrastructure, especially things like data, people are more risk averse, right?

[00:18:11] That downtime can mean sometimes millions of dollars per minute, or data loss can mean millions or hundreds of millions or even billions of dollars for some companies, right? So obviously a little bit more reserved about potential people think of open sources as riskier, right? And so this is why people are willing to pay the costs they do for enterprise storage. It's like buying an insurance policy a lot of times, right?

[00:18:37] And so for us, open enterprise storage really is giving companies access to all the goodness, all the upsides, all the advantages and benefits that you get with open source, but removing all of the potential risk, not requiring the expertise, right? Having around the clock support, having a company that's backing it.

[00:19:01] So being able to have the same customer experience or better than you would get with a commercial offering from Pure or NetApp or Dell or whatever, but at a significantly lower cost, obviously there's the benefit of open source economics, the flexibility of using open source, and also being able to use

[00:19:22] just our community addition in applications or in use cases that maybe don't have the same criticality of data, right? So like I mentioned, labs, a lot of times VMware would run all of its labs for training folks to be VMware admins. They would use FreeNAS back in the day and then TrueNAS now. So that's a kind of a good example of being able to use the free and open source version.

[00:19:50] So really anywhere, we just, we believe that the traditional enterprise storage tax is too high. And that's kind of why we exist. It's, we're really hyper-focused on how to reduce storage costs for our customers without compromising reliability, performance, support, or ease of use. So yeah, delivering those open source benefits basically with the same enterprise storage customer experience that customers have learned to expect.

[00:20:18] And as you said, we've come a long way from the geeks in the basements now, and we're talking about significant enterprise savings. So just to bring to life what we're talking about here for that business leader listening, do you have any use cases that you're able to share around the kind of industries that you serve and the problems or savings that you offer those vehicles? Yeah, yeah. I have to be careful. This is where I get into a little trouble sometimes because I'm often not sure about what I'm able to say or not.

[00:20:44] Luckily, I did jot down a couple of names that I could with some interesting use cases that I know we've either already been public about or that the customers aren't, don't mind. But an interesting use case actually is, we talked about this actually during the IT press tour, but NASA uses us for both the James Webb and Nancy Grace telescopes, for example, to the footage that they're generating through those telescopes. They're archiving that onto TrueNAS in some cases.

[00:21:12] Another one is the JFK Library. So the JFK Library, they are obviously archiving a lot of precious historical footage of JFK and that era of his presidency and before, and that's all preserved on TrueNAS systems. Another one is we were involved. TrueNAS was used in both live streaming and post-production for Super Bowl and also for the French Open of tennis in the last couple of years.

[00:21:37] Another example is the division of Disney, Skywalker Sound, all the movie scoring as well as the AI processing of all their streaming content is stored on TrueNAS or transcoded on TrueNAS. I think we also talked about production for the Las Vegas Sphere. So 10K, that's actually the production and post-production of some of the 10K graphics and visual images that you see in some of the shows at the Las Vegas Sphere.

[00:22:05] So that's kind of a handful of examples that I jotted down that I think are interesting and that can kind of resonate with folks. But, you know, TrueNAS is used really across almost every vertical out there. But I think predominantly the areas where we're seeing the most success are in media and entertainment, government and defense.

[00:22:27] One of the reasons why defense contractors and military and defense, TrueNAS is because it's open, it allows them to audit the code from end to end. So everything is transparent to them. They can, every line of code that goes into the product, they can go ahead and audit and make sure that there's no backdoors in it, that there's no any kind of foreign actors that have infiltrated the code.

[00:22:55] So that makes it very popular in government as well. Healthcare is another industry that we do a lot in, obviously. We do a lot with CCTV storage, obviously, as well. So many use cases across lots of industry verticals. And if we look across the entire storage industry, there are so many different trends that I'm seeing at the moment from merger and acquisitions to increasing concerns about privacy and AI, and especially when they're running those AI models.

[00:23:25] Do they do it in cloud or they do it on or bring it back on-prem? And then we've got disgruntled customers feeling that they're being held to ransom at some providers who we will name nameless for this podcast. But what trends are you seeing in the storage market this year? And how are you evolving or responding to these trends as well? Yeah. I mean, the one that's really obvious, and this was confirmed at a Gartner conference I was at last month,

[00:23:53] during the keynote, the number one thing that was brought up in this kind of, this is an IT leaders conference. And the number one thing that they brought up was that how constrained IT budgets are and how much IT organizations are asked every year to do more with less. The budgets aren't growing, that data is growing, but the budgets aren't growing in lockstep. And some of that budget is unfortunately receiving other pressures, right?

[00:24:20] Like AI is suddenly something that was thrown on everyone's out of nowhere in 2023. All of a sudden, everyone had AI initiatives that just blew up their budgets. And then the latest thing that happened, you said you won't name it, but we're partners and this is a reality. So I feel comfortable, this is a partner of ours, but I feel comfortable because it's something that we can help customers with. And that's VMware licensing costs. That's another thing that's really putting pressure on budgets in 2024 and 2025 and beyond.

[00:24:48] And so those are, so really, I think budget is number one in terms of a trend that we're seeing. And this is where TrueNaz is uniquely positioned to help customers conserve here and find alternative strategies for storing data that helps them actually save in their IT budgets. One of the interesting data points that they talked about at the Gartner conference really was that,

[00:25:17] and this is maybe a nod to Broadcom's M&A prowess, but obviously the 3 to 5x licensing increase in VMware costs is a big pain point for a lot of organizations who are already invested in VMware and their infrastructure. And so the, but the stat they rolled out was 80% of VMware customers because of those price increases want to move,

[00:25:43] but 95% of them will renew at their next three-year term. And it's just the textbook definition of vendor lock-in. And it's really one of the reasons why TrueNaz exists is because we do everything possible to, to make it as easy to onboard yourself on a TrueNaz, or if the experience isn't good enough, there's nothing that locks you in. Everything's based on open technologies.

[00:26:09] The only thing we want to lock customers in with is an experience that they don't want to leave. But if they do, for whatever reason, we make that easy. And so when something's that embedded in your infrastructure as VMware, obviously that's causing a lot of pain, and they're realizing that a migration off to another hypervisor is not a value-added activity. It'll be incredibly expensive. They realize it's actually cheaper to pay the 3 to 5x licensing cost,

[00:26:36] and obviously Broadcom realizes that otherwise they wouldn't have done it. But this is leaving customers in the lurch, and they're looking for solutions to save elsewhere in their IT budgets to be able to afford these licensing costs. And so TrueNaz exists specifically to help customers in these situations. And so for any customers in these situations, we've had so many success stories helping customers really save on storage costs

[00:27:03] without having to make any compromises so they can afford that new VMware bill. So that's one thing. I think another thing that's happening also with AI in general is really there's a lot of talk about storage for AI. When AI came out, everybody had to now attach their storage marketing to AI in some way. And outside of training workloads, which are really only 5% to 10% of AI workloads in totality,

[00:27:33] most existing storage is just good enough. You don't need specific AI storage. So I think that's another trend that we're seeing is that customers are waking up to that. I think a lot of customers were worried about, what are we going to do about storing AI? Well, for the other 90, 80 to 90% of workloads, they're all inference-based or all RAG-based. Existing storage is just good enough. So you don't need to have any quote-unquote AI storage.

[00:28:00] So we see that as kind of a trend that customers are making that realization, which is also allowing them to maybe save on their storage budgets as well. And I appreciate you probably can't share too much here, especially going public with this. But are there any teasers you can share on what we can expect next from TruNest this year? Where do you go from here? Or what your big focus is for the rest of the year? Well, I mean, beyond just continuing to spread data freedom around the world, as we always do,

[00:28:30] we have a number of major things that are kind of happening this year. So we've got a major software release coming in a couple of months that's called Fangtooth. One of the natures of being an open source company is that we're really transparent about what we're doing. So our roadmap is pretty out there and we don't really hide it. So we'll have a beta next month. And then that'll probably be ready for enterprise customers in May or June timeframe, once it's had enough time to bake in the community. So that's interesting.

[00:28:59] We have part of that software release is it's going to be really improving our dedupe and data optimization. Again, further helping customers save on their storage by optimizing data and reducing deduplication. We have dedupe in the product today, but it's going to get so much better this next release. We also are announcing kind of iSCSI and NFS over RDMA, which is going to be expanding the number of use cases by which TrueNest can be used. The product actually has native Docker container support now, but we plan to expand that with the next release.

[00:29:29] I think I'd mentioned it's called Fangtooth. It's 25.04 is the actual name, but Fangtooth is the codename. And so that'll allow us to really double down and increase our open source and enterprise app catalog so that apps, we do provide the capability of running apps on the storage as well. And we have new products that'll be coming out too, new storage appliances. So we already have full NVMe and NVMe over fabric kind of across our Flash product line,

[00:29:58] but we plan to expand that quite a bit. We have 60 terabyte VME drives coming out here shortly. And then possibly by the end of the year, we expect to potentially be able to ship drives larger than 100 terabytes. So now for our F-series products, for example, we'll be able to get potentially 20 petabytes in 14U.

[00:30:26] So that's pretty incredible. That'll double the capacity on our product line for the F-series. And the other thing that we have going on is we have a partnership with a Web3 cloud partner. They go by Storj. It's S-T-U-R-J. Some people pronounce it storage, but we say storage so many times that it gets confusing. So Storj.

[00:30:51] So we have an integration with Storj that allows either to actually to backup or disaster recovery to their cloud. And that's incredibly cost effective. And we plan to launch an enterprise version here in the next couple, actually next month. So that's something that's interesting. And yeah, and much, much more.

[00:31:15] I encourage you guys to just track us by just our socials or take a look at our website and follow along. Yeah, I will add links to everything so people can find out more information. And I do urge everyone listening to check out the website and your socials. So much going on. There's so much we didn't talk about today. Such as the fact that I think on-prem and cloud are growing at the exact same space. Maybe we should get you back on later in the year after a lot of big announcements that are coming.

[00:31:44] And maybe we can talk some more. But, well, let me just thank you for your time today. Yeah, I'd love to. Thank you, Neil. I appreciate you having me on. And as I said, truenas.com is the number one place to go find any other information about what I was talking about today. Read our blog, see our roadmap, all of those things. And if we can ever help you, plenty of places to reach out to us there on the site as well. And download the software today and try it yourself. You can install it in a VM and be demoing it in minutes. So thanks again. Appreciate the time.

[00:32:14] TrueNAS has carved out a space for itself in a market often dominated by big-name vendors. And Brett's insights today highlight a growing trend. Businesses are looking for more cost-effective, flexible and transparent solutions for managing their data. So if you or your business is rethinking your storage strategy or feeling locked into a high-cost solution, TrueNAS might be something worth exploring.

[00:32:42] And as I said a few moments ago, if you want to learn more, head over to truenas.com to check out their solutions, community and indeed roadmap. And as always, let me know your thoughts. Are you seeing any similar trends in enterprise storage? Reach out to me, techblogwriteroutlook.com. Connect with me on social media, LinkedIn, X, Instagram, just at Neil C. Hughes. And we'll keep this conversation going. But the IT press tour must continue.

[00:33:11] I'm going to be visiting another company now on this whistle-stop tour. So tune in tomorrow. I'll have another guest waiting for you. And I cordially invite you to join me along for the ride too. Speak with you all tomorrow. Bye for now. Bye for now.