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Delphix Founder Jedidiah Yueh On What CEOs Should Know About Data Security

Chief Executive spoke to Delphix founder Jed Yueh about the data security issues CEOs should be focusing on, the keys to operating successful organizations in the digital age.


Delphix founder and executive chairman Jedidiah Yueh speaks the language of data fluently. He founded data management tech company Avamar in 1999 and served as founding CEO before the company was sold to EMC for $165M in 2006. While Avamar focused on data de-duplication, backup and recovery, Delphix focuses on data visualization, and boasts more than $200M in its first 7 years of sales.

Yueh is also experienced in developing relationships with outside investors, having secured more than $150M in venture capital investments to help grow his businesses.

Chief Executive spoke to Yueh about the data security issues CEOs should be focusing on, the keys to operating successful organizations in the digital age, and how his leadership style is evolving. Here’s what he had to say:

Data security topics that CEOs should have on their radar

I think companies that are starting now are still waking up to realize that every company is a data company. If you look at the path to business, companies used to be products and services companies. Then, with the rise of the internet, they started realizing that every company has to be a software company, every company is a software company. And software began to proliferate and drive the operations and many of the core revenue functions for many businesses. But I think today, companies are starting to wake up. They are slowly waking up to realize that every company is a data company. If you look at some of the biggest companies in the world today, if you look at the Facebooks and the Googles, they are truly data companies. They use data to drive all their revenues.

And so, in some ways, I think the data security question is really with the data security. The focus on data security and regulation is masking the real challenge for companies today. They are so focused on data defensively that they are missing the incredible importance to use data as an offensive weapon in increasing market share, in driving market share as kind of core tool or asset for driving market share. And so, I think data security, the focus on data security, ironically, is creating a lot of risk for organizations.

Keeping on top of privacy and data compliance challenges

There are so many things that you need to be mindful of with data security and data regulations. And there is an incredible market of data security products today. And yet companies continue to have these big, very public breaches. And so, we know that something is broken in the equation. And one of the big challenges that companies have is they don’t have a way to really see and manage all of the most critical data that they have within the four virtual walls of their organizations. And so, really profiling and locking down data is very critical.

And there are a lot of different ways you can do that. You can mask away sensitive data in the right kind of environment. You can really manage and limit the access to data to the right individuals. So I think the big thing that I would say is missing in the market because companies that are already highly sensitized in data security is they are not recognizing the risk of not using their data to help drive their business. I think that’s one of the biggest risks.

Keys to being data-savvy in the digital age

That’s a great topic because I think there’s a really big paradox in the world today. You have all of these legacy enterprises who are focused on embracing digital transformation, and yet, most of them are really failing at it. And so there’s a really big question, “Why?” At Delphix, we enable fast data flow across all programs that matter for our customers. And we have over a third of the Fortune 100 as customers, we have many of the world’s largest organizations as our customers. And so, we work on their digital transformation programs, and we see how they use data and the types of programs that they are running to drive digital transformation.

But the problem is that most companies are really failing at it. Even though they’ve embraced it, they are simultaneously failing at it. And I like to talk about the usual suspects. So, when you talk to CIOs, CTOs, CEOs of enterprises of all kinds of different sizes and you ask them, “What are your top visual transformation programs?” you often get these usual suspects. They’ll talk about programs moving to the cloud as a really big program, or they might have experiments in artificial intelligence and machine learning and deep learning, or they might have a program around user experience design, or they might be looking at the ones that are farther behind, shifting to more of an agile methodology in using CI and CD to drive faster software release.

Those are the kinds of answers you get. But those are just tools that real, disruptive companies use to create their programs. They are confusing the “how” and the “what.” The “what” is a product or a service that will transform the future of an industry. It’s the product that is fueled by the power of the internet and its ability to reach billions of users with little to no friction or gravity.

“even when it comes to scaling up in an organization and managing or enabling rapid growth, it all comes back to product.”

How his personal leadership style has evolved

I’ve learned quite a lot of lessons throughout the years. Some of them are really good for entrepreneurs and some are for people who are really product-focused. I think the biggest thing that I’ve come to realize about leadership both at startups and at large enterprises is that CEOs really need to be mindful and have mastered what I call the “product trinity.” So, there’s a lot of talk about product CEOs today and how important it is to get a product CEO for a technology company. But I think that’s true for all companies.

The CEO role needs to match at three critical roles within an organization—it’s become the de facto CTO, product manager and head of user experience design. And the reason why I think it’s so important to master those three roles is because they are really the core of driving the product decisions that you need to make to win the future of almost every industry. And if you look at the leaders who run the largest organizations in the world today, all of which are tech companies, if you look at somebody like Jeff Bezos or Elon Musk or Mark Zuckerberg, these are people who deeply understand technology. They make real decisions on product requirements. They will weigh in with strong opinions about user experience design. So, they’re really focused on what is most important today, which are the products and services that take full advantage of their software and the internet and what you can do with data.

But I think because the rate of change and the rate of potential disruption is increasing, these product trinity CEOs have a disproportionate advantage not only in arriving at the top, but staying at the top, which is why you can see how quickly Jeff Bezos can move into each new domain and why companies are constantly at threat across so many industries at becoming the next example of roadkill for Amazon.

I didn’t start out as an engineer or a technologist, and I had no background in business when I started my first software company. So, one of the things that I learned is you can learn all of these things. It’s something that everybody, every CEO should be trying to master. It’s not something they should be trying to delegate to somebody else.

Keeping on top of rapid growth

I think even when it comes to scaling up in an organization and managing or enabling rapid growth, it all comes back to product. And what I mean by that is, you have to understand the entirety of your product. Most companies will think, when they think of a product, they are thinking of an application or a piece of software or some physical product. But today, you can really join your vision of the product with your go-to-market strategy and your business model. It’s really a union. But the entirety of the product is the union of the product, the business model, and the go-to-market strategy.

And I’ll give you a pretty simple example of that. A lot of people think of as a really innovative technology company. But if you think about, CRM and Salesforce Automation had already been invented. The application and the technology had been invented a long time ago, and had already been popularized in the market. And if you think about their business model, there were already companies who were selling what used to be called ASPs, application service providers. So, there were already people who were selling these services over the internet.

But really, the key for Marc Benioff was he took an application that already existed, combined it with the right business model, software as a service, and then he focused on a go-to market strategy, which was a bottom-up go-to-market strategy, where they use inside sales to target the market of smaller enterprises. They were going after the mid-market. They were going after small companies and the mid-market. And so, that combination is what really enabled them to rapidly address a problem and then opening the market and a timing of the market can scale up into a larger organization.

So, it’s understanding how products interact with business models and go-to-market strategy. And how much you can bear in those business models and go-to-market strategies in your product, or how much you can unify those. That is a big differentiator for many of these companies that scale so fast in the world today. If you think about, you have SFA, Salesforce Automation, as the initial product. And then the way that they were able to integrate their go-to-market software as a service, they had to make it multitenant. So, they had to architect it to handle multiple customers at once.

And then, if you wanted to enable more of a bottom-up go-to-market and inside sales-driven go-to-market, you had to make the product very easy to install so you could even enable fast, free premium trials. Fast, free trials. And so those are all things you have to build into your products right at the start. And the more you can build strategy, long-term growth strategy of your company into the definition of the products, the more you will be able to scale using the benefits of the internet.

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