06 Nov 2016 Oliver Shah, The Times

Sheffield’s on-off tech boss living the Silicon Valley dream

Abruptly dismissed, swiftly rehired, David Richards has to stop burning cash

David Richards took his neighbour’s Tesla for a spin around the roads of San Francisco’s East Bay last weekend. “It really hacked me off,” says the chief executive of WANdisco, an AIM-listed technology company that helps businesses move data from their old systems to cloud servers.

“I tried out the automated mode. The car was blasting through ‘stop’ signs, it was veering onto the other side of the road. I was shocked.”

Richards found himself grabbing the steering wheel by reflex and straightening the electric car’s course. After recent turmoil at WANdisco, which has shrunk from a £1bn valuation into a minnow worth £50m, perhaps he has got used to taking evasive action.

At the end of September, Richards suffered a defenestration that looked bizarre even by the standards of London’s junior stock market, known for its Wild West approach to corporate governance. On September 29, after a prolonged slide in its share price and concerns about funding, WANdisco announced Richards’ abrupt departure. A week later, he was reinstated — refenestrated, if you will — in a counter-coup that toppled the chairman who had sacked him.

Richards, a steel mill manager’s son from Sheffield who became a Silicon Valley millionaire, had few kind words for Paul Walker on the day of his comeback, calling him a “f***wit” and declaring himself “truly furious”.

Walker, who ran software group Sage for the best part of two decades before taking the WANdisco chair in 2014, returned fire, branding Richards a self-promoter who had “constantly under-delivered”.

A month on, sitting in his PR adviser’s office overlooking Piccadilly in London, Richards cuts a more sanguine figure. With rosy cheeks, big white teeth and a comfortable paunch, he looks like an amiable beaver, although he holds back from the platters of cheese and pickle sandwiches that have been set out between us.

“I support Sheffield Wednesday, he supports Sheffield United, but apart from that he’s all right,” Richards says of Walker. “If he walked in the room now it would be a bit tricky, but I’d still probably have a chat with him about anything but business.”

Richards recounts the story of his ousting: how he flew from New York to London and arrived at the five-star Halkin hotel in Belgravia, only to receive a “very surprising” 9am call from Walker, who was downstairs with another non-executive director; how they told Richards he had to resign, giving him the choice of “an announcement with quotes or an announcement without”; and how he asked Walker “what was the straw that broke the camel’s back, and he said ‘there isn’t one’ ”.

Richards says he recovered from the shock with a cup of tea. He assumed the putsch had the backing of WANdisco’s leading shareholders, but an hour after the news broke, “I got texts from a group of them that were confused”. Global Frontiers, a US hedge fund that took a stake in July, was irate. Schroders, the British asset manager, appeared to be supporting Walker, then swung back into Richards’ camp.

He was catapulted back into the chief executive’s chair on October 6. Richards says he got a round of applause when he returned to WANdisco’s San Francisco office, with hugs from “people who don’t normally hug” and jokes about Lazarus.

The rapture wasn’t universal, however: WANdisco’s shares fell by more than 20% on the news, suggesting that some investors would have preferred to see him gone.

Analysts have criticised Richards for being excessively sunny side up. Walker says his relentless optimism was “causing major problems with cash burn” and that Richards “has got to get real about the size of the market WANdisco can address and demonstrate that to the listed market”.

It was a strange twist in a career that has taken Richards, 45, to the heights of West Coast tech. He says his teenage children, both born in California, speak with American accents to their friends and English accents to their parents. Their upbringing has been unlike any seen by the previous three generations of the Richards family, who worked in steel in South Yorkshire.

Home is a private community with its own golf course, at the base of Mount Diablo on the edge of San Francisco. He keeps bees, which his wife Jane “likes because it keeps me occupied and it’s not very dangerous”, and has a vineyard with 500 vines. “I’ve got sangiovese and merlot grapes, so we’re going to try to blend a chianti.”

WANdisco’s boss got his first break when he joined a software company called Druid in the mid-1990s. He took stock options rather than a company car, a choice that paid off when Druid floated on the stock market and he received a windfall. Richards and his girlfriend (now wife) moved to New York “with two suitcases”, then to Atlanta, then to San Francisco, which was “just the place to be”.

He raised $25m (£20m) for a software start-up called Insevo, which was sold when the dotcom bubble burst “for a fraction of what it was possibly going to be worth”. He made more money from another software company, Librados. WANdisco was created in 2005, when Richards met Yeturu Aahlad, an Indian-born computer scientist obsessed with data replication.

The company set out to solve a problem. After earthquakes, hurricanes and floods, businesses spent months restoring data lost in systems that had not been backed up immediately before they crashed. Another problem was that computer programmers working on the same piece of code from different locations found it difficult to update their work in real time.

Richards took Aahlad’s spin on the problem, known as active-active replication, and turned it into commercial software. It allows companies to mirror their live processes on different servers. The breakthrough came in 2011, when Hewlett-Packard struck a $3.5m deal to use WANdisco. Then, in 2012, the company floated on AIM and raised £15m. “It seemed like a good idea at the time,” Richards laughs.

The same year, WANdisco opened a support centre in Belfast to complement head offices in Silicon Valley and Sheffield.

Also, it bought AltoStor, whose founders had expertise in an open-source programme called Hadoop. At the time, Richards believed Hadoop would become the universal means for transmitting data over the internet, which “turned out to be not quite true” after Amazon Web Services introduced the cloud.

Since then, WANdisco has tried to reshape Aahlad’s original idea and apply it to the cloud, which Richards reckons is causing a disruption on the scale of the early 1990s, when names such as Microsoft and Oracle emerged.

At the moment, the cheapest way for companies to move data into the cloud is to “pour it into a ruggedised hard drive, FedEx it to Amazon and let them pour it into their data centre”. But for data that is constantly changing — transactional customer information, for example — he says that “you have to use WANdisco’s technology to move that data in and out of the cloud”.

The company’s shares went from 200p in 2012 to 1,500p in 2013, taking its value above £1bn. They closed last week at 128p amid doubts over the business model, despite a deal to move IBM clients’ data into the cloud this year. It has had to tap shareholders for three rights issues and remains loss-making, although Richards says this is because it is “consuming cash to take advantage of a significant opportunity”.

British tech’s one-time king in exile is phlegmatic. A month on from his temporary career crash, he grins and says that he “can’t really see beyond the end of this year, let alone anything else”.

“In my sixties or something, I’ll have to put my money where my mouth is and try to fix some of the problems with tech in this country,” he says. For the forseeable future, it seems, WANdisco’s investors can expect to see Richards at the steering wheel.