Synology Storage Strategy Inside the Business of NAS and Surveillance

Ugh, Synology, some of their choices breaking my heart. This all started because I was going to Computex and I reached out to Synology because I have a lot of questions, they're breaking my heart. I wanted to get to the bottom of some questionable choices that they made regarding their NASes. would probably describe it as being incensed. I was incensed that perfectly reasonable plus series NAS that had worked fine with the WD Red hard drives that I had been using or the Seagate Exos drives uh suddenly was complaining that it was not Synology brand drives. Now, I get it. You don't want to use necessarily like shucked shingled magnetic recording hard drives or like the B-grade hard drives that aren't you

know, it's obviously it's an Exos drive, but it doesn't have an Exos sticker on it. And then you throw that in your NAS and then it dies or throws errors or isn't reliable. Okay, I get it. But what about name brand drives? Like you can't make the argument that you need a Synology brand drive when somebody is actually using a high-quality drive like WD Red or Exos. Like I as an administrator trying to dot the i's and cross the t's properly cuz I have a lot of these systems. So, let's go to the source. Let's get some answers. The other thing that I knew ahead of time, but I wanted to ask more like I really want brass tacks of what is motivating some of Synology's decisions, like their business decisions

around what they're doing. And the most important one is that they're on track to be a billion-dollar company. Part of that is the growth of AI, part of that is the growth of their surveillance and storage divisions, but really if you look at what else is happening in the entire rest of the market for what had been true enterprise solutions, a lot of larger companies have acquired these storage providers. And the only storage providers that are left are at the extreme highest end, and they are wildly expensive options. Synology is an affordable, reasonable option. They've always been an affordable, reasonable option, mostly. On the higher end of affordable, but affordable nonetheless.

Uh if you look at a breakdown of where their revenue comes from, only 5% of it comes from like the home \{slash\} enthusiast user category. 2/3 of their income fully is enterprise or enterprise adjacent products. A third in the middle, maybe you could say prosumer, maybe. But that's a really interesting breakdown. I'm here with Synology. Why have you made the internet angry? Well, we care about your data. That's what we're looking for. Uh so what we're trying to build is a full hardware and software ecosystem. So we need to have the hardware dialed in so that the harnesses we build for the software can function as intended. And

that's also true for uh all the way down to the consumer level. We want that all to work well. Uh oftentimes whenever we work with those some of those consumer drives or shucked drives, for example, uh those are drives that have been in use for a long time. And if they fail in the Synology NAS, who's really at fault there? Is it the drive's fault or Synology's fault? Yeah, so you've never encountered enterprise customers with shucked drives? No, not quite. I'm talking about I'm talking about for the consumer users, correct. Yeah, so uh I'm talking about There are people on our forum that claim, "I'm an enterprise user and

I've shucked my drives." And it's like That's That's too much power on hours usually. And yeah, there's there's setting themselves up for failure. And so our opinion is we want to prevent that from happening so that your data, which is our whole job, your data is actually protected and reliable on the Synology device. So, um that being said though, as mentioned, we listen to our enterprise customers. We also listen to our consumers as well. And so we noticed the issues with the supply chain in terms of hard drives on the market. So we open that back up. Again, our main goal is to protect data, and if we can't do that due to a supply thing, then we'll make a change. And yeah, we

are having full native support for additional hypervisors in that platform. So, that would mean we have full native support for Proxmox, Nutanix, VMware, and Hyper-V as well. And so, you can facilitate protected transitions between those platforms. Now more than ever, we have a bunch of those organizations out there looking to change their mixture for IT, and having something like Active Protect 2 means they don't have to change their backup workflow or technology at all whenever they're making those changes. So, if the story here is that Synology is going to transition to an enterprise company, that's fine. That's completely reasonable. I actually think that creates a secondary market and opportunities for open source and other

NAS vendors at like the consumer end of things, but let's look at the enterprise aspect of things for just a second because it means Synology is going to have to do a lot more different than what they're doing now. What is enterprise storage? It's NetApp. It's Commvault. It's Dell, Dell EMC, Dell bought EMC. This is a very long road ahead for Synology, and they'd better have good answers to basic things like how are you planning to do CVEs? How are you planning to do 24/7 technical support? Well, I was surprised Synology actually had some good answers for that, including how they were managing CVEs. They showed me their CVE management dashboard, how they're doing DevOps integration, how they're managing

updates. This is a radical departure from how it has been handled historically, but this really is an enterprise mindset for how they're handling updates to their platform. Updates in less than 24 hours in some cases. We have a dedicated PSIRT team back at H-Synology HQ here in Taiwan actually, and they are on demand to address any, you know, critical vulnerabilities that come up, usually within 24 to 48 hours you're seeing some sort of post that it's either being worked on or it's mitigated, or it doesn't actually affect us. I believe some other Linux kernel items recently have been uh called out as having issues, and we had a response

on our CVE portal that said "unaffected" uh and that's simply because Synology has a little bit more on top than just doing the bog standard uh Linux kernel. Second big problem that Synology is going to face, DSM. DSM is not modern or sophisticated enough. I know there've been some big upgrades for DSM from 6 to 8, but again, if we go with this with the enterprise mindset, brass tacks, DSM as it exists today is not going to cut it. How I would describe it is we're trying to build uh secure AI that you can rely on that isn't just always sending your personal data to the cloud. Uh we're trying to build uh sort of an

environment and bring Synology DSM into a generation where it's equally as good for human users as it is for AI and agentic workloads as well. So, we're building uh harnesses so that you can have uh MCP servers use Synology APIs and things like that. Uh and that will help bring DSM into the next generation cuz it's uh really integrating with the tools these other organizations are exploring and adopting in their time. uh European customers are really excited about this just because of the data government. There's no question about where your stuff is. Exactly. I mean, it's it's on the news right now that uh they're moving to LibreOffice and a couple other things uh to fill those needs in Linux and all

that. Uh I believe Synology would be a good fit for a deployment uh such as that. So, we might be talking to them in the future. It is really wild to see NASes designed with GPUs and the GPUs give you local data governance. So, like it's kind of a weird future. Yeah, it is a weird future, but luckily it's not going to be uh a system that is trying to generate like AI slop as it's called. It's a system that's there to help you manage your data, extract value from it. Uh there's going to be an agent

inside of DSM that'll help you configure things, troubleshoot uh brute force attempts into the system and things like that and give you next steps for mitigating those issues. So, it's going to be a huge quality of life improvement for DSM admins. So, there you go. There's my impression of the road map that I see for Synology. I'm actually pretty excited that they're going to revamp their software platform and I'm really super excited for an appliance that you could buy and have data sovereignty. That seems fantastic. That seems really great. It's a little bittersweet because I do think that the some of the aspects of the lower end of the market which are maybe a little bit more headache for them and maybe a

little bit more let's call it the enthusiast community. I hadn't realized that Synology had transitioned to a billion-dollar company and now that I know that okay, yes, this actually makes sense. But the singular most impressive thing is how seriously they are taking the software lifecycle and software ecosystem for this. If they follow through and everything that I saw was not a smoke and mirrors demo and I have no reason to think that it was, they are positioning themselves better than most giant tech companies in terms of security monitoring and security integration and really making sure that the patches for things are complete and fully tested in an automated devops kind

of a way. Secretly, I was super worried about this being a private equity play, you know, cuz usually those companies will hollow out a company from the inside and try to maximize the margins and do that kind of thing. I don't think that I would see the company making these kinds of investments in their underlying infrastructure, especially the Linux kernel security integration and the automated testing and like building that super complicated platform. That is a major investment. That is a major undertaking and that I think bodes well for the future of Synology. I do think that they have a lot of distance to cover from here to there and that may be a little rocky and there may be some

other stuff that we have to call out and have some fun with from here to there and I it sort of sucks that at the low medium end that they're making the changes that they are because it's going to cost more and it's going to be more complicated and you're probably not going to be able to use your own drives. I think they should certify good drives like Exos drives and WD Red drives without them having to be Synology brand. And they might actually do that. They just don't want you to be able to use arbitrary crappy hard drives, which I don't actually disagree with. But, I do disagree with them locking out known good or good brand drives or limiting smart functionality or anything like that. The Synology folks that I talked

to are very proud of the company that they've built and they have gone through record growth. The areas they've experienced growth in are not just storage, but also surveillance. Consider their building and the industrial campus that they're a part of. The industrial park is large enough and important enough that it has a dedicated monitoring and security center. And Synology was kind enough to take us there and give us a tour of what they built. Since they're sort of dog fooding their own products on this campus, but there's somewhere between 700 and 1,000 cameras on this campus and they're taking care of the security for all of the other businesses in this business park. There are walking security patrols

as well as a security officers stationed in this disaster response area. This is actually in a sub-basement of one of the buildings that also includes you know, like a disaster shelter. So, folks can shelter in place in case of you know, earthquake or other severe external situation that may happen. They're using the virtual fence technology, you know, drawing lines is like, "Okay, people can walk through the park, but if we have somebody that wanders into the pond, we want to get an alert." They're also able to track the security officers. So, if somebody does wander into a pond, you have a little map of where the security officers are and you can notify which security officer is nearest the person

that has wandered into the pond to see, "Hey, what do they need?" I also asked them about deeper or more invasive things. Like, "What do you do for image retention? What do you do for you know, facial recognition? What do you do for any of this kind of thing?" And for at least this industrial park, they don't have facial recognition set up. And the security retention for the footage is relatively short unless there's an incident. Now, if there's an incident, they'll flag the footage and save it because, you know, you never know if we're going to need that months or weeks later, but people that wander through the park are not being, you know, scanned or profiled or anything like that. And this is actually a

concern to some of the business owners in the you know, in the industrial park here because they're international companies and they don't necessarily want there to be a record of like, "Oh, this is our employee. This is how they come and go. This is, you know, the companies here are sensitive to reasonable privacy precautions." And so, the storage here is all local, and the information that is captured here is all local. And there's a governance board and a governance policy that is established by this industrial park for tracking and doing these sorts of things. So, if you're just a random citizen and you wander into the park, it's not going to pull up your driver's license and figure out who you are based

on your facial identity or anything like that. So, that's nice to see. Now, I'm sure that if there were civil unrest or push came to shove, that those policies might change, but it's still nice to see that it's like, "Oh, yeah, we just blindly upload it, you know, a copy of this to the cloud, and then that's you know, that's that's how it works or that's how it is." And Synology did cover my trip to Computex, but they didn't have any editorial input or even any insight into where I was going to go with this video. And so, the bottom line here is that Synology walked back what they were originally planning to do. You will be able to use non-Synology drives in those products that are aimed at that

sort of lower third of their customer base, less than a third. Their enterprise products are still going to be locked down, but Synology doesn't plan to lock down the consumer drives in exactly the same way, according to what they were telling me. Now, personally, I think they should do the intelligent thing, which is, okay, Synology drives are green, but you have trusted good drives like Exos and WD Red and other drives that are good quality drives and it says, yes, these are not Synology drives, but they work really well and it'll have all the features. And then if you have white label drives or like the reject drives that are, you know, different brands, but obviously they

come from one of the factories, then you get maybe more stringent warnings. That would be the correct way to handle that. Also, with SSDs, you need SSDs that have higher write endurance. And so that might be a little more stringent, but that is the reasonable way to handle this. I did expect it to be much worse, but I'm genuinely impressed by what they're doing with the security aspect. And the rest of it, time will tell. I'm Wendell at Level One. This has been Synology at Computex 2026. I'm signing out. You can find me in the Level One forums.