It has been interesting the past several years to watch the storage startups. When I left HP, we were predicting that a majority of the flash startups would simply go away due to market saturation. We expected a few acquisitions, a few consolidations, and most of them to go bankrupt. What we have seen is quite the oposite. Certainly there is still significant noise in the marketplace around who does what better, and of course the larger vendors are continuing to try to defend their turf, but there is palpable fear, and in many cases blood in the water.
Smaller companies, by design, need to get their message out. They are hungry and if they are to be successful there is no concept of “it’s not my job”. Every sale matters and every customer has to be a reference customer. Too many bad PR events and the company is unlikely to recover. They tend to focus on a smaller, often single product set making them very good at one thing. Larger companies have to make decisions to support scale and make sure they can meet growth plans. They often have investors to answer to, as well as large workforces with expectations.
In the storage market this becomes particularly true if you look at how the larger storage and tech companies treat their customers. This is certainly not an indictment of larger companies, just an observation. When is the last time one of the larger storage companies took a change request from a smaller customer? How many customers can get the CEO, or the Engineering Manager on the phone? A majority of this is a function of scale, but it is a big difference, especially in smaller companies where it is tougher for the large vendors to compete on this front.
Where do most of the innovations come from? Think about the last time innovation came from a large company. EMC acquired Xtreme IO to give them a leg up in the storage market. They could have built a product, but it was likely faster and cheaper to buy. HP aquired 3Par to replace their aging EVA line which was well overdue for retirement. The same story over and over, large storage companies acquire innovative startups to bring in new blood and new technology.
When Nimble emerged from stealth mode with a product it was incredibly different from what the big storage companies were doing. Now if you look at who built the company, it is pretty obvious it was just act 2 of Datadomain, but it was innovative. Pure, the same thing, their performance and utilization numbers were mind-blowing. Solidfire took QOS to a level that we never imagined, and did it on a scale out array versus a scale up array.
It isn’t that larger storage vendors haven’t innovated, but the speed at which they innovate, and their ability to be cutting edge is hampered by their size. The amount of interoperability testing is astronomical, whereas smaller storage vendors can just say, “we don’t support that”, or can simply focus on what they do and keep innovating in a single area, making it difficult for the larger vendors to make a move.
A different workforce
In a majority of larger storage vendors there is still the feeling of “this is how we do it”. Customer satisfaction is often resolved as a function of discount, or additional hardware. Sales people feel entitled, and in many cases customers feel that if a large vendor is calling on them they are either important, or want the free lunch. The mentality is different though, the sales teams are typically tenured, and have deep product knowledge, but only in a specific area. Many of them have come up through the ranks, or have made the rounds stopping at each large storage vendor for several years. The employees are often very good and very intelligent, but not very passionate, they are tied to the company, not so much the tech.
Storage startups on the other hand, by design are much more focused on cool new tech. Most of us in the industry have either been recruited by or worked for at least a couple of the flash startups. They go after people who are active, passionate, and able to bring a personal brand to their product. Look at who the storage startups have hired recently, their main common thread is a passion for technology and an ability to communicate that passion.
As always this is just my thoughts on the storage industry. I chose to leave HP storage because I think hardware vendors are in a tough position, and working for a big storage company is not a safe bet in my book. Certainly there is money to be made, but market shares are being eroded as customers become less loyal to one vendor over another. Time will tell, but the more commoditized storage becomes, the tougher it becomes for big storage vendors, and the easier it is for the startups to erode the business. It is anyone’s game, but my money is on further erosion, and more large hardware vendors going the way of IBM and moving toward services, or EMC, and looking for a federated approach.