There can be only one…or at least less than there are now.

Since the recent announcement  of Dell acquiring EMC, there has been great speculation on the future of the storage industry.  In previous articles I have observed that small storage startups are eating the world of big storage.  I suspect that this trend had something to do with the position EMC found themselves in recently.

Watching Nimble, Pure, and a few others IPO recently, one cannot help but notice there are still far more storage vendors standing, with new ones coming out regularly, and the storage market has not consolidated as we thought it would.  During recent conversations with some of the sales teams for  a couple storage startups, we discussed what their act two was to be.  I was surprised to learn that for a number of them, it is simply more of the same, perhaps less a less expensive solution to sell down market, perhaps some new features, but nothing really new.

Looking at the landscape, there has to be a “quickening” eventually.  With EMC being acquired, HP not doing a stellar job of marketing the 3Par product they acquired, Netapp floundering, and Cisco killing their Whiptail acquisition, we are in a sea of storage vendors with no end in sight.  HP splitting into two companies bodes well for their storage division, but the biggest challenge for most of these vendors is they are focused on hardware.

For most of the storage vendors, it is likely that lack of customers will eventually drive them out of business when the finally run out of funding.  For some, they will survive, get acquired, or merge to create a larger storage company, and probably go away eventually anyway.  For a few they will continue to operate in their niche, but for the ones who intend to have long term viability, it is likely they are going to need to find a better act two, something akin to hyper converged infrastructure, or more likely simply move to a software approach.  While neither are a guarantee, they do have higher margins, and are more inline with where the industry is moving.

We are clearly at a point where hardware is becoming commoditized.  If your storage array can’t provide performance, and most of the features we now assume to be standard, then you shouldn’t even bother coming to the table.  The differentiation has to be something else, something outside the norm.  Provide some additional value with the data, turn it into software, integrate it with other software, make it standards based.  Being the best technology, the cheapest price, or simply the biggest company doesn’t matter any more.  Storage startups, watch out, your 800lb gorilla of a nemesis being acquired might make you even bigger targets.  You better come up with something now or your days are numbered.

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There can be only one…or at least less than there are now.

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