Original URL: https://www.theregister.com/2011/02/23/next_storage_tigers/

Where are the next storage startup stars?

Is there room for another 3PAR, Compellent or Data Domain ...

By Chris Mellor

Posted in Channel, 23rd February 2011 09:30 GMT

Comment Have we witnessed the end of an era? Has the great storage company growth boom ended with a series of big bang acquisitions: 3PAR, Archivas, Compellent, Data Domain, Diligent, EqualLogic, Isilon, LeftHand Networks, Ocarina, Storwize and more? Over the last five years a whole swathe of up-and-coming storage companies has been gobbled up by the majors eager to buy into technology and markets where they have limited or no presence.

The net result is that, in storage terms, EMC, Dell, HDS, HP, IBM, Netapp (less so) and Oracle – the big seven – are bigger than ever, with virtually a whole layer of substantial startups and early-stage public companies becoming operating units of the super seven.

The ones left behind, the too-large-to-buy (Symantec?), the refuseniks, the hard-to-swallow technologies, the mature niche occupants (CA) and the rejects, now have to grow organically and will have a harder job doing so because their previously independent competitors now have big bucks behind them for more development and greater sales and marketing resources.

If BlueArc, DataCore, FalconStor, Pillar, Sepaton or Xiotech ever thought that acquisition was an attractive option, it must now seem as if that door is closed and they have to grow the hard way, the organic way, the DIY way of building great product, keeping up with the market, and selling, selling, selling, which they can do as they have great products and energetic and enthusiastic execs running them.

There are a lot of early and mid-stage start-ups that could grow into substantial mid-tier publicly owned storage companies in the next five years though. Who are they and where are they in market niche terms?

The runners and riders for the next five years:

What about FCoE? It's early, very early, and until there are complete standards plus compelling cost and simplified management attributes to running Fibre Channel over Ethernet, I can't see it happening in any big way. If you want to run storage access over Ethernet you can already do it via iSCSI and that, you could argue, will benefit from Converged Enhanced Ethernet just as much as FCoE.

The net result of this could be to let Fibre Channel remain in its hygienic, protected, separate communications fabric as long as it wants, and bring iSCSI into the enterprise data centre: it is already knocking at the door. This matter is a tough issue for Brocade, Emulex and QLogic to deal with.

How about object storage and suppliers such as Caringo? My sense is that that market is just not as hot as it once was. Maybe cloud storage will give it a boost. Equally cloud storage could diminish object storage product sales to end-user customers. It is unclear what will happen.

All the companies I have listed have good technology and hard-driving management. Some are in faster-growing and less heavily contested market niches than others, and have more of a technology advantage over incumbent suppliers. These are the lucky ones. Short-term bets for start-up storage stardom? Here are six: DataDirect Networks, Fusion-io, Nirvanix, Riverbed, Virtual Instruments and Xiotech.®

Bootnote

This is a personal and speculative opinion. Don't bet your farm or anything else on it. I have shares in CommVault and Overland, so my opinions there could be on the far side of being rosy ...