Entrepreneurism is a fast-growing occupation. Many young people are using their minds and foregoing the traditional joining of a company after graduation to focus on creating their own space within their chosen industry. It’s an exhilarating change in the work-force but not everyone is successful. Every day startups open and close and some of those companies live for less than a week. It’s a tough market out there and people are constantly trying to find ways to make themselves useful and relevant.
If this sounds like you you’ve probably been given a lot of advice about starting your own business. Sometimes people will say: “What you see is what you get” when it comes to the market. But remember; “All that glitters is not gold.” This is so true when it comes to data storage startups:
Quick pop quiz question: When was the last time a data storage company successfully went public, and is still an independent public company today?
Answer: November 1995. The company was NetApp.
The fact that it was more than two decades ago, an eternity in IT time, tells you a lot about the hazards of the storage market for new entrants and the challenges that startups face to survive and thrive in our very competitive industry. If you’ve scoped out the market landscape recently, you’ve no doubt come across a bunch of new names in addition to the long-established leaders like HPE. You’ll have seen what looks like a vibrant, healthy ecosystem of smaller players alongside familiar industry pillars.
That apparently reassuring surface hides a grim new reality for storage startups. The ground has shifted suddenly and quite dangerously beneath their feet. Their lives have changed irrevocably, though they may not have realized it yet. Storage decision-makers should be aware of the new challenges facing the startup ecosystem and be prepared for a major shakeout.
Where did all the sugar daddies go?
The first shock wave for the startup ecosystem is the rise of technologies that exploit tighter integration with other core elements of the datacenter, specifically compute and networking. As I noted in a recent Computerworld article, Twilight of the Pure-play Storage Gods, the glory days of the pure-play providers are drawing to a close. The world is moving toward full-stack vendors. If the need to engage with that reality was enough to push EMC into the arms of Dell, it will certainly tax the resources of new entrants to the standalone storage space.
The second tremor is a wave of consolidation and M&A saturation among potential buyers of startup technologies, the top-tier storage vendors. Very few startups can count on being as fortunate as EMC in finding a buyer for the simple reason that there are very few buyers left in the market.
If you’re looking to start a business and then sell it to make a profit, this might not be the path for you. As you’ve read, it’s not that starting up a data storage business is difficult: it’s selling it that can be tricky. The market is full of these companies and if you’re looking to make some money this might not be the venture for you.
That’s alright. Just because this plan may not work out the way you want it to, doesn’t mean your other plans will follow the same path. Do your research, plan and prepare, and get out there, kid.