What really drives storage innovation

Ongoing waves of consolidation remind me of what really drives storage innovation – companies willing to experiment. Startups can only succeed when their products can engage the marketplace.

Startups risk everything to develop technology an innovation or two that can change the world. But what they ultimately discover, what they truly need is some large and/or small company’s willingness to experiment with new and untried technology. Such market engagement is essential to understand their technology’s rough edges, customer requirements, and distribution options.

Recently, I was informed that some large companies prefer to work with startups because they can better control any emerging technology direction. Also, their problems are big enough that typically no one solution can solve them. Startups allow them to cobble together (multiple) solutions that ultimately can solve their problem.

From the small company’s perspective the question becomes how to attract and begin the dialogue with innovative customers willing to invest time and money in startups. But, the real problem is knowing enough about a customer’s environment to know if suitable prospects for their technology exist. Armed with this knowledge, targeted marketing approaches can be applied to ultimately get a hearing with the customer.

However, what’s missing is a forum for large and small companies to describe their environment and more importantly, their serious, chronic problems. Mostly, this has been done informally or on an ad hoc basis in the past, but some formality around this could really benefit storage innovation at least from startups.

I see many possibilities to solve this, ways that companies could provide information on their environment and identify problems needing solutions. Such possibilities include:

  • an electronic forum something like Innocentive.com where companies could post problems and solicit solutions
  • an award to solve a particularly pressing problem like Xprize.org where a group of companies, perhaps in one vertical combine together to offer a significant award to help solve a particular nasty storage/IT problem
  • an organization of sorts like SNIA end user council that could provide anonymous information on IT environments and problems needing solutions.
  • a Small Business Innovation Research-like (see SBIR.gov) that could provide a list of problems soliciting solutions

The problem with SNIA end user council and SBIR-like approaches is the lack of anonyminity, the problems with an Xprize-like award is the inability for any one organization to fund the award. All of which is why I prefer an innocentive.com-like approach, maybe better targeted to IT issues and less targeted on basic and materials science. Finally, perhaps another, unforeseen approach that might even work better – comments?

Why big storage vendors can’t be enticed to work on something like this is another conundrum and probably subject for a future post.

EMC Better At Acquisitions?

I was talking with an EMCer the other day about the Data Domain deal and he said that EMC does very well with acquisitions. Just about every EMC product line other than Symmetrix (and possibly Celerra, Invista, PowerPath and maybe others) came from an acquisition in EMC’s past.

The list goes something like this Clariion from Data General, Centerra from FilePool, Control Center from BMC, Networker from Legato, RainFinity, Avamar, Documentum, RSA all from companies of the same name. There are other examples as well but these should suffice for now. One almost starts to forget about all these separate companies that existed prior to EMC’s acquisitions. Over time EMC manages to succeed in advancing and integrating the various technologies and products into their portfolio.

On the other extreme is Sun. They have almost a perfect record of acquiring companies and burying the technology away. Often the technology does emerge after a gestation period in another Sun product somewhere else but just as often it just fades away never to be seen again.

Today’s companies have to do acquisitions well. They can no longer afford the luxury to acquire companies and then see their investment die away. Those days are long gone

What makes EMC so successful while others can do so poorly? One thing I have learned is that EMC leaves a new acquisition pretty much alone for 12 months or so. During that time presumably they are assessing the current management team for EMC cultural fit and determining the best way to sell, advance and integrate the acquired technology into the rest of EMC’s product and services portfolio.

The other thing I have noticed is that EMC’s most recentr acquisitions have retained at least portions of their original brand names. Networker, RainFinity, Documentum, and RSA are examples here.

I don’t know what it is about retaining a brand name but 1) it makes it harder to let it fade away because it’s so visible, 2) employees who have a personal interest in the brand fight to keep it alive and advancing, and 3) customer base and loyalty is retained better.

Just pieces of the puzzle but no doubt there is more to this than is visible externally.

How well NetApp will do as an Acquirer is another question. I know they have acquired Spinnaker, Alacritus, Decru, Topio, and Onaro over the past five years. Most of these products are still being sold. Rumors point to Spinnaker technology being merged into NetApp’s mainline product soon. All in all, I would have to say that although NetApp has retained the product names for most of these products Onaro’s SANScreen, Decru’s DataFort and others, they haven’t necessarily done a good job keeping the brandnames alive.

What NetApp will do with Data Domain however, is another matter entirely. First, the price being paid is much higher than any previous acquisitions. Second, the market share that Data Domain currently enjoys is much larger than any previous acquisition. Finally, it’s crucial to NetApp’s future revenue growth to do this one right. Given all that, I truly believe they will do a much better job with retaining Data Domain’s brand and product names, thereby keeping the product alive and well for the foreseeable future.

Rgds,
Ray