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5/28/2008
01:55 PM
George Crump
George Crump
Commentary
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Finding The Needle, Part One - Saving Money

In the last week another new storage startup is launching a new product, another just received another round of founding, and still another announced it was being purchased. This happens almost every day with technology startup companies, especially in storage.

In the last week another new storage startup is launching a new product, another just received another round of founding, and still another announced it was being purchased. This happens almost every day with technology startup companies, especially in storage.So how do you select the needle from the haystack? In the next few entries I'll give you some ideas on how to do this, but the first advice is, don't try. Solve your business and storage problems first. If that can be done by one of the "old standbys," then by all means do so. If it can't, then first know why it can't and then look at the startup community, but always remember they're called emerging technology companies for a reason -- there is risk involved. The primary reason IT professionals look at startups is not because the solutions that they need do not exist from more established providers, but more often it is that they can't afford those solutions. They look to the startup community to drive the price down. It makes sense: newer company, less infrastructure, more aggressive pricing. Of all the reasons to consider a storage startup, price is one that I advise against. I'm not against saving anyone money, but in my experience, most of the companies that lead with price as the reason to do business with them fail. If the company has nothing more compelling than price, it is simply too easy for the more established competitors on a case-by-case basis to match that price, and in most cases they don't have to match the price, they just need to get close. Our guidance here is if you're going to take a risk on one of these low-cost alternatives to an existing solution set, make sure that the core focus of the company is in the area where you are investing. For example, if you're looking for a NAS solution and the NAS provider that you're looking at is strong in Unix but "new" to the Windows space, be VERY careful. But if you are looking for a storage compression solution and all the provider does is storage compression, your chances of success go up substantially. Secondly, which will be true for all motivators, is test. Make sure your test is as close to identical to production as possible. Establish a right of return that not only lasts through the test period, but at least a month or two into production. Production is different than the lab and you want to have a way out if things get ugly. In my next entry we will discuss the second motivator for selecting emerging technology companies, selecting companies that are solving a problem that no one else is solving. New solutions require a different type of examination.

George Crump is founder of Storage Switzerland, an analyst firm focused on the virtualization and storage marketplaces. It provides strategic consulting and analysis to storage users, suppliers, and integrators. An industry veteran of more than 25 years, Crump has held engineering and sales positions at various IT industry manufacturers and integrators. Prior to Storage Switzerland, he was CTO at one of the nation's largest integrators.

 

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