Posts Tagged ‘storage’

Back to back acquisitions are adding to the excitement in the Flash arena. As Pure Storage pulled in another $150M in Series E funding and EMC was putting the finishing touches to its VNX2 with an all-Flash option complete with controller and software enhancements, even bigger Flash news was brewing.

Western Digital/HGST announced acquisition of PCIe Flash and software company, Virident, for $685 million on September 9. This is the third Flash acquisition the company has made in recent months. After acquiring SSD veteran, sTec, for $340 million, WD/HGST apparently beat Seagate to the punch in acquiring cache company, VeloBit, for an undisclosed sum. Seagate, along with Cisco, was also an investor in Virident.

On September 10, Cisco announced that it will purchase Flash array vendor, WhipTail, for $415 million. Undoubtedly there are folks out there humming along to the tune of the “Hokey Pokey” and wondering how serious Cisco is about storage as it expands its Unified Computing System.

It’s appears that the ability to aggregate, manage and manipulate Flash through software is a good place to be as the market moves towards consolidation.

Fusion-io and Violin will certainly be under increased scrutiny as the industry-wide game of musical chairs progresses. Will Seagate ever manage to snag a Flash chair? What shall we see at Oracle Open World in a few weeks?

About the Author

Agnes Lamont is an accomplished marketer of IT products and a partner at Marketingsage, a PR and lead generation firm that specializes in marketing data storage, data management, security, cloud and enterprise software products. She can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join her network on LinkedIn and to subscribe to this blog (see sidebar).

The August 2013 Flash Memory Summit in Santa Clara had a record attendance estimated at just under 5,000 people. There was a wide diversity of sessions ranging from an introduction to 3D NAND technology, to Flash DIMM components, to SSD enterprise systems, to product differentiation (my Differentiate or Die panel discussion with editors, analysts and VCs). Frankly, there was nothing new on the marketing side from the vendors selling enterprise SSDs. If you took the logos off the slides, one deck could tell the story for them all. They all have fast products, they all have similar use cases (OLTP, VDI, etc) and they all have customer success stories to tell. It appears that most have some market traction as well. Several announced new VC funding allowing them to scale up their businesses.

The fact that we now have 75+ vendors targeting enterprise buyers with products that are remarkably similar made the VC forum session the stand-out session for this marketer. It was a small crowd, probably because most of the vendors have funding and because business capitalization is not a topic that concerns most engineers and marketers. Nevertheless, it was a very valuable session that had many insights that should interest any C-level executive. Some of the same points were raised by Guarav Tehari of SAP Ventures in the earlier Differentiate or Die session. Here are the key take-away points with some added insights for CMOs.

VC Forum

Panel: Bob Witkow of Westwood Marketing, Alex Benik of Battery Ventures, Jacques Benkoski of USVP, Kambiz Hooshmand of Archimedes Labs, Ketan Patel of New Ventures Partners and Roy Hercules of Technology Growth Capital.

Flash market insights

  • The is so much competition that it will only take a year or so for the vendors to achieve product parity. Then it’s a race to the bottom with price. VCs are not seeing pitches that would compel them to fund new entrants.
  • VCs are interested in seeing products that do something interesting as a result of having Flash, but they are not seeing much so far.
  • Large enterprise has already accepted Flash. There are opportunities to sell to the mid-size enterprise.

General VC insights for entrepreneurs seeking funding

  • VCs judge proposals based on the team’s track record, the product and the problem it solves, and the business model.
  • A-Rounds fund product development and beta testing. Currently these rounds are hard to get and the product should be beyond proof-of-concept if it is to be attractive to VCs.
  • B-Rounds fund sales development, but the product should already be with some (beta) customers who will vouch for its value.
  • C-Rounds fund scaling a business that has proven its value and ability to win customers.
  • Entrepreneurs should seek enough funding to get to the next stage (funding round) and anticipate that it always takes longer, and can be more difficult, than initially thought. That means a big A-Round is important.
  • Expect to give up 30% of the company for a sizable A-Round.
  • Each large investor expects 20 to 25% of the stock so it’s important to plan capitalization through to the end. Of course, it often gets contentious.
  • VCs don’t put much value on the analyst charts that show rapid growth and large future markets. They want to see the predictions, but don’t build your funding case solely on them.
  • VCs want to see go-to-market realism and they know how hard/expensive it is to sell to a large number of small and medium businesses (SMB).
  • When presenting, start with the management team. What products have they worked on? What are the successes and failures (with lessons learned)?
  • When presenting, define your customers, the problem, how you solve the problem, and how your named competitors do not solve it.
  • When presenting, define the 3 key variables that drive your business. This is more insightful to a VC than the revenue model.
  • When presenting, specify what you will accomplish before the cash runs out for each round.
  • Intellectual Property (IP) is not seen as critical until the scale-up stage. That does not mean it’s not ultimately vital.
  • If ultimate profitability depends on high volume economies of scale, VCs are not very interested. They recommend seeking strategic investments from the large manufacturers (OEMs).
  • Ask for references from your prospective VCs (when serious negotiations start). Make sure there is a good fit amongst the people involved.

Marketingsage insights for marketers at VC funded startups in new markets

  • You are dealing with a new technology that is still evolving: new products with little or no track record; a yet-to-be-solidified market that doesn’t quite know what it wants; a new firm with VC owners whose goal is to exit profitably within 5 years; a new team that may include executives that have no hands-on marketing experience; market hype that inflates everyone’s expectations beyond reality; and a flood of big spending, noise-making, competitors. That’s as tough as it gets for a professional CMO.
  • Pessimists don’t get funding. Pessimists don’t get hired. You are on the hook for achieving some lofty goals and you may be expected to have a “magic bullet” strategy that delivers a high volume leads/sales, quickly, at a low cost.
  • Your ability to generate critical sales leads largely depends on your discretionary budget (money you can direct at lead-generating programs such as advertising and events). However, by the time you pay for employees, analyst contracts, software, pet projects, and multiple agencies, you may not have enough funds or time to get the required volume of leads. Typical A-Round and B-Round funds usually mean you have to achieve a lot with constrained resources. Of course, leveraging an integrated multifunction agency, like Marketingsage, can help solve this problem.
  • Market hype (see Gartner Hype Cycle) around new technologies results in a low conversion rate for sales leads because lots of people want to learn (triggering an inquiry/lead), but few have actual projects underway. However, the sales team articulates this phenomenon as “marketing only produces poor quality sales leads.” Of course, this can be managed with lead filtering, pre-qualification and nurturing, but it’s not unusual for sales-marketing politics to get in the way of the necessary cooperation and mutual understanding.
  • Purchase decisions can take a lot longer than anticipated, especially if the technology is new, product installations are complex, and/or the prices are relatively high. It’s not unusual to see sales cycles lasting 6 months or more. That means December sales depend on leads generated in June (or earlier).
  • Most firms go through 2, 3, or sometimes even 4, VPs of marketing between start-up and exit. Marketing executives are often last in and first out. The initial VP is highly unlikely to be there for the exit/harvest.
  • Most VPs stay about 2 to 3 years, but employee stock options often vest over 4 years.

About the Author

David X. Lamont is an accomplished marketer of IT products and a partner at Marketingsage, a PR and lead generation firm that specializes in marketing data storage, data management, and enterprise software products. He can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join his network on LinkedIn and to subscribe to this blog (see sidebar).

You never know what lurks in those piles of paper in the office. Today, I excavated an old Gartner report entitled “Cool Vendors in Data Protection, 2006.” To refresh your memory, this was the heyday of disk-based backup and nothing was cooler than Continuous Data Protection (CDP). Overcome with nostalgia for heated debates about “true CDP” and recovery granularity held in bars at SNIA conferences during that era, I just had to read this old gem.

Seven years after the coronation of the six cool vendors, only one remains. The other five must have made big bucks, right? After all, Gartner knows best and cool surely pays…..

  • Asempra Technologies sold its assets to Bakbone (acquired by Quest, in turn acquired by Dell) for a reported $2M in 2009.
  • Mendocino Software faded away quietly in 2008.
  • Mimosa Systems was acquired by Iron Mountain in a deal valued at $211M in 2010. Since then, it has been passed through to Autonomy and thence to HP.
  • Revivio’s IP was picked up by Symantec in 2006.
  • XOsoft was purchased by CA in 2006 and rumor at the time suggested that the return was good.
  • Asigra remains as the lone standing vendor of the group, having adapted its offering and message to grasp the opportunities presented by Cloud. Closing the circle, CRN thinks Asigra is still cool, naming them one of the 20 Coolest Cloud Storage Vendors for 2013.

Check back in another 7 years!

 About the Author

Agnes Lamont is an accomplished marketer of IT products and a partner at Marketingsage, a PR and lead generation firm that specializes in marketing data storage, data management, security, and enterprise software products. She can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join her network on LinkedIn and to subscribe to this blog (see sidebar).

Like kids squabbling over a bag of candy, disagreement over resource and budget control seems inevitable between sales and marketing. Sure, there are instances where politics, greed, and ambition fuel the tension between these groups, but I think that’s the exception rather than the rule. In my experience, both groups typically share the same goals and aspirations and genuinely want to work together amicably, albeit on their terms.

After many years working with sales and marketing across sectors including storage, data management, and security, I’ve come to the conclusion that, fundamentally, sales and marketing executives are wired differently. In a pre-technology era, I reckon they would have been hunters and farmers respectively. Sales executives tend to be high-energy optimists with a temporal focus on the short-term: this year; this quarter; even this deal. Like hunters, they can hyper-focus on their target, track it, and set up the perfectly-timed kill-shot. They can net a lot of protein and feed the corporate family as long as they have a ready supply of potential prey.

Marketing executives, like farmers, play a long game with planned diversity. They are the analytical planners, the visionaries who work diligently day after day to grow their crops. Good farmers know their soil and seasons, read the weather, prepare the ground, plant the seeds when conditions are right and nurture them daily. They stagger the plantings, thin the seedlings and cultivate them until they are ripe for harvest. They rotate the crops and make the soil richer year after year.

The hunters and the farmers are equally valuable and effective in feeding their community, but their methods and philosophies are fundamentally different. The same is true of sales and marketing in our modern, technologically-enabled corporate world. It’s understandable that sales typically favor events, turnkey sales appointment setting services, and blitz campaigns to drive leads. Marketers are more likely to analyze costs and likely outcomes and favor continuous, evolutionary campaigns that generate leads from multiple sources, based on multiple value propositions, and nurture them throughout a cycle that allows for education, evaluation and the vagaries of budgetary discretion until the qualified leads are ready to be harvested. Communications are consistent and sustainable.

Next time you’re caught in the crossfire between sales and marketing vying for budget dollars and competing demand generation plans, I hope this little analogy will help you value both approaches and clarify the results you need and how to prioritize and support the activities that are most beneficial for your organization. Like the kids with the candy, the outcome ought not be decided based on who screams loudest!

About the Author

Agnes Lamont is an accomplished marketer of IT products and a partner at Marketingsage, a PR and lead generation firm that specializes in marketing data storage, data management, security, and enterprise software products. She can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join her network on LinkedIn and to subscribe to this blog (see sidebar).

We’ve all been duly awed by the Dell buyout announcement. Over the years, the company has amassed quite a portfolio of storage and data protection and management offerings, having acquired companies such as EqualLogic, Compellent, Quest, AppAssure and SonicWall. Although many of these acquisitions brought robust technology and contributed handily to Dell’s revenue, the company never made the transition to becoming a storage company. This begs the question as to what will now happen to these lines as Dell sharpens its focus and remakes itself into a seller of products rather than an architect of share valuations. Only the most naïve amongst us harbors any ideas that the latest chapter in Dell’s story might lead to storage innovation and a bid for leadership in the space.

Only 3% of Dell’s revenue is from storage, with software and peripherals yielding 16%, of which data protection software is a part. The overall business distribution is more even with 30% of net revenue coming from large enterprise, 20% from consumer and 25% each from SMB and public sector organizations.

Anecdotally, Dell does not exercise the kind of account control as players such as EMC, IBM, Oracle, or Cisco.

HP has not been shy in making generalized predatory rumblings about picking over Dell’s portfolio, and I suspect Dell is a subject of strategic debate in many more functional boardrooms too. Wouldn’t you love to be a fly on the wall over at EMC and NetApp? These storage giants, along with the myriad of smaller storage and data protection vendors, are no doubt strategizing furiously about how to woo customers and key talent away.

On the face of things, storage and data protection represent relatively small, albeit growing, potatoes to Dell. But in the highly competitive mid-tier storage market, these potatoes undoubtedly look mighty appetizing. Dell will need to make big moves quickly if it’s going to keep control of its pricey ($24.5 billion) lunch. In any case, the storage market is sure to heat up over the coming months.

About the Author

Agnes Lamont is an accomplished marketer of IT products and a partner at Marketingsage, a PR and lead generation firm that specializes in marketing data storage, data management, security, and enterprise software products. She can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join her network on LinkedIn and to subscribe to this blog (see sidebar).

IDC has just released its Worldwide Disk Storage Systems Quarterly Tracker for Q2 2011. The shipment of 5,353 petabytes in total disk storage systems capacity for the quarter represents a 10.2% increase in Q2 revenues compared to Q2 2010. Only Dell and the many hundreds of “Others” saw a decline in revenue.

It’s cheering to see some tangible evidence of prosperity and an uptick in IT spending. However, it behooves not only Dell and Oracle (Sun), but the smaller, emerging companies in the storage arena to pause and think strategically about how they can compete against EMC, IBM, NetApp, HP and Hitachi who jointly won 74% of the market in 2Q11.

Technical innovation is only a partial answer. When considering access to market, the conundrum is whether to try to beat them or join them.

Top 5 Vendors, Worldwide External Disk Storage Systems Factory Revenue, Second Quarter of 2011 (Revenues are in Millions)

Vendor

2Q11 Revenue

2Q11 Market Share

2Q10 Revenue

2Q10 Market Share

2Q11/2Q10 Revenue Growth

1. EMC

$1,621

28.7%

$1,287

25.6%

26.0%

T2. IBM

$771

13.7%

$680

13.5%

13.4%

T2. NetApp

$720

12.8%

$572

11.4%

25.7%

4. HP

$619

11.0%

$567

11.3%

9.1%

T5. Hitachi

$459

8.1%

$372

7.4%

23.3%

T5. Dell

$444

7.9%

$472

9.4%

-5.9%

Others

$1,009

17.9%

$1,080

21.5%

-6.6%

All Vendors

$5,643

100.0%

$5,031

100.0%

12.2%

Source: IDC Worldwide Disk Storage Systems Quarterly Tracker, September 2, 2011

Press release: http://www.idc.com/getdoc.jsp?containerId=prUS23012911

Report: http://www.idc.com/getdoc.jsp?containerId=IDC_P4435

About the Author

Agnes Lamont is an accomplished marketer of IT products and a partner at Marketingsage, a PR and lead generation firm that specializes in marketing data storage, data management and enterprise software products. She can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join her network on LinkedIn and to subscribe to this blog (see sidebar).

I don’t think I was alone in wondering what would ultimately happen to Pillar Data Systems. Today that mystery was solved when Oracle announced that it would acquire Pillar in a creative earn-out deal. It seems a fitting conclusion to the story of what always struck me as Larry Ellison’s zen storage garden.

Not since the heady days of Storage Networks have we seen so much cash follow faith into a storage company – $544 million went into Pillar Data Systems! This ending is, zen-like, just a beginning of course. We’ll be curious to see if and how the earn-out terms are actuated, how Nancy Holleran and Mike Workman fare at Oracle, and most exciting of all, what the attach rate of Oracle to Exadata, Pillar and future Oracle storage will be in the coming years.

For Marketingsage’s storage clients, the storage game continues to get more interesting as the ties between storage and applications get pulled tighter, consolidation continues, yet emerging companies still fuel the innovations that shape the technological future of data centers.

The release:  http://www.oracle.com/us/corporate/press/423263

About the Author

Agnes Lamont is an accomplished marketer of IT products and a partner at Marketingsage, a PR and lead generation firm that specializes in marketing data storage, data management and enterprise software products. She can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join her network on LinkedIn and to subscribe to this blog (see sidebar).