How Storage Startups Crack into The Giant Market

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It’s no secret the storage system market is ruled by a handle of top-tier
vendors, such as EMC (Quote), IBM
(Quote), HP (Quote), Dell (Quote) and
Hitachi Data Systems (Quote).

These companies command some 95 percent of a total disk storage
market that IDC said notched
$24.4 billion in 2006. But there’s still a few billion dollars to be made in
the storage system market by companies that don’t bear the behemoth names.

So what does it take for a startup to crack into a market that is all but
locked up by a handle of the world’s largest high-tech companies? Is it
luck? Performance? Simplicity? Economic efficiency?

Try a little of all of the above.

Gartner’s Roger Cox said startups accounted for 3.5 percent of the storage
system market in 2005, and he expects that number to be higher when the 2006
figures come out later this month.

Such alternative vendors include Pillar Data Systems, BlueArc, EqualLogic,
Lefthand Networks, 3PAR, Compellent and agámi Systems, which has recently
come to market.

StorageIO analyst Greg Schulz said that in the area of performance, bigger and
established doesn’t always mean faster. Moreover, more drives, host ports or
cache on a system do not guarantee faster performance.

Schulz pointed to agámi Systems, which recently introduced a hybrid storage server capable of concurrently storing file, or
network-attached storage (NAS) (define), and block-based data via
Internet-based storage area network technology, or iSCSI (define).

Other vendors make hybrid systems that handle SAN and NAS, but Schulz said
agámi promises very good performance — 1 gigabyte per second — with slower
and fewer disks because the company’s systems are efficiently put together.

“They will win on performance as a differentiator, or a combo of performance
and features,” Schulz said. “Agámi doesn’t have things popular in NAS like
clustering for high availability, yet they can replicate one agámi box to
the other, which gives you failover protection.”

Taneja Group Founder Arun Taneja said competition is so tough these days
that startups almost have to have a value proposition “where the listening
party has to consider himself to be stupid not to seriously look at it.

“It has to be so attractive and genuine that you cannot not do it,”
Taneja said. “That’s really what a startup has to do in this day and age to
get any traction particularly on enterprise. SMB receptivity is much better
to a startup because they don’t have the same restrictions big Wall Street
companies have.”

Taneja looked to a company like Lefthand Networks, which sells boxes like
everyone else but seeks to really differentiate with its provisioning
capabilities.

This article was first published on InternetNews.com. To read the full article, click here.