10 That Roll the Storage Dice

Naming the top 10 startups in the storage networking industry is never a dull exercise.

It's great to chance to review who's come and gone (and gone public) as well as what technologies are in ascendance.

Flashing forward to this early spring, one can see that blades and virtualization are VC darlings. (See Insider: Storage Boosts Blades and Devil's in the Virtual Details.) Contrast that with a year ago: CDP's now a poor stepchild, consigned to a narrower niche than some startups and investors could have predicted. (See Symantec Swallows Revivio.) That's our merciless market.

As we went through the final edits of our latest top startups, we started to see a pattern emerging among many but not all – of the companies in the lineup. (See Top 10 Startups to Watch.) First, they get us to think about the same, staid storage applications in a different and possibly original way. Second, the "C" level executives understand the value of partners and cementing OEM deals right off the bat. And then there's the fact that most possess the subtlety to disguise whether they're really trying to build a company or just fattening up the veal for a nice feast.

That first point really speaks to technical innovation, though in fairness, some of our picks also excel at their ability to communicate their differentiation or breakthrough. (Yes, we know: marketing.) But since the three-letter acronyms like ILM or SRM are little more than gigantic storage hairballs, we like the fact that Akorri has pared off a subset of SRM – which it calls storage application optimization – to make storage run faster and jump higher. A clever word game, or a delivery of real value to customers? The market ought to tell us by this time next year, maybe sooner.But as you read through the entire article, it soon becomes clear who's really working their business plan (or getting beaten up good by the VC management committee) by the number of partners they've signed, whether it's for co-marketing, OEM deals, or channel players. Every startup has a direct salesforce (OK, maybe just a VP of sales and a part-time assistant), but this carries all the credibility and gravitas of, say, Paris Hilton pushing annuities and municipal bonds. When you're young and small, it's better to walk into customer meetings as part of a larger armada.

It's hard not to read through these writeups and wonder which companies will test the uncertain waters of the stock market and try and go public. Which of them can generate sufficient revenue to make a plausible case for medium- or long-term profitability? Again, who doesn't love anything remotely related to virtualization? And billions have been made testing Metcalfe's exponents, so what's not to like about 10-Gbit/s Ethernet gear?

The more cynical view is that VC money has replaced vendor R&D; a VC-sponsored tabula rasa is where the real lab is, with all its trial and error. One could argue these companies are being groomed for nothing other than acquisition. And it would be hard to refute that for most the companies on our list.

Maybe we should change the title of the feature to Top 10 Most Inspired Dreams, or Overblown Niches. We get that it takes some inspiration and a bit of hype to help this stuff achieve liftoff. Having a window seat for that process is what makes this such a great job.

— Terry Sweeney, Editor in Chief, Byte and Switch0