Startup Company Success and Role In Industry Innovation
The technology industry is littered with the memories of companies dreamt up by a wide variety of people. Some were greedy, massively intelligent, introverted, rebels, and everything else in-between. But, they all had one goal… how to present a compelling new product to the market.
The investors and brains behind these startups are visionaries. They identify a niche, flaw in the system, paradigm shift, a market, a better way to do something, or even a solution to a problem that does not exist (though, they will do their best to convince you it does).
Startup companies see success in two primary ways:
- Create a product/function that is successful enough to sustain the company for years. The company matures into a viable company and may grow in the future.
- Create a product that has immediate impact in an area and hope that a larger company sees value in the intellectual property and assets enough to buy the company for their portfolio.
However, there is another state that exists… failure:
- The company is fatally flawed in some fashion (poor implementation, improper marketing, inability to penetrate the market, etc…). The company will fail.
The advantage Startup companies have over larger companies is their level of innovation and focus on a single task. All efforts are targeted towards a single goal and provide a service never offered before. Larger companies are forced to support and improve existing technologies and products.
Assuming that a startup can grow into a viable company and provide a version 1.0 product, the biggest issue to face is how to get into businesses and enterprises. The majority of businesses are leery of new companies. All business owners are concerned about is stability. Any discussion they make regarding infrastructure/products should stabilize their environment. So, it is a better investment to purchase and use products from tried and true vendors versus the fresh face in the industry. Questions include:
- What do these guys know?
- What happens when the company fails? Where does that leave me?
- Is this a proprietary implementation?
- Can I trust my vital production data and functions to this unproven product?
- What is support like? (especially important for multinational companies)
However you look at it, the success or failure of a startup is better for all technology consumers in the long run. Startup companies end up being highly innovative and identify areas that need to be addressed in order for the industry to grow and mature. They represent independent thought, creativity, and innovation.
Take the following two companies as examples:
#1 – Aprius (www.aprius.com)
Aprius has identified a new niche market that has opened due to the growth and concepts behind virtualization and growing datacenter bandwidth. Their product virtualizes I/O operations and allows traditional PCIe expansion cards to be centralized and shared across the Ethernet network.
The technology that makes this happen is extremely complicated… and cool. Low latency, low overhead, and efficient. The problem lies in the lack of consistent and plausible use cases. Aside from some very specific use cases, wide adoption of this technology is far from guaranteed. Aside from HBAs and NICs, most companies do not employ PCIe cards in enterprise datacenters… especially with dependence on physical hosts and virtual machine environments. The only plausible use case that could allow for wider adoption would be to license/sell to a blade server system vendor as the blades are inherently unable to expand beyond a couple of physical expansion options.
So, unless a larger company sees value in expanding their blade options, Aprius will struggle to be successful.
#2 – Avere (averesystems.com)
Traditional datacenter bottle necks are always shifting. People are always trying to point to other components that cause slowdowns. Although, with recent growth in server processing and networking products, it is becoming more and more evident that storage subsystems are the clear bottleneck in the datacenter.
SAN/NAS/Storage products are all based on hard disk technologies. Until very recently, these were all spinning disk technologies. Disk densities have grown to ridiculous capacities. Heck, we can store 16GB on something the size of a postage stamp. The problem is that disk vendors have not improved the performance. The read/write head moves at the same speed regardless of the density. As a result, drive performance is sinking.
Enterprise storage vendors are addressing IO bottlenecks by employing RAID techniques, short stroking drives, and suggesting that more spinning disks be added to increase performance. (Note: SSDs are cost prohibitive at this time for most companies)
The brain-trust at Avere has identified this as a bottleneck and developed a product to address this.
The details and technology behind this are fantastic and could be the subject of future posts. But, conceptually, their device sits in the middle of the NAS storage path and provides caching on high performance RAM, SSDs, and 15k RPM spinning disks.
Avere’s product has a couple use cases that are really applicable to enterprise NAS and storage implementations as well as WAN uses. The price point combined with the potential customer base equates to Avere being an extremely viable standalone company as well as an amazing target for acquisition by a major systems or storage vendor.
Aprius and Avere are just two startup companies. Regardless of what happens in the future, their presence and existence is going to force large companies to fill in gaps or risk losing customers and revenue to these newcomers.
As consumers, we will always come out on top.