Cloud Storage Startups: In Partners We Trust


The sheer number of new startups and relative newcomers to the cloud storage industry is a testimony to the massive growth in the amount of data industry watchers—in particular, investors—are expecting to be stored online going forward.

Given the value businesses place on their data, however, solution providers and MSPs tread carefully when it comes to looking for a partner who can help provide technology they can use to bring cloud storage to clients.

Even so, solution providers do not reject the new cloud storage offerings from fellow entrepreneurs out-of-hand, but instead tend to carefully vet their offerings before taking them to customers.

[Related: Cloud Storage: 10 Startups Who've Scored Big]

Finding the right cloud storage partner will continue to be an important task for solution providers for the future. Indian-based analyst firm MarketsandMarkets estimated early this year that the worldwide cloud storage industry drew in about $5.65 billion in 2012.

MarketsandMarkets also estimated the market to grow at a compound annual growth rate of 40.2 percent through 2018 to reach $46.8 billion, thanks to both a high adoption by SMBs as well as a rapid growth of personal cloud use by consumers and employees.

Choosing a cloud storage provider is not about size, said Larry Velez, CTO and founder of Sinu, a New York-based MSP.

"Microsoft, Google Docs, even EMC doesn't have all the right answers yet," Velez said. "We don't have mainstream solutions for a true SaaS [Storage-as-a-Service] solution, so we had to look at startups."

For solution providers, many of whom are founded by entrepreneurs, there is a desire to help startups, even in a market like cloud storage where lost data could mean the end of a customer relationship or, depending on the severity of the loss, the end of the customer.

It is essential that startup cloud storage providers make it clear who they are and who is behind them, said Alain Bezahler, president of BCPi, a Sharon, Mass.-based networking and security solution provider.

"I'm all for startups," Bezahler said. "But in this case, we're dealing with customer data, so we have to be careful. I've been in business 21 years, and some of my customers have been with me that long. We have to partner carefully."

A good cloud storage startup starts with good investment backing, several solution providers said.

"This is about trusting someone with data," Bezahler said. "It's not like trying a new monitor."

If a cloud storage startup is founded by someone from a company like EMC and has the backing of a well-established venture firm and is a well-run enterprise, Bezahler said he would talk to them. "But I get calls all day from companies trying to sign me up to their service," he said. "Someone has to be there with support any time."

As a fellow entrepreneur, Steve Combs, president of IS Support, a Houston-based MSP, said he supports startups as part of an overall goal to embrace the best possible products and services available.

However, Combs said he is more likely to support a cloud storage startup that is focused on the backup side of the market, and not on the production data side.

"From a cloud backup perspective, I would talk to a startup," he said. "I would look at who they are, and at how they would handle customers' data if they went out of business. They would need a clear receivership plan to show how customers could get access to their data."

IS Support is currently exploring the possibility of partnering with alternative cloud storage providers, including startups, with the right technology, Combs said.

"My current cloud provider is very good," he said. "But it doesn't have agents that allow for fast backups to the cloud. We're looking at alternatives."

Velez said a cloud storage startup looking for his company's business needs a solid backup strategy beyond saying, "Just trust us."

"They will need a plan if they go away," he said. "They need to show how customers can get their data out of their system. The better their answers are, the easier it is for us to make the decision." It also would help if cloud storage startups come to market with the ability to integrate their offering with Microsoft Active Directory, Velez said.

"That's a big deal," he said. "Microsoft dominates the directory in SMBs, and even in enterprises. Dropbox just added Active Directory integration. You really need to use Active Directory if you want to share files in the cloud."