Storage Start-Ups May Be Missing The Mark

"The first question I have [for start-ups is, what is your [return on investment?" said Mark Romanowski, senior vice president of client services and business development at New York-based solution provider AMC. "Who is your competition? Your references? When I ask, most can't answer. Give me those answers first, not a PowerPoint presentation."

Romanowski said he is bombarded daily from start-ups looking to partner with AMC, but most talk only about features.

"The technology will take care of itself," he said. "I'm looking for a business solution. As long as the technology is tied to the business solution, [that's OK. I don't look for only new bells and whistles."

Solution providers say start-ups need to focus first on the business proposition, then features.

Dan Carson, vice president of marketing at Open Systems Solutions, a Yardley, Pa.-based storage solution provider, frowns on many of the start-ups because of their lack of a business proposition.

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"Most of the start-ups are so parochial in their view," he said. For example, they "aim to bring all the management functions under a single interface, but really all they are doing is launching other vendors' applications. What is the value they bring?"

But even as solution providers shake their heads, the venture capital money keeps flowing to the sector, with much of it landing with up-and-comers focused on specific management functions or features.

In December, Mountain View Data, a San Francisco-based developer of software that turns PC servers into high-performance network-attached storage appliances, secured $3 million in outside funding. Aristos Logic, a Foothill Ranch, Calif.-based spin-off of Western Digital that develops ASICs and virtualization software, received $15.5 million.

Derek Gamradt, vice president of engineering and CTO of StorNet, an Englewood, Colo.-based solution provider, said the number of start-ups is an indication of a healthy, innovative industry.

Gamradt pointed to Veritas Software's acquisition of 10-year-old The Kernal Group, developer of Bare Metal Restore, an application designed to fully automate the recovery of Windows and multiple Unix systems.

"You'd think Veritas would have developed [Bare Metal Restore a long time ago, and then along comes The Kernal Group," he said.

While many start-ups look to direct sales or OEMs to build an initial market for their products, some put channel programs in place relatively quickly.

Bocada, which develops software to simplify the reports related to large, heterogeneous backup environments, launched as a company in September and next week plans to unveil an update to its BackupReport application. The Bellevue, Wash.-based company plans to unveil a program to simplify its relationship with solution providers next week, Bocada executives said.

Invio Software plans to unveil both itself and its software next month, said Chris Hyrne, vice president of marketing. The Palo Alto, Calif.-based company,which develops network storage management software to automate management practices,is seeking solution providers but has not introduced a formal channel program, Hyrne said.