It wasn’t that long ago Apple Computer was started in the Jobs’ family garage, the first Sun workstation was cobbled together with spare parts leading to the founding of Sun Microsystems by Vinod Khosla, Andy Bechtolsheim, and Scott McNealy. NetApp’s founders, Hitz, Lau and Malcolm entered the appliance market with its network attached storage solution, competing with Auspex. And it wasn’t all that long ago EMC was a little memory and disk company I used to call on who gave me more aggressive pricing on the 450MB drives I needed for the WANG VS 7310 I was managing. It really wasn’t all that long ago, but look at these companies now and the impact each has had to our market.
Apple changed the way we approached the personal computer, it also changed how we produce graphic art. In 1987 I worked for the Ad agency, Chiat/Day, not just any ad agency, but Apple’s Ad agency. The creative team at Chiat/Day, led by Lee Clow, created the 1984 Commercial putting Apple on the map and opened our eyes to what could really be possible. Chiat/Day put a Mac on everyone’s desk and every creative used the Mac to create the storyboard and the mock ups used by the Ad pitchmen of Chiat/Day. It was an awesome expression of how Apple was changing a society, it also caught the eye of other agency clients who wanted to pay less for the storyboard and mock up fees since they knew most of the work was being done on the Mac and therefore not requiring as much “creative” effort as in the “pre-Mac” days. Yes, it changed everything.
Sun Microsystems became the workstation of choice for engineering houses. When I was a consultant back in the 90’s, Unix was the operating system I spent most of my time working with and Sun was the workstation and server most of my clients used at the time. It wasn’t long before Sun was making it into more than just the engineering houses, it made a mark in finance, healthcare, insurance, you name it – Sun was competing against the big giants of the industry and winning.
NetApp started in 1992 – NAC as we called them back then, Network Appliance Corporation was bringing in its network attached storage solution to displace the big Auspex black towers many of my clients had purchased but ultimately had became disappointed in – by 2003 Auspex had gone out of business after falling way behind Network Appliance (NetApp) in the market who bought the Auspex patent portfolio in its liquidation.
I don’t think I need to go into detail about EMC, other than the fact that it started in the memory business in 1981 making memory boards for Prime Computer initially. This company had rapidly evolved into a massive storage solution provider by the 90’s with the introduction of the Symmetrix developed by a team lead by Moshe Yanai which truly jettisoned the company to where it is today.
The point in all this history rambling is…that was then, this is now. How much continued innovation do you see from these companies today? While I will say that there certainly is innovation going it is clearly not the level of innovation we saw in the early beginnings of these companies. Now do not take me the wrong way, this is not a dig or meant to be an insult to any of these companies, I am merely stating an observation from a variety of discussions I have had with customers, resellers and peers.
Have they stopped innovating?
For many people if something isn’t invented within the four walls of the company, then the company isn’t innovative. This is what sometimes is called the NIH syndrome or “not invented here”. I would say innovation through acquisition is not necessarily a bad thing – as long as the acquisition is done properly and the company can monetize the investment rather quickly. My good friend, Greg Schulz (@storageio on twitter) talks about solutions that provide a good ROI – Return on Innovation. While he was talking about Return On Innovation as it relates to customers, choices and implementation, I believe this applies to my discussion here as well. When these big companies, NetApp, EMC and now Oracle (acquired Sun) make acquisitions of smaller companies they are definitely looking the ROI from both the investment and innovation perspective. I am sure in all of these board rooms there is the “Build or Buy” discussion going on and what makes most sense from a customer and business line perspective. Why invent when you can buy the invention and inventors? Acquiring in adjacent markets to expand its business reach, acquiring in emerging markets to increase contemporary relevancy, acquiring competitors to expand marketshare leadership. It is not that these big companies have stopped innovating, in fact I would suggest these big companies help foster growth in the startups as “think tanks” to test the validity of new solutions, technologies and emerging markets.
This is not to say these market leaders or any other established provider have stopped innovating, in fact they ARE innovating but to some in this industry innovation=shiny new object not 4x improvement on performance over previous generations of the same solution. While I would call that innovative, others would call, “eh, a bug fix”.
Innovation: the introduction of something new. A new idea, method or device. Novelty
That is how the dictionary defines innovation, so it isn’t just a new invention, it is something new like faster performance, like greater scalability or a smaller widget. Innovation is happening in our industry both at the well established storage vendors and the fresh new startups.
What does this all mean anyway?
Well, here’s my take on our industry. The biggest players in our storage industry continually monitor the startups of the tech world looking for new and interesting technology to extend or expand existing product lines and/or find solutions in emerging markets to help drive market share, awareness (relevancy), with a good return on the innovation. One CEO from a very large storage provider once told me we will never again see a storage startup hit $1B in revenues again, the market is too competitive and getting too small. It (the startup) will be acquired. This just makes good business sense, innovate your own product and solutions with your R&D budget, continue to watch the market for new startups and old ones (heck there may even be a 20 year old company out there that just hit on something that is making huge waves in the storage world) and use your M&A budget to expand market share, awareness and leadership. It is a fine line, but that is why companies have been hiring strategists to help make the right decision and the smart decision for Buy or Build.
From my perspective the startups of the tech world is everyone’s R&D department and everyone is paying attention.
-Chapa signing off