The recent news in which storage giants EMC and NetApp are bidding against one another to acquire deduplication specialist Data Domain has everyone in the industry talking. For now, NetApp is claiming victory, however the story is far from over. From where we sit, all of this reinforces our conviction that storage optimization is a huge and growing market.
As a company, Data Domain has done an outstanding job of execution in the backup market for storage optimization. My company Ocarina Networks focuses on the adjacent (and we think larger market) for online storage optimization. Therefore, this bidding war only further validates our model.
For some time now, there has been a debate about whether storage optimization is a feature or a product? Here is my answer: YES and YES.
Time for me to clamber up on my soap box for a few minutes. In the startup world there is something known as the Hierarchy of Startup Value (a la Abraham Maslow). It consists of the following four levels: Technology, Feature, Product, Company.
1. Technology: Most startups have this and usually that’s all they have, along with a team. Some of the technology may be interesting and valuable to users. Many times, it is not.
2. Feature: Even though a startup introduces the technology as a product, many times customers want it as a feature of something else. An example in storage was Continuous Data Protection. Customers did like it, but as a feature of a storage solution. We think that online storage optimization will be a feature of storage systems — in fact, this is already underway.
3. Product: For reasons of technology, scaling, deployment, etc. some customers want to buy a capability as a separate product–for example, the Ocarina content-aware storage optimization solution. What it provides is very compute intensive, while a filer is IO intensive. To do what Ocarina does would bring a filer to its knees. Thus, the technology, by its very nature, makes it into a product. The customer could try a feature first, like NetApp’s dedupe. However, when they want the real thing, we win on the taste tests.
4. Company: If a market is big enough and a startup executes well, then it can go on to be a profitable, growing business that will not only compete in its industry, but in the capital markets through its stock value.
As we’re now recognizing, those in the storage industry who dismissed Data Domain’s backup storage reduction as “just a feature” were proven wrong. It was a product AND a company. Our belief is that online storage optimization is both a feature and a product. We also believe the market for this capability is very horizontal and very large and can likely support 1-2 public companies in the future. No matter where Data Domain ends up–at NetApp, EMC or as a standalone company, we congratulate them on their success and wish them well.
Murli Thirumale is the CEO of Ocarina Networks, the leading provider of online storage optimization solutions.
