But now for 2007.
In 2000 and 2001, a massive number of storage companies were funded. For those that developed a product you cared about (and whose VCs that were thoughtful and patient), the products finally came to market sometime in 2003, just as your budgets were starting to inch upward. These companies, including Isilon, Avamar, Kashya, 3PAR, EqualLogic, LeftHand Networks and many others, started to get real traction in 2004 or 2005 and most are doing great right now. I expect those that have not already been acquired, will be this year.
There is another category of products which will get a big boost, but they are not far enough in their cycle for me to put them in the "fruition" bucket. In particular, I am thinking of "information management" products. Not device managers, but real information managers. Products from companies like Kazeon, Scentric, Index Engines, Njini, Abrevity and the like. We typically put them all in the information classification and management (ICM) category. I think these products provide purpose to why you retain data in the first place. I believe 2007 will be the year that many of you actually conduct pilots using these technologies, but it will be 2008 before you will deploy them wholesale.
I have two more predictions for storage. One, that most of the smaller companies with strong products will either be scooped up by the bigger players or go the IPO route. I don't think it would unreasonable for us to see eight to 10 IPOs, barring some crazy international event, of course. All the big players know that if they do not make a move on an attractive startup right now, it will become prohibitively expensive by mid-2007. I am very aware of which companies are in play, but I will have to kill you if I told you. It would be fair to assume, however, that the VTL players fall in this category. I know that most of you couldn't care less if a startup does an IPO or is acquired. The reason I think you do, without even realising it, is that it makes "best of breed" products available to you from a big, strategic vendor and thus reduces your risk.
My last and final prediction is that many companies that have already burned $50 million to $100 million of VC money, but still do not have enough customers lined up, will be sold for mere assets. Unfortunately, a number of chip companies fall in this category. Aristos Logic, Astute, iStor, iVivity immediately come to mind. There are a few others. These companies have been at it for five to six years now, working their tails off. They even have decent products. But, some do not necessarily have enough customers committed to buying their products in adequate quantities. Their VCs are likely tired of pumping fresh money every year. In 2007, some of them will cut off the supply.
I could probably go on for another two pages. But for now, I will sign off. I wish you all a very "fruitful" 2007.
About the author: Arun Taneja is the founder and consulting analyst for the Taneja Group. Taneja writes columns and answers questions about data management and related topics.