Forbes Article Talks About Actifio and EMC - A Point of Clarification and How To Make A Few Billion Dollars

First, I can't believe that after changing the name of ESG from Enterprise Storage Group to Enterprise Strategy Group almost 13 years ago, I still got called the former in this Forbes Article.

The author quotes me somewhat incorrectly a few times, but the overall point was correct. I didn't say EMC follows the "5 step program" outlined specifically, I said all incumbent players tend to do this.

What I was referring to is the fact that when a new disruptive technology begins to encroach on an established market, the big incumbent almost always follows this path (which, FYI, is exactly what I would do in their shoes):

  1. They disavow the startup player as meaningless, and that they will go out of business most likely (which is completely accurate statistically).
  2. If the market continues to allow the startup to execute, the big guy then tells the market/customer base that it too shall offer those features soon - within their existing product, such that the customer can get all the joy from the new features without having to add any new product or vendor - something customers are typically loath to do.
  3. If that doesn't work, the incumbent actually rushes some feature to market that is in the ball park - and normally that release is pretty bad. But it freezes some momentum of the startup, which gives the big guy time to get its act together.
  4. If the startup continues to grow quickly and retain or accelerate market traction, it gets itself into a position to go public or be acquired for a lot of dough.
  5. One of the big incumbents who are threatened - or who want to threaten a competitor, then buys the startup who is probably now already public, for a huge pile of dough.

This model worked for 3Par, Data Domain, Isilon, and a host of others. In those three cases it worked well for the acquirers and the sellers. In other cases, such as Autonomy, it was an unmitigated disaster financially.

Specifically to EMC/Actifio, I applaud Actifio for trying to tell the world that EMC has bought into the entire Actifio story line and is "reorganizing" to make a play here - but the reality is that anywhere there is data that EMC manages or controls, it's always going to try to maintain its value level. It makes obvious sense to me (and I think most) that since EMC has a prime copy of data already (backup) it can deliver that data to other business applications OUTSIDE of just backup and recovery. It's not really fair to characterize anything they are doing as a "reorg" or a reaction directly to Actifio, but I love the way they (Actifio) make it look that way. That's just good old fashioned marketing chutzpah!

EMC doesn't need anyone to tell it that since it has the data already, there are more things they can do with it to extract more value for customers and hence, more money for themselves. They figured that out a long, long time ago.

Topics: Storage IT Infrastructure