Digital data continues to grow at an exponential rate and disk storage is becoming cheaper and abundant. With the explosion of data capacities managing data, continuous reliance and compliance requirements are driving the need for innovative storage technology opportunities driven by the resurgence of emerging storage companies.

With the loss of luster in telecom, there was a big resurgence in storage startup investment during 2000-2001. Over a billion dollars was invested in storage startups like Zambeel, Rhapsody, Pirus, Storageway, Sanera, Maranti, besides others. The figure below shows where the money went. The biggest gamble was in the SSP arena, which failed miserably.

The regulatory implications of Sarbanes-Oxley, HIPAA, SEC in the enterprise arena, results in large amount of “business-important” information that is backed up and accessed periodically. This has enabled technological innovation in the areas of nearline storage (addressing cheaper capacity), continuous data protection (to backup and restore data), clustered file systems (manage storage heterogeneity) and content enabled file systems (for easier data access).

IT managers are under pressure to find storage solutions that delivers more capacity, while providing a high-level automation, ease of management and use.

SiliconStor is one such startup that is developing silicon technology to facilitate the use of low cost Serial ATA drives in enterprise class nearline disk array applications without sacrificing reliability, redundancy or data availability.

Enterprise class backup and recovery has received a lot of attention by virtue of being dependent on digital data for business continuity and compliance. IDC projects, the market for backup software will exceed $4 billion in 2007. Apart from a large number of incumbents, a number of startups that have been funded to address this space including Timespring, Mendocino Software and Revivo.

These companies develop and market continuous data replication, recovery and application recovery management solutions to enterprises. Companies like Mimosa address email archiving solutions, since email has become the backbone of most operations today and are also governed by the compliance requirements.

Bringing intelligence to file systems is another area popular among storage startups. GridLogics, a storage startup, claims to have developed unique mathematical algorithms to implement a GridFS file system for shared data clustering to maximize the performance of storage I/O in clustered Linux computing environments. Kazeon Systems, another startup is building application-independent infrastructure services that provide consistent information visibility and control across diverse unstructured data sets, such as user files and email.

The enterprise arena, has been the traditional playing field for venture funded storage startups, the small medium enterprise arena is proving to be the space promising tremendous growth for storage especially for startups to capitalize in the future. This is because the requirements of an SMB environment today are what used to be enterprise class requirements just a few years ago. Hence technology migration coupled with business continuity and compliance requirements are creating this tsunami of opportunity for startups developing storage solutions for the SMB arena.

The hottest storage technology need in today’s small and medium business marketplace is a hands-off Continuous Protection of Data. IDC projects that SMB market for archiving and recovery will exceed $1 billion by 2007.

Generally all companies say rapid recovery with little manual intervention at a low cost of entry is crucial. Automation, ease of use, ability to allow backup/recovery operate virtually unattended in the background is critical for SMBs with limited or non-existent IT resources. SMBs clearly want to implement solutions that offer robust, enterprise-class data protection functionality such as snapshots, replication and CDP. The myriads of enterprise class solutions available today are not able to service these needs.

Agglut is a Silicon Valley based startup address this need by bringing enterprise class features in an easy to use appliance format for providing continuous data protection for desktop, laptop and servers alike in a networked environment. These appliances provide a very high level of automation for an out-of-the-box-experience required in the SMB arena.

Overall it is an opportune time for storage startups to address the digital data explosion growing annually at the rate of 5 million gigabytes, hence requiring management. Reminds you of that overflowing garage—any solution for that!!

Ram Gopalan is a 20-year marketing veteran for the storage industry in the Silicon Valley. A parallel entrepreneur, he advises early-stage storage companies and venture capitalists in the storage and semiconductor arena. He can be reached at rgopalan@aol.com.