DOCUMENT: (About) All Dead Storage Start-Ups

We have filled a database since many years with all the storage start-ups we have discovered. This files contains exactly 700 companies today. 23 became public, 193 were sold – including some of them that became public before their acquisition. And 126 died and were closed.

At the end, a storage start-up has 18% of chances not to survive – 28% to be acquired and only 3% succeed with an IPO.

For their investors, death is a shame. The most spectacular example is StorageNetWorks, born in 1998 and that received $205 million in financial funding before dying. Sanrise got also got as much as $203 million.

Several of them even never went out of stealth mode.

It’s easier to find a new start-up
rather than to know when the firm stopped its activity. There is never a press release for such a bad event. The best way is to verify if the firm closed its web site.

Here is  ranking of all these dead firms by activity
(when known):

• Software: 42%
• Hardware: 34%
• Fundamental hardware technology: 15%
• Connexion: 5%
• Infiniband: 4%
• SSP: 3%
• Security: 1%

Note: total is more than 100% because some firms are classified in more than one category.

Why they didn’t succeed?
There are a lot of reasons, among them:

• Good technology but launched too early, the market not being ready. Sometimes it’s not the best to be the first one. An example is Platypus with SSDs as soon as in 1999.
• Abrupt competition because the technology was really impressive and rapidly duplicated by big competitors.
• Bad idea and no market (like Cornice in small form-factor HDDs) or already filled.
• Storage fundamental technology on paper never possible to achieve (holography, etc.)
• Inept management.
• Proprietary technology without second source not acceptable for OEMs or end users.
• Not enough financial funding to survive.

                        
All Dead Storage Start-Ups