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ESG's Friends & Family Deals: Page 3 of 5

Adds Duplessie: "I really do not think this is a story. Our finances are nobody's business."

Some in the storage industry, however, aren't sure ESG is completely above-board. "How can a consultant who wants press all the time have interests in the companies he is extolling the virtues of?" says Mike Workman, president and CEO of Pillar Data Systems, a storage systems startup backed by Oracle Corp. CEO Larry Ellison. "And if he has an interest in some, then is he really unbiased on the others?"

According to Workman, ESG -- specifically, Duplessie -- did offer to take shares in Pillar Data "many times, point blank, and in front of 10 people. Frankly, I was a little shocked."

Asked about Workman's version of events, Duplessie confirmed that he did offer to "take a split of equity and cash instead of all cash" because, he says, Pillar Data said it didn't have the budget to retain ESG. "Thought I was doing them a favor, but apparently not," Duplessie says. "I'd still like a piece of that company. I think they have a great shot to do real damage. We'll also continue to help a ton of other startups, and if that means taking a gamble on some stock, so be it. I like startups."

ESG, to be sure, has plenty of admirers. "I can tell you that in my experience, ESG has been extremely ethical," says David Scott, president and CEO of 3PARdata Inc. "ESG has never asked to be paid for an 'independent report' to be written -- unlike some other analyst organizations, whom I have politely refused to play ball with."