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VC: Storage Startups Need Help

The storage market has entered a new phase and IT customers are ready to spend, but they're tougher than ever on startups. Without a solid understanding of what's needed -- and partnerships with big storage vendors -- new companies will miss the opportunities available.

So says Peter Bell, a storage industry veteran and the latest team member to join VC firm Highland Capital Partners. He says IT pros have costs and capacity under control, and they're looking for solutions that help them leverage information, not just store it.

"Customers want to know, 'What can I do to make my business more productive?' Startups need to really understand the challenges of the enterprise," says Bell.

As part of Highland Capital's team, Bell has access to the firm's latest fund, totaling $800 million, but he's focused more on quality than quantity, and he says the firm doesn't have a specific goal regarding the number of storage plays in its portfolio. Right now, the firm has Exagrid Systems, HighGround Software, and Virtual Iron Software on that list.

"It's hard to break into the data centers unless you have a really strong understanding of the enterprise and can partner with leading companies," he maintains. "Storage prices keep going down, and capacity levels are under control. It's not about the storage device, but the information that sits on it. I want to find the entrepreneurs that have industry focus and application knowledge."

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