Forecast: Shakeups Looming in the Cloud: Page 3 of 3

Prediction #3
I have spoken with a number of VCs and, based on their feedback, estimate that over $130 million has been injected into cloud gateway companies such as Nasuni and Cirtas during the last six to 12 months. These vendors make products that move data from your data center into the cloud. VCs may soon realize (and some already have) that investing in these kinds of technologies may be the economic equivalent of investing in startups that move your data from your data center storage to your tape library. Nobody charges for moving data to your tape library, so why would you pay for data to be moved to the cloud? There would have to be an exceptionally compelling reason to do so.

VCs may have gotten too excited about the term "cloud storage" and invested in parts of the cloud that are actually features--not actual business-critical capabilities. Some people forget that these cloud gateway suppliers don't actually store anything, and I think VCs will sharpen their focus and redirect their investment dollars more toward actual cloud storage startups delivering innovative business solutions for IT customers--the type of technologies that customers actually entrust with storing and protecting their data--and less toward those that are adding to IT cost without clearly demonstrable ROI. Gateway technology startups are good candidates for acquisition--more for their technology than for the business model.

More cloud predictions will follow throughout the year. In the meantime, what are some of your predictions for this space? What products are you having success with?

(EMC, Oracle, Nasuni and Cirtas are not past, or present, clients of Tom Trainer or Analytico.)