Outcomes talk. Positioning is, well, marketing.
Disclosure - EMCer here (that means I'm sure I'm biased, but I always speak based on what I personally see and experience, I'm no corporate mouthpiece)
Chris, I've been noting that there will be an inevitable "AFA Armageddon" for a while (so hey, at least I'm consistent).
See my Dec 2013 post here: http://virtualgeek.typepad.com/virtual_geek/2013/12/happy-holidays-merry-christmas-and-2014-top-10-predictions.html (it was prediction #3 - and I would encourage people to take a look and see if I was right or wrong).
1) Startups thrive when the giants are "asleep at the wheel" (there are some that I think are doing that, which you note in some of your other pieces - EMC is certainly not). Startups also thrive when the giants are "unwilling to disrupt themselves" (EMC certainly is with XtremIO - and I don't think it's disruptive enough to "all flashify" yourself by making all-flash variations of architectures built in eras that pre-date NAND and SSDs - customers dig VNX and VMAX including in flash-dense configs - but AFAs they ain't). The window for AFA startups is closed (or at least closing).
2) Startup funding is a lot more complex than people think. By the time the startup is in year 5 (and in round D,E, creative other funding rounds), and burning cash like crazy, the VCs are looking for an out. They will push to create a IPO (if not acquisition) HARD - and then cash out (and implosion often occurs right after - because employees start to bail). Remember that VCs need to get a 20x-ish return to make their model work.
The question for a startup isn't "is your revenue growing" (that's easy) or "are you well funded" (answer will be yes) or "have you won some deals against incumbents" (sometimes we create an opportunity by not being responsive to a given customer).
Rather, the right questions are:
Q: "what is your burn rate?" (how quickly will you burn your latest round);
Q: "how is your burn rate closing" (accelerating burn rate = bad in late stages);
Q: "is your cost of sales growing or shrinking?" (if it's getting harder to sell your stuff = bad);
Q: "is your margin shrinking?" (competitors are making life hard for you even when you win);
Q: "what is your growth rate - not in percentages, but in absolute terms?" (when you have $5M in revenues, getting to $10M is easy - but if in that same time, others grew from 150M to $300M = things aren't going to end well).
These are all the things that are cues to how a startup is REALLY working.
This isn't to say "startups bad" - my goodness, they are an innovation and disruption engine (one that we leverage a lot through our own venture funding and acquisitions). But - that it's a hard battle out there.
I personally welcome the competition, it makes us all better. But in the end, the customer speaks.
I love that people (including an earlier commenter) that EMC has a broad, overlapping portfolio. That's one of the reasons we're doing so well - and as a public company, our results speak for themselves. We're growing in almost every segment (except the enterprise high-end, where we are doing well in terms of share, but that whole market is in the process of being disrupted).
I would be concerned as an AFA startup that thinks we're asleep at the wheel, or not willing to disrupt ourselves - because we are well north of a $1B run rate in 2014, and accelerating. When the disruptors are #2 (or worse) in a market segment, and #1 is accelerating and growing faster than they are - it means "tomorrow will be even harder than today".
That said - I'm sure we'll see some IPOs, and perhaps some acquisitions - but this AFA space is NOT a good place to built a startup right now. There are many other great places for startups - I would argue infrastructure isn't the best segment as a whole for startups.
I have a healthy respect for all our competitors. Bring on the competition! :-)
Biting the hand that feeds IT
