John Katsaros

Cloud Storage

This is probably as good of a time as any to start our Startup Cloud Storage Category Table – it's our simple way of watching what happens as an interesting segment starts ramping up. So far in this space venture investors have invested $140M in nine startups. We get a lot of feedback on these lists, so please let us know who else we should include in this category. Send your suggestions to jkatsaros@irg-intl.com 

Our Initial Cloud Storage Startups Wall of Fame

Company	Investment	Investors	Location
Actifio	$24M	ATV, Greylock, North Bridge	Waltham, MA
Cirtas	$32M	LightSpeed, Amazon, Bessemer, NEA, Shasta	San Jose, CA
Eucalyptus	$5.5M	NEA, Benchmark, BV	Goleta, CA
Nasuni	$23M	North Bridge, Sigma, Flybridge	Natic, MA
Nirvanix	$22M	Mission, Valhalla, Windward	San Diego, CA
Scality	$13M	Galileo, Credit Agricole	Paris, France
StorSimple	$21M	Mayfield, Ignition, Index and Redpoint.	Santa Clara, CA
Total	$140M

Where Are The Board Members?

The saga of the Sony PlayStation Network's ineptitude with trying to get back on the air after a huge break-in seems to be another example of mismanagement at the board level. The consequences of the break-ins are huge – could be millions of accounts have been compromised including credit card info, the PlayStation Network is off the air, customers are angry and confused. The Sony Brand is melting away. Eventually we'll all find out what happened and most likely it will come in very technical terms – the stuff that makes the RSA Conference so interesting. But what's more important is what probably didn't happen – did the Sony board of directors ever ask its IT team to determine what would be the worst case security breach that could happen which could destroy the Sony brand? And to make sure that it never happens, no matter what the cost. In case after case (breach after breach) it appears that the boards of directors of major companies are not asking the right questions and are not insisting on brand protection from online antagonists. The board structure is there – the board of directors at every major public company has an audit committee composed typically of several of the outside board members. They're the ones who should be asking "what's the worst case scenario" and "show us the plan for preventing this." Strangely enough, that pretty much was what happened when the Y2K concerns happened. Companies are making more than enough money online to build in the necessary defenses. So why isn't it happening now? One reason that we can think of is that it's the security industry itself – can you recall any of the major security companies meeting with board members of the top 100 public companies saying "you know, your brand is in jeopardy – this is what you should be worried about?" If Steve Jobs woke up one day and was CEO of a major security company instead of running Apple, don't you think that he'd deliver this sort of board level message? You can start at the bottom of the organization and it might take you years to work your way up, or you could start at the very top and get an edict to immediately do what's necessary to defend the brand from attack.

Collaboration

A big word - News of Cisco's scaling down of its efforts in the collaboration arena doesn't surprise us. We've always said – collaboration is the hardest topic to chase after because it's about everything – every computer that's running – from those that were built decades ago to those that are yet to come onto the market. It's really hard for technologists to "get it right" when it comes to working in the collaboration area because for every idea that you'll have you're bound to find someone who thinks it's a good idea. So bad ideas can't be dismissed as easily as in other markets. For instance, Cisco's acquisition of PostPath was unfortunate in that it took time and money away from other areas where Cisco needed to be. Cisco didn't need to be in the e-mail software business. Microsoft has been defeating all comers in the e-mail space for almost two decades – you name it – Oracle, IBM, Lotus, Novell and many more – were defeated in the business. And it's not clear what Cisco would have had to gain in the process. But that word "collaboration" can be used to justify a lot of things.

Cisco Flips Flip

And speaking of unfortunate acquisition decisions, the award for most troublesome has to go to Flip. In March, 2009 Cisco acquired Flip Video for $590M and last month shut it down after just two years. If you're going to buy a company like Flip, then you're going to be competing with Steve Jobs. It's hard to imagine the CEO of Cisco calling the product manager of the next Flip phone in the middle of the night saying something like "you know, I don't understand why we put the button over here and not a quarter of a centimeter over where it would be..." That's not the kind of stuff that Cisco does well. Chambers has built Cisco to be a really great company. Cisco didn't get to be the success that it is by its user interfaces – in fact, a user doesn't need to know that he is using a Cisco product. As they say, interacting with the user is not in its DNA.

Our Peet's Index is Down

Our simple way to understand how well the economy is doing is to watch the crowd outside of Peet's Coffee, right across the street from IRG Galactic Headquarters in sunny downtown Los Altos. In the morning it's the spouses driving their bright new fancy cars and in the afternoon it's the job seekers taking a bike ride at the end of the day. Unfortunately, this month's index is down – the fancy new cars aren't new anymore and, worst yet, at 5PM there were 25 bikers hanging in and around the coffee shop. Not a good sign for May's e-commerce index.

RSA Week and Juniper's Shiny New Fabric

RSA is always such an interesting conference we always enjoy writing about it.  As an extra bonus, last week Juniper announced its major new product – QFabric – which gives us more stuff to talk about.

OPENFLOW

For the last year Peter Christy has been wandering around asking bright and influential people what they think about OpenFlow.  His findings will be the subject of an upcoming IRG report: OpenFlow: A Revolution in Network Architecture?  Interested?  jkatsaros@irg-intl.com. Peter conducted a Webinar on OpenFlow – here's a pointer to the replay.  IRG OpenFlow Webinar

Dinner On Us – N-Square Dinner

Mark your calendars.  Our annual Network Networking Dinner is scheduled for Tuesday March 29^th in the Palo Alto area.  The topic for this year's dinner will be OpenFlow – (sorry but we can't tell you any more about it without an NDA:).  These annual dinners have been a lot of fun for everyone – We'll include a money back guarantee that you'll have lots of interesting infrastructure people to talk with.  We've got room again for 100.  RSVP – jkatsaros@irg-intl.com

Look at What I've Done

The unfortunate part about watching Juniper introduce its QFabric was that they spent most of the time telling the world about what a really neat box they're building and almost no time spent on describing the impact QFabric might have on datacenter design (not just the networking stuff).  Yes, QFabric is a wonderful engineering feat.  (They said it cost $100M of R&D money and have spent over 1 Million man hours.)  No, they don't need to focus on their engineering brilliance – that will be apparent soon enough – it takes time away from the really interesting changes (and very large impact) on datacenter design.  But judging from their lack of response to suggestions they'd rather win an Oscar for the category of engineering excellence than Most Important Product of the Year.

Thumbs up or down?

The keynotes at RSA, rumored to cost more than $100K per speaking spot/sponsorship slot, are always an interesting collection of vendors talking about their security product strategies.  In the good old days the CEO's used to show up – Gates and Chambers would be there showing their comprehensive focus on closing security holes.  But these days the topic has cooled off.  The titles are more often General Manager than corporate CEOs and the presentations are not as interesting nor theatrical as before.

We thought that this year we'd do a brief summary of the high points from the vendor keynotes.

Vendor	Keynote Speaker	Summary
RSA (EMC)	Art Coviello	Trust the Cloud
Microsoft	Scott Charney	Kumbaya – work together and we'll solve these security issues
Symantec	Enrique Salem	Walls are broken.  Manage and Protect. Watch out there's really bad stuff out there.
HP	Bill Veghte	NSecurity needs to evolve – Today REACTIVE.  Tomorrow PROACTIVE
CA	Mike Denning	Who, what access, what role? Then it suddenly turned out to be a panel session.
Cisco	Tom Gillis	Collaborate with Confidence. Every Device, Every Moment
Qualys	Philippe Courtot	Hard to tell what that was about – it also turned into a panel session and he became a panelist.  "Biggest fear is fear itself"