Cloud

Thriving in an Emerging Market

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When I joined software-defined storage vendor Nexenta in 2013, I had never run a software company, I had, however, recently been CEO of Wyse Technologies before the thin-client maker was acquired by Dell.  And though the companies looked vastly different on paper, I recognized many similarities in their businesses.

Most obvious? Both companies were leaders in a rapidly innovating market. By deploying many proven emerging market strategies, we have grown Nexenta’s client base to 6,000 organizations – and counting. Here are a few of the tactics we used to survive and thrive:

Align Your Product with Your Market

Where Wyse was primarily a hardware company, Nexenta is all software. The product grew out of Sun Microsystems 17 years ago and had made a name for itself as a solid open source solution. But we realized that we needed to raise our game to provide the compliance, support and disruptive innovation major organizations demand in order to be accepted by the enterprise.

We focused on developing internal operational excellence to ensure our sales, marketing, development, finance, and HR were all globally aligned to deliver enterprise-level solutions to our customers and partners. We provided support for customers and the channel.  At the same time, we remain committed to the open source community: we contribute code and we run on any hardware or software our customers desire.

What changed is our ability to deliver licensable, manageable, scalable, certifiable and testable products. We developed not one but a whole portfolio of products that combined into a platform.  Then we decided that rather than “pay as you go,” we would charge a one-time perpetual license fee – as low as one cent per gigabyte forever. Our pricing made enterprise customers ecstatic and disrupted the entire storage industry from a financial perspective. We succeeded in evolving an amazing open source product into a profit-oriented enterprise software company with 6,000 customer deployments today.

Cultivate Your Ecosystem while Building Value Networks

When I first took over at Nexenta, I was often asked, “Why don’t you sell direct?” I’d always say that it is a waste of time and resource for a new company. We were focused on building out a massive, friendly, healthy partner ecosystem. After three years, we have more than 300 partnerships and OEM engagements. That translates to thousands of people who have helped us to create a multi-billion dollar company value network via global companies like Cisco, Dell, Ericsson, IBM, Intel, Lenovo, Softbank, Supermicro, VMware, and Wipro. 

The fact is that no startup can succeed by itself – though plenty try. Most entrepreneurs find out too late that they’ve set up a cost structure that prevents them from doing the “right” deals; they’ve burned through their cash and didn’t grow. As a last ditch effort, they go crawling back to the channel but they’ve already been burned and it is too late.

 This is not our first rodeo. Many of Nexenta’s executive team members came from Wyse where we also worked hard to build a solid channel ecosystem – it was built via a different process but achieved the same goal. We know the satisfaction that comes from building more value for customers when you have multiple partners supporting your products.

Learn from Your Biggest Clients

We’ve got massive clients at Nexenta – our web extends from down Highway 101 to Stanford Hospital where my daughter was born, to across the country where we power the IRS’ storage, to across the ocean where we power Korea Telecom.  We are keeping a leg up against the competitors who want to break into these clients by striving for deep customer intimacy.

By working closely with these and other key customers to innovate our products, we achieve a “win-win:” we end up with a better product and they end up with a better way to improve their business with technology. These deep relationships show our commitment to the satisfaction of our customers and partners and result in big organizations committing an increasing amount of their storage and solutions to our portfolio.

Connect to your “Influencer” Network

At the end of the day, executives at emerging companies are aiming to take a new technology from obscurity to the mainstream. To succeed, you have to be a member in good standing in the broader network of professionals and communities who impact your business. It is well known that you need to foster working relationships with investment bankers, venture capitalists, industry analysts, and journalists. But it is more than just signing up as a client and buying some reports – unfortunately, that is the easiest part. To create a good relationship, you have to meet regularly to get the feedback of these influencers. You can’t be defensive when they say you have “ugly children,” you just get to work to make them “better looking.”

But your networking shouldn’t stop here.  At Nexenta, our work with influencers extends to those in academia, non-profits, and the local community as well. We work with the Silicon Valley Education organization; we’ve started a new storage curriculum at the San Jose State University graduate program; and we’ve worked with Stanford and Berkeley to study how the manufacturing process is moving to Asia. All of these endeavors have helped us stay in touch with our network, receive critical feedback and develop better next-generation products.

Sell the Market to Sell Yourself

When marketing an emerging technology, you spend a lot of time teaching the market about the value of your solution  – so you are selling your products along with that of your competitors. We like to say, “What VMware did for servers, Nexenta does for storage.” It is a simple analogy and people get it. 

Our reward? The word is out and we’ve attracted even more players to our space. But we’re not worried because we can distinguish ourselves by demonstrating our customer successes. I just met with a $30 billion customer. They affirmed our approach and said they are going to move even more heavily into software-defined storage. Our reputation as a category creator, enterprise software vendor, ecosystem builder and network influencer precedes us and assures our customers that we provide a superior solution to that of other vendors. 

Keep “Emerging”

We still see software-defined storage as an emerging market – even though we created the category 17 years ago. We know that emancipation from the desktop translates to exponential growth for the storage industry – and we plan on continuing to lead the transition from hardware- to software-based storage.

At the same time, we believe that all innovation-driven companies are always working to “emerge” with a new vision, with a new market, with a new product or with a new partnership. Holding onto the passion and excitement for growth can keep your team focused and moving forward. Our goal isn’t to raise money and play the M&A game as most start-ups do. Our goal is to become cash flow positive, and build a great company for the long term; and beyond that, we aim to build a sustainable market segment for ages to come.

That said, there becomes a time when communication priorities shift. Emerging market companies become ready to build their own brand. At Nexenta, we plan to have our customer successes show how the game is changing. We plan to turn the storage industry upside down. And in the next few years, you’ll hear a lot more about how Nexenta will get it done.

 

Tarkan Maner is CEO of Nexenta.

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