Nibble:- Is 200+ Gone Away Storage Companies Necessarily a Bad Thing?

In the early part of 2000, I added a new category to STORAGEsearch.com - to list acquired, dead, renamed, merged & gone away STORAGE companies.

Experience with my ancient Sun focused directory had shown that buyers try to track down suppliers upto 5 years after they have gone bust or disappeared. It's frustrating when a customer actually wants to buy more products but can't locate the original supplier. Often the products (or their successors) are available, but the company has been acquired and is operating under a different name on a new web site and it's hard to make the connection.

Part of my thinking in setting up the gone away storage companies list was also defensive... because it would reduce the number of email inquiries I would get about this subject. I never dreamed this would be popular feature... but it's not unpopular either with nearly 30,000 visitors a year.

In July 2003, the gone away companies list went past the 200 mark. That represents about 20% of the top 1,000 storage companies.

Is this a good or bad thing?

If you're closely connected and work in a company which has just gone bust, or own their shares, or are a supplier who is not going to get paid, you'll say it's a bad thing. But from a more distant perspective, if you're a competitor or looking at the health of the storage industry as a whole - you might take the opposite view.

The first time that the company you work for disappears comes as a bit of shock. But if you're lucky you may soon find another job in the same industry, which is better paid. Your new employer benefits from the trial and error experiences in your old company. Your old company took risks, some worked out, others didn't. But you can apply those lessons in the new company. That makes the new company more efficient and more effective.

You could say that the best of the business DNA from the gone away companies gets picked up and adapted by those companies which survive. Markets evolve. Sometimes they go in unwise directions - like the craziness at the peak of the dotcom era. But when rationalization comes, it doesn't erase the best ideas from the past. It cherry picks them at low cost and recycles them, sometimes in a different form.

It's sad when companies disappear, or an exciting business experiment fails. But it would be worse if lumbering dinosaurs were allowed to continue long beyond their proper time. This business evolution is what makes the breed stronger. So I would say on balance - 200 gone away storage companies is probably a good thing for the storage market. We all benefit from their failures and achievements.

See also:- gone away storage companies, venture funds in storage

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