Solution providers often turn to established IT vendors and their expansive product portfolios when addressing their customers’ technology needs.
But in the fast-moving IT industry some – perhaps even many – of the most innovative ideas and technologies come from startups. Unencumbered by legacy products or legacy thinking, startups develop leading-edge technologies to tackle IT opportunities that the big guys may not yet recognize.
Startups often set the pace in segments of the IT industry where technology development is moving the fastest including big data, cloud computing, the Internet of Things, networking, and security.
Solution providers looking for a competitive edge should take note of startups with breakthrough technologies that create opportunities to develop innovative, high-value offerings for customers.
Here we present the CRN 2021 Emerging Vendors, 126 startup companies founded in 2015 or more recently with annual sales of less than $1 billion and are working with channel partners in North America.
Some companies on this year’s list have already established a presence in the industry. Cloud storage company Wasabi Technologies has made a name for itself as it competes against Amazon Web Services and other giants, for example, while threat detection and response technology developer Huntress has attracted attention amidst this year’s wave of cybersecurity attacks.
Others are just getting off the ground – but are already making waves. Machine learning tech developer Tecton, a San Francisco-based startup that exited stealth last year, is generating serious buzz in Silicon Valley.
For evidence of the potential value of IT startups, one only need look at the venture capital that has flowed to some. SambaNova Systems, a Palo Alto, Calif.-based developer of advanced hardware/software systems for running AI applications, raised a stunning $676 million in funding in May, putting its pre-money valuation at more than $5 billion.
Security startups have been especially hot: In March alone Axonious raised $100 million in funding while Aqua Security raised $135 million, Orca Security raised $210 million, and Snyk raised $300 million in financing.
“Our relentless focus on the experience of the 2.2 million developers building applications of all kinds securely with Snyk has resulted in our success to date, and we believe there is an exponential, generational opportunity still in front of us,” said Snyk CEO Peter McKay at the time of the investment.
Another indicator of the value of IT startups is how many are acquired by bigger, more established IT vendors who add the startups’ ground-breaking technology to their own product portfolios.
In May, for example, Cisco Systems struck a deal to buy Socio Labs with a plan to use the startup’s events technology to enhance Cisco’s WebEx services. In June Hewlett Packard Enterprise bought Determined AI with an eye toward leveraging the artificial intelligence startup’s technology to boost its own high-performance computing and machine learning offerings.
Acquisitions of startups in the cybersecurity space have been especially frequent this year. Fortinet acquired cloud and network security startup ShieldX in March, Zscaler bought deception technology startup Smokescreen in May and Microsoft acquired IoT security startup ReFirm Labs in June. The price tags hint at the value of these startups: JFrog paid $300 million in June to buy security startup Vdoo while Rapid7 just acquired security startup IntSights for $335 million.
Startups have traditionally focused on selling directly to a limited number of customers, not turning to the channel until they are well-along in expanding their sales efforts. But startups today are turning to the channel earlier, recognizing that solution providers can introduce a startup and its products to their customers and devise real-world solutions around a startup’s leading-edge technology.
Starburst, a Boston-based startup developing big data analytics software, launched its Starburst Orbit channel program in late 2020 to recruit and support systems integrator, reseller and consulting partners. “We want to build a partner-first and ecosystem-centric company [and] embed it into our culture early on and into our go-to-market approach,” said Harrison Johnson, head of partnerships at Starburst, in an interview with CRN.
Just this week Morpheus Data, a startup provider of cloud application management and orchestration tools that is on this year’s Emerging Vendors list, said it plans to spend about $2 million in new channel investment – including market development funds and partner training incentives – with the aim of accelerating indirect channel revenue this year.
This year’s Emerging Vendors roundup is presented in a series of slide shows according to technology category including Big Data, Cloud, Data Center, Internet of Things, Networking and Collaboration, Security and Storage. The complete Emerging Vendors 2021 list can also be found here.