The time I called it really wrong

CRN’s Joe Kovar published an article today about Seagate’s EVault cloud storage business joining OpenStack. That reminded me of a story…

In 1998, I ran a solutions provider business out of Benicia, California that was just beginning to focus exclusively on Citrix technologies. One day, a white-haired gentleman in his 50’s named Phil Gilmour walked into our shop armed with an extensive list of products he wanted to purchase for his new venture.

Phil had recently acquired some backup software out of Canada. He told me about his vision of going around to the local banks and backing them up through the Internet. Phil’s previous experience consisted of running his CPA practice for the past 25 years. It didn’t seem to me that he knew much about banks – and he certainly knew very little about technology.

So I’m thinking to myself that this is a nice older guy who has the best of intentions, but that he wouldn’t stand a chance in our cutthroat industry. I gave him maybe four months until he gave up either from lack of sales or from overwhelming technical frustrations or both.

“Look,” I said. “There’s no reason to buy so much equipment up front. Why don’t you start small and then you can always acquire more products as the business warrants.”

Phil followed my advice. He scaled back his purchase and went on his way.

The company Phil started was called, of course, EVault. Within six years it had become one of the fastest-growing technology companies in North America. Phil sold the business in 2007 to Seagate for $185M.

As Joe’s article reveals, Phil’s venture is still going strong though he has long since moved onto other things. And while I’ve frequently overestimated the potential of various firms during my many years as a student of business, EVault is certainly my biggest underestimate ever.

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