Steve Duplessie, founder of Enterprise Storage Group (ESG), wrote a scathing negative post about why he’s bearish on Fusion-io.

Steve Duplessie is a smart and respected entrepreneur who has built a great business off of a storage-centric consulting practice circa 1999.  When I read his post I fell off my chair and said “wow he’s so out of touch with reality” with regard to Fusion-io.  I had to keep reading; kind like watching a train wreck happen.

Duplessie is Angry with Fusion-io

What caught my attention about Duplessie’s post was the timing of the article, the nature of his “obtuse” angle, lack of informed data, and the overall “holier than thou” position in casting his “summary judgment on Fusion-io.

Steve Duplessie discloses his intention behind the post against Fusion-io.  They didn’t kiss the ESG ring.

Steve says:

“Data Domain was the rock star of the valley the same way Fusion is at this time…the people at Data Domain were cocky, but they were also smart: they talked to me at ESG (he means they paid ESG to do research).  They didn’t think they knew it all, just the important stuff. They were right. I know firsthand that they sought and received value from those external strategy engagements. I know it made them money and accelerated success and I know that it helped them avoid mistakes they may have made. I also know they will be the first to admit it. (Do you see how I linked myself to their success? That was smooth.) Fusion doesn’t talk to anyone as far as I can tell, which means they know it all. That’s stupid.”

Steve’s entire argument is Fusion-io will fail because they don’t engage ESG.   Fusion-io talked to SiliconANGLE.tv at VMworld inside theCube (see video) and more recently at SNW when I had a chance to talk to their chief scientist Steve Wozniak, cofounder of Apple Computer. He then when on to address the entire audience. Not only is Fusion-io talking to people but I know for a fact that they’re listening to people including customers like Facebook, analysts in industry and on Wall Street; and other industry insiders. These guys are focused and committed to winning in the marketplace.

What’s worse is Duplessie doesn’t get Fusion-io.  Fusion-io isn’t a storage company. It’s a systems company with a new architecture that is largely software driven.  I actually feel bad for Duplessie in how he can miss something this big in this market. The Fusion-io story is classic Silicon Valley where the little guys can enter the market with intellectual property and win the day.

It’s important to note that Duplessie knows that Fusion-io is in a quiet period in preparation of their IPO and can’t respond to this “scud missile” he’s lobbing.

David Floyer of Wikibon responds to Duplessie.

Here are the two Fusion-io posts side by side:

Steve Duplessie of ESG:  Why I’m Bearish On Fusion-io versus David Floyer of Wikibon:  What Storage Folks do not get about Fusion-io

If you want to skip to the definitive post on the merits of Fusion-io just go to this link by David Floyer of Wikibon.  There you will see the logic and thus an answer to the “haymaker” thrown by Duplessie.  Floyer wins the argument in a stunning KO by positing that you need to take a systems view to understand what Fusion-io is trying to accomplish. Floyer skewers the five-decade-old spinning disk storage model as arcane and outdated and paints a picture of why Fusion-io, the company which invented the model, will be more, not less valuable over time.

What makes a storage industry analyst launch a series of haymakers and scud missiles on what is an obvious darling of a startup in Fusion-io.  The Elephant in the room?  What’s going on here?

To understand the big picture on Fusion-io read my  response to the Wall Street Journal that calibrated the misinformation on Fusion-io.  Fusion-io is one of those companies at the center of the disruption in mobile, cloud, and social.  Look at success of Apple, Facebook, Twitter, and Hadoop/Cloudera.  These are companies that are changing the world.  What some people don’t understand is that this is innovation similar to the PC then client-server revolution, which went on to displace big market incumbents.  Those startups back then were Intel, Microsoft, Apple, 3Com, Cisco, Oracle, among others.

Bottom line

If you’re in the storage business, cloud business, mobile business, or anything Internet infrastructure (hello convergence) this conversation is important.  The Fusion-io story is hot because it’s innovative.   Other companies are out there pushing innovation companies such as Cloudera, Karmasphere, Greenplum/Isilon (now EMC), 3PAR (now HP), and even Data Domain (EMC).

Look at the growth SSD alone has created.  Storage has changed from spindles and discs to flash and software.  Just look at how the iPod evolved.  Flash was the key technology that has enabled the iPod to change the consumer experience.  Flash enabled the massive “sea change” in the iPhone, iPad, and other disruptive social and mobile innovations including Facebook and mobile apps.

Steve Duplessie’s post demonstrates that there is a changing of the guard. He’s out of touch on this one—evidently because Fusion-io doesn’t ‘talk’ to him. But part of the job of an analyst is to dig and do homework. Let’s face it – if Fusion-io were paying Duplessie this post never would have been written. In my view he doesn’t get it. You can’t just strong-arm a company today like this; especially with a weak argument. He is basically saying Steve Jobs, Apple, and Facebook are fads.  Old school storage-centric guys like Duplessie are destined to become dinosaurs if they don’t wake up. The name of the game now is about system software.  Look no further than Apple and Facebook.  All the classic storage technologies are gone from the equation. No EMC. No NetApp. Yes flash. Yes white box storage.

A new market is being set and all the current leaders are at risk by upstarts like Fusion-io.  Like Intel, Microsoft, and Apple before it Fusion-io and the new guard of technology leaders developing leading system software will disrupt the market’s pecking order.

A new force is marching forward and innovating their way to market leadership. The question is, which side do you bet on – innovation or status quo?

I know which horse I’m backing in this race.