The Overlooked Opportunities Hidden in the Mainframe
We did the impossible and the unlikely. Venture capital players are all about the newest and most innovative technologies and market opportunities. They rarely consider plays in mature markets – and mainframe technology has long been seen as a mature market; some would have even said a dying market.
We saw things differently and birthed a technology that gives mainframe organizations the power to engage cloud and to build on their institutional strength and proven mainframe technology while engaging with the most advanced cloud capabilities and ultra-agile business practices.
Customers were thirsty for this kind of innovation and we knew we had to move fast if we were going to compete with incumbent giants such as IBM, EMC, Broadcom/CA, and Oracle. The answer had to be venture capital to give us the ability to scale quickly, achieve market penetration, and become the go-to solution for a global base of potential enterprise customers.
Venture capital has been as important as invention and scientific breakthroughs. It gave birth to most of the computer industry (other than IBM), and gave us innumerable consumer brands such as Waze, Mobileye, Uber, and even the emergence of autonomous cars. VCs are special people – many are veterans of startups that know about ramping up, know about market windows, and know that the ability to scale is a matter of life and death in tech markets.
It wasn’t easy for the Model9 founders. We could see eyes roll a bit when we explained that we were tackling the mainframe market. But once we got folks to understand it’s a huge opportunity and that we really have the power to unlock much of the world’s corporate data, the power to put data owners back in control and break a lock on data that sometimes spanned generations, and the power to bring cloud capabilities to the needs of the enterprise – they started to listen and listen closely.
And, like other’s that have won the nod from VCs, we demonstrated that we had the team, the experts and the drive, to take a modest startup and its innovative technology, and use it to transform the huge enterprise computing market.
We also had to clarify how we differed from a wide spectrum of VC-backed storage and data management companies that are transforming industries (WekaIO, VAST, Pure, Cohesity…), but none touch the mainframe, despite its great importance and central role in the enterprise market and world economics in general. Could it be, they wondered, that we were the first to crack open a market long monopolized by a few big players? Were we really doing something that unique?
Yes, we were – and they saw the light.
The lesson in all this may be that opportunities can be right in front of you and still be overlooked. The mainframe world can seem arcane, closed, and unfamiliar to most who have grown up in the PC/Server/Web/device era. But it remains an arena of action, absorbing billions of dollars in spending each year and contributing directly to trillions of dollars in economic activity.
And, surprisingly, it is a green field for innovation and VC investing. It has been a long time since this corner of IT was viewed seriously as a field for VC investment but it is finally being viewed not as IT “island” but, much more accurately, as a “supercontinent,” waiting to be fully integrated and optimized with the rest of our dynamic, information-rich and connected society.
For VCs this should spell opportunity, but many of them and nearly all of the players in the startup world, have grown up and profited entirely within the non-mainframe world. We got lots of those blank stares when we started out, until our persistence led us to Intel Capital, StageOne Ventures, North First Ventures and GlenRock, who grasped the importance of the mainframe market and saw our potential — and we’re grateful that they have.
We hope more venture firms will follow them to this land of opportunity.