Jackal & The Data Endgame
Why Decentralized Data Storage Will Win.
Data makes the world go round.
The data storage industry is projected to cross the $777,000,000,000 mark in 2030 - a CAGR of 17.8%. In 2023, this market was worth ~$186B. This is a brutally competitive vertical that has largely been run by centralized data storage providers competing on price, redundancy, security, and latency. This vertical was drastically accelerated by the COVID-19 pandemic which accelerated digital transformation of organizations.
Data storage is a systematic method of archiving and preserving digital information, ensuring its accessibility and security for future use. Storage is typically defined into multiple mediums such as direct attached storage, storage area network, network attached storage, and software define storage- all of which service various formats (text, images, videos).
This data is key for companies managing customer information, operational metrics, financial transactions, e-commerce, healthcare, and manufacturing information (just to scratch the service). The rapid growth of IoT devices into everyday consumer and small business behavior puts data at the forefront of nearly all of our daily use cases.
However, the transition has not been without pain. During the necessary transition to cloud storage, massive costs have been incurred causing a notable number of companies attempting to re-manage their cloud costs using on premise storage. “…Better to own than rent…” when rent becomes unaffordable for large scale enterprises.
As David Hansson said: “Meanwhile Amazon in particular is printing profits renting out servers at obscene margins. AWS' profit margin is almost 30% ($18.5b in profits on $62.2B in revenue), despite huge investments in future capacity and new services. This margin is bound to soar now that "the firm said it plans to extend the useful life of its servers from four years to five, and its networking equipment from five years to six in the future."
Some other key long term variables emerging in the cloud sector are:
Carbon-Neutral Data Storage (increasing concerns about environmental impact of the every growing amount of data)
AI x Data Storage interactions (…more and more AI interactions with every growing data sets. Think about the costs & needs that are involved with this over time…)
Software-Define All-Flash Storage (…the era of the disk is potentially starting to slowly come to a close / having to compete with alternatives…)
Shockingly, more than 50% of enterprise IT organizations are managing at least 5 PB of data today and 73% are spending more than 30% of their IT budget on data storage, backups and disaster recovery. 94% of IT leaders report their cloud storage costs are rising and 54% confirm their storage spend is growing faster than overall cloud costs: (Source: Virtana State of Hybrid Cloud Storage 2022). Nearly 30% of cloud spend is wasted and this year, cost savings overtook security as the top enterprise cloud challenge. (Source: Flexera, 2023 State of the Cloud).
So, let’s think about this for a moment:
Data is growing
Businesses are concerned about data storage costs
Entrenched actors like AWS are looking to expand margins & are pushing out customers
A large % of IT budgets are tied to data & recovery
Like a slowly building pressure, this is a recipe for technology disruption.
Enter decentralized data storage.
Enter Jackal.
Anywhere, anytime.
Fast.
Cheap.
Jackal is checking all the boxes of what it takes to create a serious disruption. They are checking multiple boxes of consumer demand:
Open source
Significantly cheaper than competitors
Data redundancy / security
A growing community of developers
To add to the check box of things in favor of Jackal is an incredibly strong founder team with Marston Connell (Jackal Labs CTO) and Patrick Dunlop (Jackal Labs CEO) who have been building flat out through the duration of the bear market. One of the costs that these two founders have lazered in on is the cost of “Data Egress” - hidden charges typically incurred whenever data is transferred from a cloud service.
“For example, say you would like to download or transfer about 25 TBs of your files to your location, a friend, or a client. To do this, you are typically charged over $2,000 in fees you may not be aware of when using legacy cloud providers such as AWS, Microsoft Azure, or Google Cloud. When using the Jackal Cloud, data transfer is free, and users get to save over $2,000.” [source]
The primary question remains - can Jackal bridge back to everyday Web2 consumers in desperate need of cheaper storage? This is an opportunity to side step the noise of Web3 and scale protocol adoption through demand that is uncorrelated to Web3 liquidity. While one off individual consumers are potential targets, if Jackal can begin to lock down large Web2 enterprises & businesses as customers, the opportunity for Jackal to take a cut of that $777B market is no longer a pipedream but a potential impending reality. Jackal is already starting to target & acknowledge 40+ different use cases / target markets for its technology to impact.
Web3 is full of noise - but of the many verticals I’ve examined over the years, I continue to be excited about Web3 projects that straddle Web2 consumers and can outcompete them with better incentive mechanism design & simply better technology. There is no telling how far Jackal will go, but one thing I am certain of:
Data is growing.
Data storage is here to stay.
Who will disrupt it?
-Carter Woetzel