Why Salesforce.com, Microsoft and EMC are great targets for opportunistic startups

New startups are popping up all the time, some outstanding, some questionable and others downright average. On this week’s Structure Show podcast, Greylock Partners partner and former VMware(s vmw) cloud executive Jerry Chen stopped by to talk about where the smart ones should be investing their energies — or at least where firms like his want to put their money.

Here are the highlights from our wide-ranging interview, but you’ll want to listen to all 23 minutes for the whole story. Jerry has seen a lot in the enterprise tech space and has a lot to say about where it’s headed.

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Getting a small piece of a huge storage market

There is a lot of investment in the enterprise storage space, flash especially, Chen acknowledged, but that’s because it’s such a big, lucrative market. When you start a company in the space, you’re taking on multi-billion-dollar incumbents like EMC(s emc) and NetApp(s ntap), so taking even a small piece of their revenue means taking a lot of money.

“A lot of guys are gonna break their axe against this mountain, but two or three — and we hope Pure [Storage] is going to be one of them — will break through and do really, really well,” Chen said. (Pure Storage is a Greylock investment.)

Capitalizing on Salesforce’s vulnerabilities

If Salesforce.com(s crm) is vulnerable in two areas, it’s the native mobile experience and analytics, Chen said. That’s why we’re seeing so much investment in the next-generation marketing and CRM space right now, because companies are trying to strike while those areas are hot and Salesforce.com still hasn’t solidified its plays.

“Marc Benioff … has created the category-defining SaaS company, but not only that. He’s just got this uncanny knack to always talk to investors and customers about what’s around the corner,” Chen said. But, he added, “The reality is there’s the vision, and the product has to catch up with it.”

Jerry Chen. Source: Greylock Partners

Jerry Chen. Source: Greylock Partners

Office apps: A $10 billion business that’s “long in the tooth”

Mobile could help someone disrupt the collaboration and productivity market too, Chen noted. He thinks Google(s goog) Apps was a great first step, but the fact that it’s a collection of web-first services means it’s not perfectly suited for the mobile workforce. This is why Greylock has invested in Quip.

The killer solution could be figuring out how to manage the deluge of emails, text messages and internal social messages that employees receive. They need to see the right stuff and ignore the messages that don’t matter as much.

“Email has always been the bane of everyone’s existence and now text messaging, especially for the new generation of workers, is the new inbox,” he said.

Disrupting Amazon in the cloud is easier said than done

When it comes to cloud computing though — especially at the infrastructure level — Chen seems to think the market is really Amazon Web Services’ to define. Really, only Microsoft and Google have the scale to compete with AWS in the commodity public cloud, he explained, which means the opportunity for companies like VMware and IBM is in the enterprise space.

He sees three options for how this plays out. One is that AWS invests enough in making its platform “enterprise-grade” that it wins those workloads. Another is that someone else actually does win that space, either by investing enough or by making smart partnerships.

The third option, (which I think is the most disruptive in the long term, and will ultimately become less of an issue), is that Amazon(s amzn) decides it’s just going to own the future and train developers to work around its shortcomings. As everyone else fights over hybrid cloud and retrofitting clouds to fit legacy applications, Chen thinks Amazon might decide in the end to let them punch themselves tired trying to win the past. (I spoke with Amazon CTO Werner Vogels about this topic at last year’s re:Invent conference.)

“I think they’re waiting for the world to move more in their model than the other way around,” he said. “I think they’re fine letting Microsoft(s msft) and VMware fight over [legacy applications] and say ‘Hey, that’s great. We’re gonna take all these net-new workloads. That’s where all the growth is anyway and that’s a lot more fun.'”

Feature image courtesy of Shutterstock user Sashkin.