The economic devastation of the global COVID-19 pandemic has many businesses fighting for survival, but dealing with chaos and uncertainty comes with the territory for a certain category of business: Startups.\nThey thrive on disruption (or at least that\u2019s the message they pitch to investors), but is the lean, move-fast-and-break-things model one that can survive global disruptions?\nUnlike retail, travel, and tourism that have been hammered by the downturn, data-center and networking businesses have fared better, with some such as teleconferencing seeing spikes in demand.\nOther networking sectors, however, haven\u2019t done as well. Recent data from Synergy Research Group finds that the Ethernet switch and router markets fell to a seven-year low in Q1 2020. Meanwhile, several incumbents, including HP, IBM, and Dell, have announced layoffs, restructuring, and\/or hiring freezes.\nIn contrast, for operationally lean startups unencumbered by legacy support constraints, networking startups have some advantages. As virtualization of everything has accelerated during pandemic quarantine, networking and data-center startups find themselves positioned in fast-growth market niches and discovering more opportunities, less competition, and an abundance of available talent.\nAnd a little luck never hurts.\nTiming and cash matter\nThe timing of investments can be critical to startups that are always running on tight budgets, and for NGD Systems that timing couldn\u2019t have been better. The NVMe storage startup closed a $20 million Series C round in February. \u201cWe were extremely fortunate,\u201d said Nader Salessi, NGD Systems\u2019 CEO and Chairman. \u201cNo one could have foreseen this, but this new funding is the fuel we\u2019ll need to get through this crisis.\u201d (See our profile of NGD Systems in \u201c10 hot HCI startups to watch.\u201d)\nWith a little breathing room, NGD Systems has been able to transition most of its workforce to telecommuting without any major interruptions. \u201cLike everyone else, we\u2019re learning how to adapt as we go, whether that\u2019s replacing physical meetings with virtual ones, or watching webinars rather than attending conferences,\u201d Salessi said. \u201cNow, even though we still have a few employees who must physically come into the office or the lab, 90% of our team is working from home without any major impact to day-to-day operations.\u201d\u00a0\nMark Fernandes, Managing Director of Sierra Ventures, says the current downturn reminds him of the dotcom and housing-crisis recessions. \u201cThose were great times to fund startups,\u201d he said. \u201cInvestors probably saw 50% greater returns in \u201909 than in the next few years.\u201d\nThe reasons are simple, he said. Recession-born startups select for certain types of risk takers, the ones who don\u2019t shy away from adversity and who thrive in emerging markets. If those risk takers attract capital, they then don\u2019t have to hunt far and wide for top-tier talent.\n\u201cIn recessions, new companies start with the right mindset,\u201d Fernandes said. \u201cThey\u2019re leaner, more entrepreneurial, and they have the flexibility needed to jump on new opportunities.\u201d Fernandes sees several sectors exploding right now, including telehealth, video conferencing, e-commerce, and cloud computing.\nIn the early weeks of the pandemic, as governors initiated stay-at-home mandates, Sierra Ventures paused to triage its portfolio, zeroing in on those companies that would need an immediate cash infusion to get through the year. \u201cThe cash-management plan quickly became the operating plan,\u201d Fernandes said.\nBut after that short pause, the firm got back to investing in early stage startups. Investors know that if they get too cautious in times of crisis, less risk-averse competitors will pluck deals away from them. \u201cWe\u2019ve made eight investments since the first of February,\u201d Fernandes said. \u201cFour of those were with entrepreneurs already in our pipeline, but the other four deals were new ones that we handled entirely remotely.\u201d\u00a0\nTurning on data centers\nWith everything from daily stand-up meetings to doctor\u2019s appointments to grocery shopping moving online, the surging demand placed on infrastructure goes much deeper than the network layer, all the way down to the data centers that house the infrastructure that makes virtual work possible.\nData-center providers want to add more capacity, but those trying to accelerate their deployments are smashing into an obstacle: commissioning.\nData-center commissioning, a physical process that can\u2019t be accomplished in the traditional way because of social distancing mandates, is the final step before a new data center can be brought online. The commissioning process tests everything from electrical systems and backup generators to switches and backhaul. It typically involves a large on-site team crammed into tight spots throughout the data center to conduct tests, monitor equipment, and gather data.\n\u00a0\u201cNone of this is possible right now,\u201d said Nancy Novak, Chief Innovation Officer for Compass Datacenters, a startup founded in 2011 that has built more than $4 billion worth of data centers around the globe. \u201cThe experts who do this often have to travel by plane to the site, and even with some flights resuming, many key people are in self-isolation or quarantine, so getting them all on-site at once isn\u2019t possible.\u201d\nWithout commissioning, however, the data centers can\u2019t be put to use, and if they can\u2019t be put to use, those sunk costs quickly transform from good investments to financial anchors.\nTo clear these hurdles, Novak and her team came up with a new process of \u201cvirtual commissioning.\u201d Relying on only a handful of socially distanced people on-site, they figured out a way to manage the 133 steps of the commissioning process with an array of gadgets, sensors, and cameras that feed information over the Internet to team members who manage the process remotely from their home offices.\nThis process has been used to commission a facility in Raleigh, N.C., and has proved so effective that the company plans to continue using it even after social distancing is no longer necessary.\nEvery day is Black Friday\nWebscale, a startup that provides cloud infrastructure for e-commerce, is in the fortunate position of seeing a surge in interest because of the pandemic. \u201cE-commerce is booming,\u201d said Sonal Puri, CEO of Webscale. \u201cHalf of our customers tell us they are having Black Friday-scale events pretty much every day.\u201d(See our recent profile of Webscale as one of \u201c10 hot business continuity startups to watch.\u201d)\nThis is a good problem for them to have \u2013 if they can meet the demand.\nBusinesses like Webscale and their e-commerce clients prepare all year for Black Friday, the day after Thanksgiving and the biggest shopping day of the year. But the widespread quarantining hit without warning, stressing e-commerce infrastructure in ways few could have predicted.\n\u201cThis crisis created unplanned availability, scalability, and security demands. We never fully tested the capabilities of our infrastructure until now,\u201d Puri said.