The Transformation of NetApp

There may be some of you who (like me) essentially “wrote off” NetApp as being one of those companies that stopped innovating and will slowly “go by the wayside”. This is easy to do when all you hear about is “the hot new thing” from “the hot new startup” (which for some time, wasn’t NetApp). Just like fashion, “what was once old is now new again” (thanks to a tweak here and there + new sales and branding). That being said, the “NetApp of Old” has done far more than “put lipstick on a pig” and add new marketing. After learning more, I’m impressed. So for all of you who, like me, thought NetApp “wasn’t cool”, after reading this, you might want to consider sliding their token back over into the cool square. Here’s why…

The NetApp of Old

Whether you are a follower of the storage market or a typical storage admin, you know that NetApp went through some struggles. Flash storage prices came down and, for some time, NetApp didn’t have a strong flash storage offering. The result was that companies like Pure Storage and Solidfire seemed to leapfrog NetApp when it came to being a leader in the market. Chris Evans covers these struggles in his SFD9 NetApp Preview blog post. He talks about their 20 year history of innovation and how that innovation waned as they tried to integrate acquired products into their lineup. Justin Warren also provides impressive financial analysis of NetApp in his post on SFD9:NetApp, covering how NetApp hasn’t showed as much profitability as hoped, as of late, due to reinvestment in R&D and increased sales and marketing.
So what is the future of NetApp? Can they transform their company and products and be seen as a leading innovator in storage again? Or will they be overrun by the cutting edge storage startups and hyperconvergence solutions of the future?

The NetApp of New

exploring 10 year trendsI watched NetApp Founder Dave Hitz present at Storage Field Day 9 (in the video below) and found his presentation to be enlightening, not just about NetApp but on the technology industry as a whole. His presentation was entitled “Predicting the future” (something he said that he can’t do, to be clear) and the most important point that I took away from it is that “we” need to be looking for 10+ year technology trends. This was highlighted by my colleague, James Green, in his post on Exploring 10 Year Trends.
This is true as consumers and analysts – but especially if you are running a storage company, like NetApp. Dave offered a number of examples but the one that resonated most with me was the move to server virtualization- which has taken 10+ years. VMware jumped on that decade plus technology trend and has built their business around it (making billions in the process). So what are the hot storage tech trends that NetApp needs to be jumping into?

The obvious WRONG answer is traditional spinning disk. However, that also doesn’t mean that enterprises are throwing their spinning disk out the window either. If you look at the technology adoption lifecycle diagram (below), all-flash storage adoption is still in the “early adopters” phase, especially if you are talking about datacenter-wide. Only a small percentage of companies have installed all flash arrays in the datacenter and they are only doing it for specific core applications. Undoubtedly flash storage adoption WILL cross the chasm but it will take time. Most companies, when purchasing new arrays, are still going withy hybrid flash arrays because of the price/performance tradeoff (this was evident in the ActualTechMedia 2016 State of Storage in Virtualization Survey that we conducted where only 3% of respondents were currently using an all-flash array, in any form, where 2/3 of respondents use hybrid storage systems).
Technology Adoption Lifecycle Chasm
Like the rings of a tree, the adoption of all-flash storage is going to start in the middle, at the core of the datacenter and, over time, move out. The trend of moving from all spinning disk to all flash storage is one of those “10 year trends” and a trend that NetApp is heavily investing in with 3 different flash storage products (including the new addition of Solidfire).
Bridging the Cloud GapThe second 10 year trend that NetApp is investing in is hybrid cloud storage. As my colleague, Scott Lowe covered in his post on Bridging the Cloud Gap, companies are readily moving “compute” to the public cloud but NOT their data. The public cloud is great for data if it’s for short term test/dev, for example but, in many cases (and for a variety of reasons) not long term storage of critical company data – especially rapidly growing data (of which most company’s critical data is).
What companies need is the ability to move data to the cloud, near the cloud, and back on premises, whenever their business demands require (when we say “hybrid cloud storage”, this is the most important aspect).
With Netapp’s Cloud ONTAP and NetApp Private Storage options, NetApp has the ability TODAY to give companies that storage agility and portability that they need.

Can NetApp Transform?

solidfire arrayNetApp’s new CEO, George Curian, is moving the company to point where they can survive the ups and downs of the technology and financial markets while investing, and capitalizing, on the strongest long-term storage trends. For storage, the hot technology trends are dramatically faster (thanks to flash), more scalable, more programmable, more software-defined storage solutions – especially those that that are “cloud friendly”.
With their innovative E-Series Flash product, their all-flash FAS, their Solidfire flash product line, their focus on offering numerous cloud storage solutions, their increased R&D, increased sales/marketing, and their new vision – NetApp, by all accounts, seems to be transforming once again into a growing enterprise storage leader.
BTW – Great presentation Dave Hitz!

Lego graphic thanks to