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The traditional view of storage is changing

By Lee Johns, Director Converged Storage, @StorageOlogist

 

Sometimes a competitor makes statements you just feel compelled to comment on.  This time I am referring to Tom Georgens of NetApp and the Dow Jones article “NetApp CEO Says Server Cos ‘losing Ground’ in Storage Market.” Dated 6/30/2011.

 

Clearly NetApp has been doing well recently.  There is no dispute there. However Tom Georgens asserts that there is an inexorable move toward dedicated storage vendors and away from as he calls them “Big Tech Companies”.  He then also goes on to say that in storage NetApp is outperforming EMC Corp “If you discount their Data domain backup and recovery business”.

 

Here is the problem with the statements

Georgens is defining the market by NetApp’s focus and not what customers buy.  Discounting Data Domain is not real world.  Fact is EMC has Data Domain and NetApp does not.  When it comes to HP and IBM you just have to look at the growth of each company over the last few years.  For HP in 2009 revenue was $115 billion and in 2010 it was $126.3 billion.  That $10 billion in growth is over twice the total size of NetApp today and we did it in a single year.  During that time our enterprise business growth has also been impressive.

 

The crux of the matter
Georgens says that customers prefer to buy “best of breed” “ and server companies  are “not the best of breed at anything”.   I assume he is referring to HP although we are not a server company. That is pretty interesting.  How did we sell $126 billion dollars worth of Tech equipment and services in 2010 if that is not what customers want and we don’t deliver?

 

A view from the zoo
Now as folks may know by now, I am a zoologist and I find many parallels between biological ecosystems  and technical markets.  Here is what I know about best of breed:

 

 

  • What works for one era is not necessarily going to work in the next because the climate changes.
  • The purest and most specialized breeds are those that lose out when the climate changes. 
  • As Darwin said :  “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”

IT over the last few years has been defined by a lot of integration work to deliver applications and services.  The problem is in today’s dynamic markets that model will not hold for the next phase of IT where organizations are looking at eliminating the boundaries between server, storage and networking and crossing geographic boundaries to build a more agile IT infrastructure that focuses on everything as a service. 

 

In order to address customer needs for the next generation, HP is focused on converged infrastructure and within that converged storage.  For a cool and simple explanation of Converged Storage see this video from my colleague Marc Farley:  

 

 

 or this overview by David Scott the Senior VP and General Manager of storage at HP. 

 

 
Times are a-changing and we got your back
HP is changing how you think of IT (and storage).  We are defining the next generation and evolving our products to address the new reality and that reality is one in which the traditional views of storage will change.

 

I think I just realized one thing HP is best of breed at.  Continually addressing long term customer needs through CHANGE!

Comments
Dave Vellante | ‎07-01-2011 12:12 AM

Hi Lee...I've been thinking about this b-o-b vs integrated stacks thing for a while. Your own Dave Scott used to be pretty vocal (as is Geogens) on this topic. The thing is...big companies are buying best of breed. EMC/Data Domain/Isilon, HP/3PAR, Dell/Compellent - these are good examples and there are others inside and outside of storage. 

 

The real issue for NetApp as I see it is expansion of the TAM...specifically growth relative to 2010. Georgens is making a classic growth play by acquiring/partnering for new capabilities. For example... Very recently, NetApp had a single OS - ONTAP and today it has ONTAP, Engenio, Bycast, Quantum StoreNext and I guess Simpana - that makes five. NetApp is small so it can go deeper into its vertical and still grow. Companies like EMC used to be able to do that (CLARiiON) then had to expand horizontally to grow - documentum, RSA, vmware...HP clearly has to expand out horizontally to grow (e.g. networking) - as does cisco (i.e. compute). 

 

The question for HP, IBM, EMC is do they sell appliances as point products in a portfolio approach, integrate stacks or both. VCE is clearly integrated as is HP's converged storage. Other products from both vendors are not - they're appliances in a portfolio. 

 

Clearly there's value in integration...sometimes it's just hard as clearly NetApp found with Spinnaker.

 

So it comes down imo to where a company is in its cycle and how it wants to spin the marketing. For NetApp it's all about how to position against the whales. For EMC it's how to leverage VMware to get to $100B in market value and for HP it's how to integrate as much as possible and be a one stop shop for customers, maximizing its account leverage, gaining share in higher margin businesses and increasing its valuation. 

Lee Johns | ‎07-01-2011 12:42 AM

Thanks for the thoughtful post Dave. I agree with you.  Georgens is taking a shot because we are the competition not because we are as he put it " becoming less relevant".  Our convergence strategy with HP leveraging investment across the company is something he definately did not want to see so he is taking the only position he can. 

 

We for our part will deliver both best of breed storage and superior converged solutions and we will see over time how it plays out.  

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25+ years experience around HP Storage. The go-to guy for news and views on all things storage..
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