I had a conversation last week with a PR company doing research for Netapp. This followed just after Netapp released their Q4 results, with revenue exceeding expectations at just over $1 billion. It’s amazing how in the space of less than 20 years they have developed from nothing to a company selling a single $4 billon product.
Lots of people will be quick to point out to me that Netapp sell lots of products. Well, yes they do and the majority of those relate to a single core product — Data ONTAP running on some kind of bespoke hardware. There are a few other bits and pieces out there — DataFort and SANScreen for example, but most software and hardware products still revolve around the core function of providing Networked Attached Storage.
Two thoughts intrigue me:
- Despite Netapp’s “reputation”, people still continue to buy from them. By “reputation” I mean, complexity and price — I won’t even mention the sales culture.
- Competition in the sector must surely mean that growth in the single NAS product can’t continue forever, when newer products that have been developed with the benefit of hindsight are available in the marketplace and those vendors become more established.
It’s the second of these points that probably concerns me most. Data ONTAP has some technical issues in performance and scalability. The time taken to develop Data ONTAP 8 has demonstrated that integrating new features into the existing code base is a time consuming and presumably expensive exercise. Netapp have no other product line to rely on and aren’t introducing new hardware/software as successors to the existing product line.
Compare Netapp to other vendors, specifically their arch-nemesis EMC. EMC have fundamentally re-invented storage array technology with the introduction of V-Max. Over the years they invested in technology other than their main Symmetrix range; CLARiiON, Centera, Celerra, Iomega, RecoverPoint are only a few that spring to mind. There are many more. The software portfolio of technology unrelated to Symmetrix is even greater. Netapp remain fixed on their core product platform and the Data ONTAP architecture, attempting to make one hardware device fit all flavours of storage.
Despite the apparent flaws in Netapp’s technology, customers continue to buy and that is reflected in continued growth. But surely it’s just a matter of time before their market share begins to erode. Perhaps rather than acquiring technology that further expands features of their current platform (like Data Domain) they should branch out and buy into technology in other areas by acquiring 3Par, Compellent or Pillar perhaps. Of course the only problem with following this direction is that it admits defeat in using the existing Data ONTAP platform as an all-protocol encompassing storage platform. When you’ve spend years criticising the competition, you’ve pretty much painted yourself into a corner that becomes very difficult to get out of.
