Is NetApp Doomed?

I recently met with a storage architect friend of mine who happens to be a NetApp competitor and had a good discussion about the future of NetApp.  He made a case that the best days of NetApp are behind it, that they had a good run, but got bogged down in this “one platform to rule them all” idea and ultimately lost their edge and–along with it–their future.  The press and the street hasn’t exactly been kind to NetApp over the past few years either.  This got me to wonder, “Is NetApp Doomed?”

My Perspective

I bring a perspective you may not find anywhere else. I worked at NetApp for nearly 5 years (as proof, I spell and say “NetApp” without adding an “s”). I worked not in sales, but as a PS consultant. I took NetApp technology to its limits in many customers and I know where it excels above and beyond any other product and where it needs improvement. Since leaving, I’ve had a chance to experience the capabilities of a variety of competitive products, and I’ve gained additional insight from other vendors, customers and resellers to temper my biases.

It is hard not to be biased. NetApp has a great culture and it was one of the best places I’ve ever worked. This was due to a combination of passionate people, great vision, and excellent technology. Few companies could match the innovation potential of NetApp in early the early 2000s. There is something special about being a part of a company that knows it is bad-assed and has the technology to prove it.

Doom by Innovation?

One of the things I liked most about NetApp is also a reason for the lack-luster performance it has had over the last few years. NetApp was laser-focused on unified platforms and chose the path of innovation and integration. This led them down the path of integrating the Spinnaker scale-out NAS technology they acquired in 2003 rather than just keeping it a separate product for HPC (High-Performance-Computing).  They had a vision for a scale-out, unified storage platform and were dead-set on achieving it.

However, NetApp couldn’t just park ONTAP in the garage and go to work on it.  Sales depended on future ONTAP features.  Engineering was also able to learn a lot about ONTAP during the years of incremental innovation and had ideas for serious overhauls.  So, they took the approach of creating a brand new code-line and poured the technology of both ONTAP and SpinFS into it.  This bold step was a testament to NetApp’s culture of innovation. It would have been far easier to sprinkle some of the code-bits between the two product lines, update the slide-ware and do the heavy lifting in Sales instead of Engineering.

Meanwhile, customer’s were hungry for innovation, and NetApp was still eager to deliver.  So, innovation continued in the existing ONTAP code-line while C-Mode (Cluster-Mode) was being developed.  Every new ONTAP feature, however, needed to be re-coded in C-Mode.  And, as the features rolled-in, the timeline for C-Mode began to drag out.  It started to seem as if C-Mode would never arrive.  Eventually, NetApp had to pull the plug on legacy ONTAP R&D and focus the majority of efforts on the next generation code-line.  While NetApp used this “catch-up” period to bring C-Mode to feature parity with the legacy ONTAP, competitors received the window they needed to “catch-up” to ONTAP as well.

Go Big or Go Home

This wasn’t the first time NetApp has bet big.  In the early 2000’s as the tech bubble burst, NetApp lost nearly 2/3rds of its value in less than a year.  Rather than hunkering down and controlling costs, NetApp doubled-down on R&D for their radical dream of a a unified storage platform that could do both file and block.  In 2002 they released the FAS series whose success propelled them to 6 Billion dollar company they are today.

It is difficult to know for sure how the cards will fall for NetApp.  For the past several years they have been selling a vision in place of products.  With 8.1 and beyond, NetApp is finally closing in on feature parity with legacy ONTAP and delivering on the vision.  Early this year, as sort of a 10 year anniversary to the first unified FAS platform, NetApp overcame a huge obstacle to adoption and finally reintroduced FC back into ONTAP C-Mode.

Prospects

So, is NetApp doomed?  Is the vision of C-Mode too little, to late?  Have the competitors surpassed what NetApp is capable of?  I don’t think so.

I believe NetApp is just turning a corner.  The vision they had in 2003 was spot-on and is still what customers desperately need.  A flexible, scalable, non-stop storage platform that evolves along with the business.  This vision is extremely powerful.  If they can leverage the cluster infrastructure to boost availability to 6’9s, there won’t be a storage system on a datacenter floor–NAS, Unified, High-End, Scale-out or otherwise–they couldn’t make a case for absorbing.  Once on the floor, they would have remarkable staying power as customers opt to take advantage of NetApp’s non-disruptive hardware refresh and data mobility capabilities rather than pay the labor cost and take the downtime to migrate to competing platforms.

Most promising is the fact that the code-lines are now fully converged and “catch-up” is almost complete.  With all of NetApp’s R&D talent focused on the future instead of the past, NetApp is prime to return to the innovation power-house it was in the early 2000’s.  I think NetApp will have a bright future, indeed, and I look forward to see what they can accomplish in 8.2 and beyond.

3 comments to Is NetApp Doomed?

  • Cesar Orosco

    Mike,

    Great article, thanks for the insight -much appreciated it.

    Cesar

  • Clay

    I think your perspective is spot on! The goal isn’t to have the biggest and most available subsystem, but instead the most salable and functional data delivery solution. That solution must be able to meet the I/O demands of any given environment, be self healing, and self protecting. NetApp, as well as some of their competition, has understood this for a considerable time and are simply doing their best to achieve that state of nirvana with their respective technologies in spite of the desperate need to produce profitable products along the way.

  • Marilyn

    I respect your insight- so what do you think NetApp’s future is now?

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