Autumn for big storage vendors

One of the unintended consequences of virtualization is that it frees the consumer from the lock in of the hardware manufacturer.  At first this was just a problem for the folks making servers as applications and hardware were migrated to the web for efficiencies of scale.  As time went on the virtualization of ecommerce payment, CRM, and small business accounting all proved that small business could compete in larger markets by streamlining the costs of IT and its associated staff.  The online companies that could provide these services used Virtual Machines built on high quality commodity hardware that they assembled themselves and deployed quickly. Now storage is moving to the same commoditized, highly competitive structure.

It often seems like a contradiction at first when I talk to folks about how market competition increases quality while reducing costs, but it is true. Over time profitable companies will seek to increase quality while reducing costs, because customers don’t like the hassles of shoddy quality.  For the manufacturer, the service call to repair something costs more than it would to build in quality, so successful companies build quality in as a way of reducing their costs of service. Their customers that do need a service call receive a better experience since the best service technicians are available to assist, instead of handling everyday failures which don’t happen in a quality product.

Recently I read an article in the Wall Street Journal about how reliable cars are today as compared to those built 20 years ago. This is partly due to technology within the vehicles, but it also has a lot to do with the CAD engineering tools and materials science that has been applied to the manufacturing process.  Cars are so reliable now that the Journal article points out that the dealers are using the recall process to bring customers back in to their showrooms. This points out that the automobile dealers and manufacturers have learned what service companies have know for a long time; quality service builds brand loyalty and brings back satisfied customers to your store.

Zerowait has grown into an international company because we have focused on building quality service relationships with our customers. Consumers can buy from numerous vendors on the Web, but over time they learn that buying a commodity product from the cheapest vendor on the web may not provide the best value.  As labor costs go up the value of the service vendor goes up because a good technician can debug a problem quickly and efficiently.

The big storage vendors are in for a difficult few years, because in order to maintain their high quality service engineers they need to sell highly marked up technology to their customers who are already buying commoditized hardware for their virtualized servers and using open source software solutions.  Low priced commodity storage solutions are becoming more available, so it will be very hard to compete at their current high price point level.  Will they be able to compete in a deflationary marketplace?

One of the unintended consequences of virtualization is that it frees the consumer from the lock in of the hardware manufacturer.  At first this was just a problem for the folks making servers as applications and hardware were migrated to the web for efficiencies of scale.  As time went on the virtualization of ecommerce payment, CRM, and small business accounting all proved that small business could compete in larger markets by streamlining the costs of IT and its associated staff.  The online companies that could provide these services used Virtual Machines built on high quality commodity hardware that they assembled themselves and deployed quickly. Now storage is moving to the same commoditized, highly competitive structure.

It often seems like a contradiction at first when I talk to folks about how market competition increases quality while reducing costs, but it is true. Over time profitable companies will seek to increase quality while reducing costs, because customers don’t like the hassles of shoddy quality.  For the manufacturer, the service call to repair something costs more than it would to build in quality, so successful companies build quality in as a way of reducing their costs of service. Their customers that do need a service call receive a better experience since the best service technicians are available to assist, instead of handling everyday failures which don’t happen in a quality product.

Recently I read an article in the Wall Street Journal about how reliable cars are today as compared to those built 20 years ago. This is partly due to technology within the vehicles, but it also has a lot to do with the CAD engineering tools and materials science that has been applied to the manufacturing process.  Cars are so reliable now that the Journal article points out that the dealers are using the recall process to bring customers back in to their showrooms. This points out that the automobile dealers and manufacturers have learned what service companies have know for a long time; quality service builds brand loyalty and brings back satisfied customers to your store.

Zerowait has grown into an international company because we have focused on building quality service relationships with our customers. Consumers can buy from numerous vendors on the Web, but over time they learn that buying a commodity product from the cheapest vendor on the web may not provide the best value.  As labor costs go up the value of the service vendor goes up because a good technician can debug a problem quickly and efficiently.

The big storage vendors are in for a difficult few years, because in order to maintain their high quality service engineers they need to sell highly marked up technology to their customers who are already buying commoditized hardware for their virtualized servers and using open source software solutions.  Low priced commodity storage solutions are becoming more available, so it will be very hard to compete at their current high price point level.  Will they be able to compete in a deflationary marketplace?

 

 

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Zerowait’s competitive pricing for Government IT procurement.

Zerowait has been in business for over 20 years, and in that time we have worked with many Federal, State, County and City government IT departments.  Since 2001, the growth in Government Storage requirements has been accelerating, and as this equipment gets older our NetApp government customers have asked us to provide support for more and bigger installations.  Interest in SimplStor by this sector has also blossomed. While many of these customers are able to purchase from us under simplified acquisition procedures, often we are asked if we have a Schedule 70 Contract or a vehicle to make things easier on the procurement folks.  We knew that for this task we would need an expert, and we found one:  Tim Reid, now Zerowait’s Director of Government Contracts.

Tim is a veteran, serving in the US Navy until 1992.  Afterward he began a career helping businesses obtain Government contracts.  Over the last decade Tim has helped small businesses win almost $150 million in Government contracts, and he appreciated how Zerowait specifically could help the government support their legacy storage equipment and migrate to newer platforms like our SimplStor. As a taxpayer, Tim further understood the value we could provide; and, as a specialist in government business development, he recognized the unique value Zerowait could provide in cutting their IT procurement costs.

With Tim’s guidance, Zerowait now has a U.S. Federal General Services Administration (GSA) Schedule 70 contract application in process, which when awarded will allow Zerowait to provide specialized goods and services to a broader segment of the governmental IT sector.  As Tim says, “We are looking forward to being able to answer ‘Yes’ when agency IT managers ask if we (Zerowait) have a GSA Schedule.  Being awarded the contract, and having earned the right to be a GSA schedule contractor, will make all the work getting to this point worth it.”  Over the last several months Tim has added to our capabilities and modified our processes to meet the stringent requirements of government contracting.

After two decades in business Zerowait now has a dedicated government contracts department and we are building a team of specialists to help agencies and organizations that need to maintain, expand, or migrate their data storage infrastructure while staying within strict budgetary constraints.  Zerowait can now offer service and support for legacy NetApp equipment and our SimplStor systems which can run Redhat, Solaris with ZFS or Microsoft Storage Server R2, providing government IT departments the same flexible and affordable systems and support that Zerowait offers our commercial customers.

 

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New information challenges established assumptions

NewcastleHarbour NSW Over the last couple of weeks I traveled to our Australian office and visited our clients in Sydney and Newcastle to discuss their storage issues and strategies for the next couple of years. Almost all of our clients were discussing the Cloud storage pricing war between Amazon, Google and Microsoft and trying to figure out how to take advantage of the cloud for archival storage within their storage tiers. 2 cents a TB per month for cloud storage changes the dynamics of archival storage.

Many of our clients in Australia need storage proximity so that they can take advantage of the bandwidth required to do their rendering or run complex algorithms for their modeling. The issue of storage proximity makes it hard to use the cloud providers for the majority of their storage requirements except as a replacement for archival tape. When the big cloud providers are offering a cost of 2 cents per TB per month the costs of a tape library, maintenance, licensing and offsite storage for archival data storage tapes is hard to justify when budgets are tight. And for this reason our clients are looking at moving archival tape assets to the cloud.

Moving archival information to the cloud inevitably leads to finding an integrated and affordable solution to simplify the transmission and retrieval from the cloud. At three meetings last week we discussed the integration of Microsoft’s Storage Server R2 and their Azure cloud as an integrated Hierarchical Storage Management (HSM) strategy instead of tape. Our clients wanted to know if Zerowait had a pathway that could help them migrate their data and storage from NetApp to a combination of NetApp for their tier one storage and a High Availability SimplStor for their Tier two storage that could move data back and forth to the cloud, and reduce their storage costs substantially.

Zerowait has a simple and affordable pathway to help our NetApp support customers slash their storage costs without affecting their storage availability. We can help our NetApp customers move their data to our SimplStor equipment running either Red Hat storage, Microsoft R2 or Solaris with ZFS, and if our clients want to move their archival data to one of the big cloud storage providers we can help our customers set up this service also. And finally when our customers old equipment is removed from service we will  help our customers sanitize their legacy disks and dispose of their old equipment. 

It seems that at 2 cents a TB per month, the big cloud guys have gotten the attention of the big storage users and now the question is how to create a 3 to 5 years storage strategy to take advantage of this technological change. With this easy to understand strategy, Zerowait is providing our customers with an affordable set of solutions to help them meet their future High Availability storage requirements.

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A Consensus is Building

This week we were at the National Association of Broadcasters show in Las Vegas meeting with our clients in the Media business. Our media clients are some of our largest storage users and while we initially supported their NetApp architectures, our SimplStor products now have a strong following in the VFX business. Over dinner one night with our clients we discussed the main issues facing big storage customers (which are really every storage customer’s issues), the price per TB of storage and the availability (or lack thereof) of bandwidth to take advantage of cloud storage providers who seem to be in a race to become the lowest cost provider. This article in Storage newsletter illustrates how price competitive cloud based providers are:

“The new pricing plans did not change the amount of free storage available but it lowered the entrance fee enough to make customers more willing to pay for the service. Before the change, 100GB could be purchased for $5/month, now it’s $2, the 1TB plan is at $10 (formerly $50) and you can now go up to 30TB for $300/month whereas the highest storage space available was 16TB before the change.”

http://www.storagenewsletter.com/rubriques/cloud-online-backup-ssps-msps/google-drive-re-kindles-price-war-between-cloud-storage-services/

The price war for cloud-based storage seems to have taken the traffic from the big storage providers’ booths and the NetApp booth did not have many people in it when we went by it. But neither did EMC, Hitachi or any other big storage provider.  Large storage customers are looking for affordability, and the big iron storage providers can’t provide affordable mass storage and remain profitable in part because of the costs of their large engineering and support staffs.

At NAB it became apparent that there is an emerging consensus that the high end storage only providers like NetApp are going to see some significant erosion of their markets by lower cost alternatives. The disruptive technologies of the 90’s are being disrupted themselves by commoditized high availability storage software. Going beyond Linux, the availability of Solaris ZFS and Microsoft Storage Server R2 on commodity based Cluster in a Box hardware is one way to cut the costs of storage. And our customers are interested in these solutions that can now be created and supported by a niche high availability storage company like Zerowait.

Our customers like our service and support model and the way we can provide a semi- custom solution for them at less than 50% of the cost of the big players in the marketplace. The internet and the ease of international shipping has created a global community of media storage users large enough to provide Zerowait sufficient customer base to profitably build and support these kinds of niche solutions. When people from around the world can easily work together to create affordable quality solutions everyone wins.

 

 

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A Bridge to the Future

boulder mountainsOver the last couple of weeks I have been visiting customers in Colorado and found that many of NetApp’s customers are distressed by the costs of upgrading to OnTap 8.2, which include new hardware (in many cases), training and data migration. Migrations are never easy, and with the corporate mantra these days being “doing more with less” finding spare cycles in an IT department to develop and document the migration plan, then schedule and implement it with limited staff is alienating many of NetApp’s customers.

The majority of IT departments don’t have the expertise to handle data migrations, and justifying another proprietary upgrade for storage hardware is at odds with management’s push to reduce costs (both capital and ongoing support) using open source and commoditized solutions. These customers, and many more, are yearning for an affordable storage solution for tomorrow and the next 5 years or more, and the media is beginning to notice.

Is this perception true? Possibly – and the IDC numbers and NetApp’s own recent results, with flat-lining revenues indicate that something is not quite right in Sunnyvale. The filer lion king is turning, just maybe, into a floppy old beast and needs to reinvigorate its carnivore approach to the storage business.

In a tough economy, storage administrators need a trusted advocate on their side to help bend the costs down and Zerowait has a set of alternative solutions to help customers whether they want to maintain their legacy NetApp infrastructure, migrate to an affordable and reliable open source solution, or migrate up to 8.2. In addition to providing long term legacy NetApp support, allowing you to capture the maximum ROI from your current NetApp investment, our engineering staff has the broad storage and network experience to provide assistance in data migrations, whether supplementing your staff or managing a turn key migration. And for those looking to contain costs by taking advantage of the open source  x86 environment, our SimplStor product line delivers highly reliable, affordable  storage with the enterprise support and auto notification limited IT staffs need to ensure availability.

Zerowait has support, migration, and alternative hardware solutions that will help you build a bridge to your Future data storage requirements.  www.zerowait.com

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A Storage Sweetener

Since NetApp’s introduction of OnTap 8.2 several months ago, Zerowait has been receiving a steadily increasing number of requests for staff augmentations and help in planning data migrations, often to more affordably priced storage arrays. Migrating mixed NFS and CIFS NAS volumes can be tricky. These migrations typically require a significant time investment and cost a princely sum when handled by the OEM of high-priced, first-tier storage. Zerowait has developed a recipe to sweeten the mix when customers want to refresh and augment their data storage infrastructure.

The upgrade to 8.2 OnTap is leaving a bitter taste in many customers’ mouths, and who’s to say that OnTap 8.3 will even have a “7-mode”? The upgrade involves training customers on Clustered OnTap, which contradicts NetApp’s messaging that customers would only need to learn OnTap once and never learn it again. The conversion is a lengthy process as all data needs to be copied from the 7-mode system to Clustered OnTap without any means for an in place upgrade. Regardless of OnTap mode, once a customer’s upgrade is complete, all of the customer’s licenses will be reissued to a new code that is node-locked reducing the portability of OnTap that NetApp always championed. While some customers may like the new feature sets, there are many who feel the 8.2 upgrade is going to add unwanted complexity in both solution engineering and day to day operations.
This is a fork in the road for NetApp’s customers. A sizable number of customers like the simplicity, reliability, and compatibility of their current equipment with 7-mode. Additionally, customers have to engage NetApp directly to get 8.2 licenses for older systems, which requires an expensive NetApp support agreement.

Our customers like NetApp’s original messaging that allowed customers the freedom to upgrade their filers simply, on their own schedule, and without a professional services engagement. Now you have to ask permission for an upgrade from NetApp. What people have traditionally liked about NetApp is that it left administration of the filers in the hands of the administrators. This was a big differentiator from EMC, who controlled even the simple task of swapping out of bad drives! Trading that freedom in and being forced into a box is a bitter drink to swallow for many NetApp aficionados.

Zerowait’s customers have asked us to sweeten the storage cocktail they’ve been offered, and we have come up with a recipe which leverages a customer’s NetApp equipment with our SimplStor hardware to provide an affordable and easy to manage tiered storage strategy. Using our approach, customers will be able to put their primary storage on whichever current equipment they choose, and then using standard migration methodologies, move their lower tier data to NetApp equipment, which Zerowait supports, on a second tier. For even greater cost savings, SimplStor can be rapidly deployed for archival storage needs.

Zerowait’s customers like the flexibility to choose their storage equipment’s support model while most are questioning how NetApp’s new licensing scheme will benefit customers. If you are considering an upgrade to OnTap 8.2, but aren’t sure about it, give us a call and we will review the options with you. Our expert engineering staff can help your staff upgrade or migrate your data and afterwards they can enjoy a refreshing glass of lemonade using our recipe of lemons, sweeteners, and a few drops of our secret sauce.

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How many data migrations can your company afford?

Banana_Fruit Over the last few weeks I have been visiting with customers in the Southwest. The common theme of the meetings since the beginning of January has been that it is very hard to make strategic decisions on long term storage requirements when your hardware and software vendors are working with very short product and support life cycles. Since Zerowait is in the legacy support business for NetApp equipment I get into a lot of very interesting discussions of how companies can make plans for archival storage in such an environment.

One of the customers I spoke with last week compared the product life cycles of NetApp’s products to the shelf life of a banana. We laughed at the comparison but it’s not far off. We have many customers who live in a regulatory environment where their storage has to be immediately accessible for decades. Over time these regulations have enormous costs in both time and money to ensure that the storage is available and that the networks are well-documented. One of our Radiology customers informed me that typically the images are reviewed a few times in the first 90 days, but must be kept spinning for 21 years. His question is how many storage platform manufacturers around today are going to be supporting their equipment and proprietary software two decades from now? And government regulations for the Tobacco industry require data accessibility for perpetuity.

These compliance storage requirements are seeping into other business sectors and the unintended consequences are going to cost companies a lot of money in managing archival storage. One of our Oil and Gas customers has taken the approach that proprietary storage software is time-limited by its DNA in that the software writer has to constantly update their code to stay in business. His approach is open source, which will provide support for legacy software for decades. I think this makes sense, but the process of migrating data between proprietary high availability primary storage resources to high reliability secondary and tertiary storage is still a costly process in time and money–and it will remain one for decades.

It seems that many customers are starting to realize that they need to put their primary storage on systems with the shelf life of a banana, and then migrate their data to a long-term affordable archive solution. Because of our expertise in legacy NetApp equipment and open source storage solutions many of our customers are asking Zerowait to help bridge the gap between the requirements of high availability storage and affordable long term archiving. It is this long-term business support model that led to our SimplStor product, and is only going to grow.

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Getting off the NetApp train

Does NetApp have a problem with 8.2 cluster-mode? Their reputation was earned with highly reliable storage, and by empowering their customers to do things themselves. With 8.2 Cluster-mode the NetApp Borg are in control and NetApp has turned into EMC. NetApp customers have always been in control of their systems and configurations: Now you have to ask the Borg for permission.

Last week while visiting a client in New York I was told “I’m getting off the NetApp train; there will be no more forklift upgrades in our facilities.” It was not the first time I had heard that a customer was tired of the cost of NetApp support; being in the independent support business I work with disaffected NetApp users daily. But since the announcement of the relicensing of Filers by NetApp for 8.2 came out our business has been inundated with requests for legacy support for NetApp equipment.

NetApp started out as a departmental storage company, and Dave Hitz and James Lau really put together a great engineering team to solve the problems of NFS, CIFS and multi-mode storage. Snapshots and Snapmirror are great software products that are reliability leaders and a true differentiator. These products empower Storage Administrators to provide their users with outstanding data storage reliability and access. Why would a corporation that has worked so hard over the years to earn its customer loyalty, suddenly change its business paradigm and enrage its customer base?

A friend of mine that is in a related business to ours might have the answer: He said that it sounded to him as though NetApp had changed from an Engineering company to a Marketing Machine. And we wondered: Could this be a pattern for innovative manufacturing companies when they get to be about 20 years old and experience wholesale changes in leadership?

During our discussion, I mentioned that NetApp’s management should be listening to their customers, and reacting to the unhappiness that is pushing them to embrace legacy support. My friend said that the original team at NetApp understood the issues of the Storage Administrator and built a solution for them, while the new management does not understand the issues that a storage administrator deals with and are far more focused on numbers and Wall Street.

Based on what I’ve been told, NetApp’s customers recognize that there are not enough new features in 8.2 to justify the costs and effort to upgrade to a new OS platform. The customers are telling their Sales teams that they like what they are using now and Zerowait is going to maintain their equipment moving forward. Will NetApp’s management listen to their customers, or will they just keep to their talking points? I expect 2014 will shape up to be a pivotal year for NetApp Corporation and its customers.

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Trying new things

As 2013 nears an end, I have been reflecting on the things we tried and the successes we had over the course of the year. For example, in 2013 Zerowait tried to increase the proportion of total sales in the areas of international service and support business and SimplStor products. In reviewing our efforts, I can see how we accomplished our goals, but can also identify the many course corrections we made along the way. The path was not necessarily straight. Basically, I have found that there are 3 steps to success; and, while each is critical, success is never guaranteed. However, if you allow your team to count learning and adapting from failure as a part of the process, improvement is always possible.

Step 1 is Vision: Since we are in the service and support business, when I meet with clients I hear about their problems. I listen closely and try to identify ways that Zerowait can create a solution for them. In a typical year I visit between 100 and 200 customers at their locations, and because I travel so much I have time alone to think about possible solutions. The result is between 20 and 25 new ideas a year that I try to work into something definable. Once I have identified the core idea, I present it to our team for review. Most of the ideas won’t hold water after a few minutes discussion, but in a typical year about 5 new ideas will get turned into projects of one type or another. One of my friends considers this the law of 25%: About 25% of my conversations will yield an interesting business idea, about 25% of those ideas are worth a business analysis sheet (which I do), and about 25% of those analysis sheets will actually be turned into a project at Zerowait.

Step 2 is Execution: If you don’t execute then the ideas are just dreams. At Zerowait we create engineering projects to try things with defined completion dates, which often slip as we learn more information. What is interesting in researching new things is that often the course you are on can change as a new piece of information steers the project in a new direction. That new direction can create something wonderful, but there is a chance it’ll just be a waste. That is why communication is so important with projects. It is difficult to stay focused on the objective while being flexible enough to be able to change direction a bit to meet a new information or opportunity. As Zerowait doesn’t have unlimited financial or human resources, we have frequent reviews and are willing to pull the plug on a project if it is not yielding results of one type or another.

Step 3 is Course Correction: As we endeavor to create a new product or service I have frequent conversations with our customers to make certain we are staying on course with what they are looking for. Sometimes things work in ways that you don’t expect, or someone leaves their job and that causes the project to wither on the vine. Other times the “Hey – what if we did this?” conversation with customers will lead to Zerowait trying a new variation which turns into the final product, and that is very cool. Unfortunately, most projects we try do not yield a new product; they yield knowledge and often an incremental change in the way we do things to improve our customer service and support.

It is often very frustrating to watch what started out as a great idea struggle as we are unable to execute the idea and make it a success. Even in those cases, when we write up the report it is important to document what we learned so we can add that to our knowledge and experience and apply it to the next round of projects. For example, this year we built a special 2U SimplStor Controller for a specific market niche but the customer went another direction. A few months later another customer asked for a very similar product configuration because I had mentioned it during a meeting. A perfect example of how the first failure led to the second success, which looks like it will turn out to fit an even bigger market niche.

At Zerowait we will continue to try new things and find ways to help our customers. Trying out new ideas is always interesting and often frustrating, but in the end it certainly provides us with a wealth of experience and knowledge with which we continually improve our products and services. From SimplStor to the Exporter of the Year award, Zerowait has grown and prospered because we keep trying new things.

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Zerowait solves the cost challenges of Data Storage

Founded in 1991, Zerowait is the largest third party service company providing NetApp (NTAP) support and the creator of the SimplStor product line of affordable big storage solutions.

Zerowait’s core business is its ZPA Zerowait Parts Assurance business which provides customers around the world with outstanding service and support for their legacy NetApp equipment, including its Exception Reporter systems monitoring. Zerowait supports NetApp storage infrastructure in the financial, energy, healthcare and media business sectors.

Background : NetApp is one of the largest data storage providers in the world and the release of their new OnTap 8.2 operating systems has forced many of their customers into a corner. They are now in the awkward position of having to upgrade to the new NetApp architecture or change their storage infrastructure. Whether a customer decides to upgrade or migrate away from NetApp, there is no winning as both options are expensive. Many large NetApp customers are deciding on a third option; the use of third party support to maintain their legacy NetApp equipment while they consider their options for data storage going forward.

Question:
How does NetApp’s upgrade to OnTap 8.2 change things for NetApp’s customers?

Mike Linett: NetApp’s customers use a lot of older legacy NetApp Filers to store their secondary and tertiary data. OnTap 8.2 will not allow customers to snapmirror data to systems running older versions of OnTap, forcing them to upgrade to expensive newer systems. Customers are under a lot of budgetary pressure and NetApp is taking away their options. We have had several customers tell us that the upgrades are going to cost about $1 Million per PB, and they are looking for alternatives. As the only international independent service provider customers are contacting us from all over the world.

IT spending is under the budget microscope at many organizations and CFO’s and CIO’s are looking for every way they can to save money. $1 Million per PB for secondary and tertiary data just does not make sense to many organizations, and primary data is not growing as fast as archival data. We are helping customers bend the cost curve down substantially.

Question: What is the primary benefit of NetApp’s OnTap 8.2 OS ?

Mike Linett: From NetApp’s point of view 8.2 offers scale out for performance and capacity, but there are really very few companies in the world that need that level of scaling and the costs are very high. Our customers like the idea of scale out with 8.2 but are wondering why they can’t use their older systems any more. NetApp seems to have forgotten that customers need BOTH affordable and scalable data storage solutions, not EITHER affordable or scalable data storage solutions.

Question:
How is NetApp positioned as open source storage solutions continue to take market share?

Mike Linett:
NetApp’s software is feature rich, but the costs can make the biggest companies blush. NetApp has a high cost of goods, and an expensive support model. Quite frankly, the value add of NetApp is being challenged daily by open source alternatives that don’t have the high costs of acquisition, maintenance, and software support.

Our SimplStor Platform spans a number of markets from archiving through secondary storage solutions. With our Add on Kits our customers can add flash, solid state and a number of memory options and network options including SAN. We have found that one size does not fit all storage requirements, and so we offer SimplStor Add On kits to our customers who need to tune their storage to meet their unique needs.

Question: What is your forecast for 2014 and 2015?

Mike Linett: Corporate finance is paying a lot of attention to IT spending and in the bigger accounts we meet with the question is typically how can we help cut 30% or more out of their storage costs. When compared to NetApp for support we are typically 50% of their price and our SimplStor acquisition price is about $200K per PB compared to NetApp’s $1000K per PB. So the value add of NetApp is under a lot of pressure right now and for the next few years.

Question: Where does Zerowait go from here?

Mike Linett: Zerowait is adding Field Storage Managers to service our NetApp and SimplStor customers around the world, and our international growth over the last few years has been phenomenal. We expect our international and domestic commercial business to continue to grow as more customers need affordable, scalable storage options.

In addition, we are going to increase our concentration on the Federal space and are in the process of releasing a GSA schedule. The Federal government spends a lot of money on storage, and Zerowait can help them save our money. Storage is only going to grow, and Zerowait can help the government control the cost of that growth, just as we have been doing for the private sector.

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