This week I got a call and an email from some folks that are thinking of taking out their NetApp R200’s and NetApp FAS3050’s to replace them with IBM NAS5500’s . I mentioned to the customer that the NAS5500 is essentially the same unit that the NetApp equipment is, so I did not understand his motivation. I explained that NetApp’s Executives and IBM’s Executives were now best buddies and IBM was selling NetApp equipment and support services, so it really does not make any sense to trade in his NetApp equipment for rebadged NetApp equipment. I could not make any sense of this at all.

So I asked a buddy of mine how this deal could make any sense to NetApp, his answer was quite simple. NetApp gets to sell twice the equipment, so what do they care! And IBM’s sells equipment also! In his view it is good for the sales force, good for the stockholders and good for Zerowait also, since we will be getting a bunch of almost new equipment. Okay then, I hope this customer remembered to write ‘Transferable licenses required’ on his original PO to NetApp!

This type of arrangement is destined to fail in the High Tech marketplace, as the two sales forces will begin to compete among themselves. However, as a consumer electronics marketing ploy it makes lots of sense. Rebadge the product to get into different market niches. Imagine spending several hundred thousand dollars for a piece of equipment that is sold just like a DVD player. Perhaps NetApp views IBM sales as incremental?

Perhaps NetGear and Zetera should watch out as NetApp enters the consumers electonics & storage arena. When will Circuit City and Best Buys be advertising NetApp at a store near you?

$$ By the way, give us a call if you have some NetApp F840’s you are looking to trade in! $$

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