“Many a long dispute among divines may be thus abridged: It is so. It is not so. It is so. It is not so.” — Benjamin Franklin

Over the last few weeks we have experienced a substantial increase in NetApp customers calling us to see if they are getting the best value from NetApp for new equipment. We are fans of NetApp equipment but think that they certainly should lower their prices to remain competitive in the marketplace. In my opinion , Computer Storage is commoditizing and NetApp is still trying to sell their equipment at a premium. It reminds me of the pricing models of companies like WANG, DEC, and SGI, who went into a sudden decline.

According to Search Storage end users are starting to turn away from NetApp equipment based on value and price – and talking about it in public.

Arias evaluated 3 terabytes (TB) iSCSI boxes using SATA drives from Network Appliance Inc. (NetApp), EMC Corp. and Siafu Software LLC on recommendation from his local value-added reseller (VAR). Siafu’s Swarm IP storage area network (SAN) appliance stacked up well in pricing against an offering he got from an IBM reseller offering a NetApp box priced at between $50,000 and $60,000. “That was with refurbished drives, too, at a pretty deep discount.”

Whether NetApp can change into a commodity storage vendor depends on whether they can cut their costs more. If they can’t, they will join so many other companies that had a proprietary operating system that couldn’t compete with cheaper solutions that emerged over time.

Only time will tell who wins this debate on storage valuations -Will NetApp win, or will their customers? In the long run I would bet on the customers and the marketplace.