Zerowait Corporation

According to many analysts the enterprise storage market has been shrinking and NetApp and EMC are slugging it out for market share.

The NAS (network attached storage) market declined 6.7 percent year over year, led by EMC with 39.0 percent revenue share and followed by NetApp with 28.7 percent share.

Coincidentally, we are seeing growth in our service and support business this year, as companies look to save on maintenance and extend the lifespan of their legacy equipment. Extending the time between upgrades is one way to get more value out of your storage infrastructure, another way is to manage your storage resources better.

Creating a plan by which you can consolidate your existing storage, and reduce service and support expenses can stretch your budget dollars. That is why more companies are coming to Zerowait and asking us to provide them a free storage analysis and quote on their current storage infrastructure support. Superseded High availability storage equipment can still provide many years of service to most organizations for a fraction of the price of an upgrade.

Data Domain may be the most popular company in the Storage niche in the last few days. In hard economic times it pays for customers to want to save money by increasing their storage efficiency and de-duplication makes a lot of sense if a customer can see real cost savings.

As a larger company with more large storage customers, EMC has a bigger market than NetApp does within its existing customer base. And they may be able to use DD to help their customers save money by reducing their storage requirements. Also, since many DD customers are also NetApp customers it gets EMC into the door of existing NetApp accounts.

EMC seems to have a better history of integrating companies than NetApp does, and so from a customer and employee point of view folks may want to see EMC win this battle.

During a late Monday afternoon press conference, EMC CEO Joe Tucci promised that his company would run Data Domain as a product division within EMC, and would increase its R&D investment in Data Domain technology. “We look forward to giving the Data Domain employees a warm and heartfelt welcome into the EMC family. I would like to remind everyone EMC has a good track record of integrating companies, retaining and growing key talent and achieving results,” Tucci said. The CEO didn’t mention the less-than-stellar integration of VMware Inc. technology into EMC, though to be fair, that acquisition has been a financial success so far.

On the other hand, NetApp does not have a good track record with at least some of its acquisitions, notably the Spinnaker Corp. deal in 2003 and the acquisition of Decru Inc. in 2006. Both companies went through a very rocky integration road with NetApp. “I do happen to believe that NetApp does acquisitions miserably,” said Arun Taneja, founder and president of the research firm, Taneja Group Inc.

De-duplication is another patch on the storage resource management problem. Storage is growing and as it grows it gets more complex to manage, de-duplication shrinks the footprint but adds another layer of management.

De-duplication is not the answer to the storage resource management problem.

Over the last week many people have asked my opinion of this acquisition. I was not surprised that NetApp purchased Data Domain, I know quite a few former NetApp folks who work there, and it will be interesting to see how they are re integrated into the NetApp fold. I think Ken Hibbard is perhaps the most senior former NetApp employee to be rejoining the company .

From Hoovers. com Mr Hibbard comes to Data Domain from Network Appliance, where he was vice president of product engineering. He has joined Network Appliance in 1998 and was named vice president of software development in February of 2000. In January of 2001, he became vice president of product development and East Coast operations.

It looks as if the Data Domain folks understand the NetApp product development cycle and therefore may be able to integrate their products into the NetApp Line card a lot quicker than the Spinnaker products have been integrated. I certainly hope that the integration of Data Domain’s customers and employees works out better for them than the Topio acquisition did for their customers and employees.

NetApp is closing down its Snap Mirror for Open Systems product, which came as the main part of its $160 million Topio acquisition.

Topio was bought in November, 2006, and its main product was an any-source-to-any-destination replication product called the Topio Data Protection Suite.

According to an article in CXO

... Data Domain lacks the customer base of large vendors and has been facing market challenges competing against Quantum.

In today’s environment customers are looking for the best value they can get for their storage dollar. The question will be if NetApp can sell Data Domain products at an aggressive enough price point, after paying such a premium for the company?

Over the next few months it will be interesting to see if NetApp can integrate Data Domain offerings into their product line and execute a sales strategy that works better than their recently ended Storevault strategy did.

6:31 PM EST Tue. Feb. 03, 2009 NetApp has quietly decided to kill its line of storage appliances for SMBs, a move which caused mixed feelings in the storage vendor’s solution provider community. NetApp told some users and partners that it has decided to end the availability of its S550 platform, which was the last product in its StoreVault line of appliances. NetApp unveiled its StoreVault line in May of 2006 as a way of entering the SMB market.

The EMC World show was great. From a trade show marketing point of view it was probably one of the best shows we have ever attended. The attendees understood the storage industry and were looking for answers to their storage and budget issues. We saw many of our old friends within the industry and a few of our customers at the show.

The EMC folks put together a well organized and smoothly run trade show.

The first day of the show at EMC world was really great. Our trade show booth was busy the whole time, and there were a lot of folks that really were happy to see us there. We saw quite a few of our customers from business and government. There were a lot of surprised looks and comments from folks who wanted to know what Zerowait was doing at the EMC show. But once we explained why we were there it made sense. NetApp legacy equipment support makes sense to a lot of customers with mixed EMC and NetApp environments.

I was really surprised by how many of the attendees were from overseas, this is really a great show.

Next week Zerowait will be exhibiting at EMC World in Orlando at booth 149. It is going to be a great trade show and we are looking forward to seeing many of our customers and friends there. Even in the tough economic environment we are experiencing the EMC show is drawing a lot of customers. This should not be that surprising since it is really one of the only targeted events for folks in the big storage business.

We hope to see you at the show.

Many years ago NetApp purchased their disk arrays from a company called Eurologic. These arrays known as the NetApp FC7, FC8 and FC9 were quite reliable and Eurologic was working on a new set of arrays when Xyratex came out with a variant of their RS1600 with 14 disks for NetApp. These disk arrays known to NetApp customers as the DS14 have been quite reliable and Xyratex has been selling quite a few of them.

NetApp has been looking to cut costs though and Dot Hill came in with a product that is significantly cheaper than the DS14 variants. According to Dot Hill:.

Pursuant to our Development and OEM Supply Agreement with NetApp, we are designing and developing general purpose disk arrays for a variety of products to be sold under private label by NetApp. We began shipping products to NetApp under the agreement for general availability in the third quarter of 2007, and net revenue from NetApp increased significantly during 2008.

In this tough market NetApp is going to have to find significant ways to cut its costs on hardware sales. I have heard rumors of a significant scaling back of NetApp Sales Engineers in the field. This will be a pity, since NetApp has some of the finest field engineers in the industry. In my opinion, if they cut back on their service and support there is not much to differentiate NetApp from every other hardware company. This may cause NetApp sales to erode further over time.

If NetApp sales are down, that would mean that Xyratex sales are down, and if Dot Hill is the new low cost vendor to NetApp it would be a double hit to Xyratex gross revenue numbers. The Xyratex folks were a loyal vendor to NetApp, I hope things turn out well for them over time.

I’ll bet someone is pitching a cheaper array to NetApp to take Dot Hill’s place currently.

Many times a day we get to laugh with our customers over something that happens or an interesting turn of a phrase in a piece of marketing material or in press release. Sometimes people send us an email with a funny turn of a phrase and today we got a good one.

“We have received a support renewal quotation from NetApp at post-warranty rates and fell off our chairs. (Have you heard this story before?) “

NetApp builds great products, and they are very reliable. But NetApp is a box selling company and not a service and support company. Therefore, NetApp needs to keep renewal support quotes high to incentivize customers to purchase new equipment. There is nothing wrong with that business model, and over the years it has worked very well for NetApp and most of their customers. But there are customers who value longevity in high availability product support, and that is where Zerowait shines. If NetApp customers are happy with their equipment and don’t want to buy the latest model, we provide them with legacy service and support at a very reasonable price point.

It is a really simple value proposition for most folks to understand…. if you are happy with what the equipment you have, we will provide you support at a price that will keep you happy. Even in today’s budget constrained situations we can help you stay seated on your chairs.

Over the last few months our business has been holding up well, we have seen an uptick in business over the same quarter last year and we have picked up quite a number of new customers. Many of the new customers have known about us for years, but when times were flush they did not need to cut back maintenance costs. But the economic winds have shifted and while many people are busy pointing fingers and assigning blame we are concentrating on helping our customers get through the rough patch. Zerowait is a service business and the longer we keep our customers happy, the better our business will be. Most of our new business is still gained by word of mouth referrals, which means that we must be doing things right by our customers.

As a service business we are concentrating on the long term, and not the unit sales going out the shipping dock’s door. By using our service and support our customers can concentrate on their long term issues, because they know that we will keep their Filers running reliability for them for the foreseeable future.

Today’s news…

WASHINGTON (AP) — The economy shrank at a worse-than-expected 6.1 percent pace at the start of this year as sharp cutbacks by businesses and the biggest drop in U.S. exports in 40 years overwhelmed a rebound in consumer spending.

The Commerce Department’s report, released Wednesday, dashed hopes that the recession’s grip on the country loosened in the first quarter. Economists surveyed by Thomson Reuters expected a 5 percent annualized decline.

Instead, the economy ended up performing nearly as bad as it had in the final three months of last year when it logged the worst slide in a quarter-century, contracting at a 6.3 percent pace. Nervous consumers played a prominent role in that dismal showing as they ratcheted back spending in the face of rising unemployment, falling home values and shrinking nest eggs.

April 26 (Bloomberg) — The U.S. economy will continue to contract “for some time to come,” said Lawrence Summers, director of the White House National Economic Council.

“I expect the economy will continue to decline,” with “sharp declines in employment for quite some time this year,” Summers said today on “Fox News Sunday.”

What is your D/R plan when part of your business critical data is in the cloud and the fiber lines are cut?

How do you make a smooth landing and keep your critical business data running if you don’t have access to your cloud resources? How do you make a D/R plan for data assets which are physically not in your hands?

Here is an article that is worth reading completely…

“Just after midnight on Thursday, April 9, unidentified attackers climbed down four manholes serving the Northern California city of Morgan Hill and cut eight fiber cables in what appears to have been an organized attack on the electronic infrastructure of an American city. Its implications, though startling, have gone almost un-reported.

That attack demonstrated a severe fault in American infrastructure: its centralization. The city of Morgan Hill and parts of three counties lost 911 service, cellular mobile telephone communications, land-line telephone, DSL internet and private networks, central station fire and burglar alarms, ATMs, credit card terminals, and monitoring of critical utilities. In addition, resources that should not have failed, like the local hospital’s internal computer network, proved to be dependent on external resources, leaving the hospital with a “paper system” for the day.

Commerce was disrupted in a 100-mile swath around the community, from San Jose to Gilroy and Monterey. Cash was king for the day as ATMs and credit card systems were down, and many found they didn’t have sufficient cash on hand. Services employees dependent on communication were sent home. The many businesses providing just-in-time operations to agriculture could not communicate.”

Imagine if your business critical data was housed in a data center that was no longer accessible, not just for a couple of hours, but for a significant amount of time. How would you make a D/R plan to recover the data that was housed remotely? How much time and effort will it take to build new servers and storage and migrate the data to another location. These are the types of questions I will bring up as a panelist during tomorrow’ s Cloudslam 09 virtual conference at 2PM.

The last lines of the article make a good point, how will enterprises recover their data assets if there is a wholesale migration to the “Cloud providers” for housing critical business data, but there is no connectivity?

“Will there be another Morgan Hill? Definitely. And the next time it might happen to a denser community that won’t be so astonishingly able to sustain the trouble using its two-way radios and hams. The next time, it might be connected with some other event, be it crime or terrorism. Company and government officers take notice: the only way you’ll fare well is if you start planning now.”