Zerowait Corporation

Yesterday morning a Purchasing Agent for a big company that we have been working with for many years asked us to review a quote that NetApp sent to them. The Purchasing Agent could not understand how come NetApp’s prices were so high.

We were asked if we could provide the equipment and we told her that we could and our price for the equipment would save her about 40%-60% of what the NetApp quote was. Every Purchasing Agent knows that you need to have two suppliers to keep prices down. And Zerowait helps companies worldwide keep their NetApp equipment acquisition and maintenance costs down.

NetApp understands that they need two suppliers for their disk shelves and drives and is forcing Xyratex to accept a secondary supplier. NetApp is doing this to keep Xyratex’s prices down. They are forcing their supplier to lower costs through competition.

According to the transcript of the recent Xyratex earning call, NetApp is looking for a secondary supplier of storage shelves.

“My true feeling is at least in the short to medium term NetApp and ourselves have been discussing for a long time their desire from a risk perspective to have a second supplier,so I think it’s driven by that but I think the fallout of it will be to see whether things can be done more cheaply in that way. And I guess to a degree Xyratex should invite that because to the extent that we can get product to our customers more cheaply while not increasing our own production capabilities but by looking to CMs to do more for us, then it should actually be positive for us as well if that is the case.”

It is good to know that NetApp understands the reasons to have two sources for parts and services. And their executives validate the business model whereby NetApp customers invite Zerowait in to provide support for some NetApp systems within their storage architecture. Many times companies buy shelves of drives from Zerowait and we support the shelves we sold on a system and NetApp supports the shelves which it sold.

Whenever a company has all its eggs in one basket the purchaser and the supplier are tied together, and that is usually cause for mischief on the suppliers part.

If you are asking the question ” Why does NetApp charge so much?” Call Zerowait. We have the the answer. Competitive quotes for NetApp equipment will make NetApp sharpen their pencils. Just like NetApp is causing Xyratex to do.

Today storage administrators are wondering:

Why do Seagate disks cost so much from NetApp?
Why do yearly software downloads from NetApp costs tens of thousands of dollars?
Why do I have to upgrade my underutilized equipment that is working perfectly fine?
How am I going to support my storage infrastructure when my budget is cut?

Storage administrators see the forced upgrades and ridiculous software download pricing as crazy. They recognize that their vendor’s support costs are out of control. And they are trying to rein in costs because their budgets are being locked down. Storage vendors are not working with their clients and can be patronizing to them when they are having some troubles.

“Daniel J. Warmenhoven, CEO of data storage company NetApp (NTAP) (formerly Network Appliance), counts himself lucky that neither Lehman nor AIG was a big customer (though Lehman did take the company public). He says tech spending is holding up so far—in part because it lowers operating costs. ‘The analysts are always ‘woe is me,’ because their industry is getting hammered,’ says Warmenhoven. ‘Well, go cry in your own beer. Don’t ruin mine.’ “

What happened to long term business commitment to create loyalty between customers and vendors? Why are so many vendors willing to throw their customers “under the bus” as the saying goes?

At Zerowait we have worked hard to build an indivdualized long-term relationship with each of our customers. We understand that companies go through rough patches, and we find creative ways to work things through with them. High availability storage is a long-term business. We all know that you can’t throw away your documents and records.

Who is standing by you in these times?

NetApp seems to be getting ready to try to force some more customers to upgrade when they don’t have to. In tough economic times many companies are trying to extend the life of their storage and infrastructure assets, but that does not fit in with NetApp’s game plan. They sell boxes, and they need to sell more, so upgrades are being sold.

” The 3020, a smaller and older array than the 3140, will be end-of-lifed soon though, reducing the number of models in the FAS range by one and, we could read it this way, creating a space in the range for a new mid-range model.”

Zerowait understands that many customers are having a hard time currently, and we are working with them to try to keep their storage running at a cost they can afford. NetApp takes a different view of customers that are having trouble because of the financial shakeout.

Daniel J. Warmenhoven, CEO of data storage company NetApp (NTAP) (formerly Network Appliance), counts himself lucky that neither Lehman nor AIG was a big customer (though Lehman did take the company public). He says tech spending is holding up so far—in part because it lowers operating costs. “The analysts are always ‘woe is me,’ because their industry is getting hammered,” says Warmenhoven. “Well, go cry in your own beer. Don’t ruin mine.”

We look forward to helping the folks at AIG and Lehman, or the companies that acquire their storage assets, and we know that we can support their NetApp infrastructures at a cost they can afford for many years to come.

Over the last several years I have been watching Larry Ellison’s storage company Pillar Data Systems to see how they leverage their unique Oracle connection. It seems they have been very careful to not upset the applecart for the storage vendors EMC and NetApp. But after reading a few press reports today it may be that Larry’s companies are about to package a hardware and software solution to compete with NetApp and EMC.

Article 1

Pillar Data Systems, which offers what it calls application-aware storage systems, introduced “profiles” for integrating its systems with Oracle databases, VMs, and the Oracle Unbreakable Linux program. They said the profiles will produce improved utilization and performance, better system availability, and centralized management of storage in Oracle environments. The company is backed by Oracle CEO Larry Ellison.

Article 2

… users often need to wait too long for disk storage systems to transfer those terabytes of data into Oracle’s database software. The Oracle-HP storage server is meant to address that problem by performing some of the computer processing closer to disk drives. The Database Machine server can speed up processing of financial transactions or data analysis. Oracle has also taken aim at the nascent market for “cloud computing,” which lets companies run software in large, remote data centers, accessing it over the Internet. On Sept. 23, Oracle and Intel (INTC) announced joint work on database performance and security for cloud computing environments.

It would make sense for HP to work with Oracle on breaking the hold in customer environments that EMC and NetApp have. But finding a strategic partner that will remain loyal for the long term in Silicon Valley seems very hard. If HP, Pillar and Oracle can work out a long term arrangment it would be good for customers, because competition in the storage business always brings down prices.

It must be hard to pick your strategic partners these days if you are a storage vendor. For example, Riverbed is a partner of NetApp , but it looks like Riverbed is about to release a very competitive product offering to cut the growth of storage.

Riverbed calls its new product Atlas, and says it can eliminate up to 95% of redundant data in corporate storage systems. In a release earlier this week, the company asserted that the Atlas appliance “will do for its customers’ data at rest” what the company’s Steelhead products “have done for their data in motion,” eliminating redundancy “which typically burdens IT infrastructure by slowing down access to data and applications and increasing costs and operational overhead of data management.”

“Wolford makes the eye-opening claim that alpha testers are finding they can increase primary storage by 300%-1,000% by using Atlas. That sure makes Atlas sound like a big threat to the storage vendors, don’t you think?

Riverbed said it plans to start shipping the product in the 2009 first half.

Not sure if the Riverbed news this week is responsible, but it is the case that storage stocks today are under pressure: NetApp today is down $1.70, or 7.8%, to $20.10; EMC is down 83 cents, or 6.5%, to $12.01; RVBD is down 18 cents, or 1.4%, to $12.77.”

NetApp’s executive suite seems to be getting ready for some sort of change in the storage marketplace and may be preparing their own golden parachutes.

Attached to the 10-Q NetApp filed on Sept. 3 were amended change-of-control severance agreements for CEO Daniel Warmenhoven and other unnamed executives that were effective on June 19

Zerowait sponsored Racer 94 at the Reno races and we placed second in the Bronze T-6 Class. As a first time sponsor with a new pilot, Ott Claremont, we did very well in the Bronze T6 race. Our western customer conference was a success and we wish you could have joined us. Jon Toigo was our guest speaker on Friday night and he fostered an open discussion between our customers on the challenges they all face in satisfying the demands of the growing need for storage management in a world of tight budgets.

It was a great event, we look forward to next year.

Recently the Executives at NetApp have been extemely quiet, which may have contributed to new rumors of a takover possibility for NetApp. One of our customers sent me this link and asked what I knew.

Could Takeover Rumors On NetApp (NTAP) Have Some Meat?

Michelle Leder’s footnoted.org highlighted recently amended change in control agreements for NetApp, Inc. (NASDAQ: NTAP) CEO Daniel Warmenhoven and other unnamed executives. The changes come on the back of rumors the company could be the target of a takeover bid.
Michelle said it is possible the change was simply routine, but she is obviously noting this because amendments to change in control agreements sometime precede takeovers.

This was the first time I had heard of this rumor and all I can tell our customers and interested parties about this is that Zerowait will continue to provide the high availability service and support they expect from us for legacy NetApp products whether NetApp is acquired or not.

According to the New York Times, Sun is getting ready to unleash new Storage products into the Enterprise space. Although NetApp does not think they will be any threat, I have spoken with many customers who are thrilled with the price point and performance of their SUN Thumpers.

According to the Article.

With these difficult lessons behind it, Sun thinks it now has a chance to disrupt a different part of the hardware sector and make life tough on rivals. In November, Sun plans to release new storage hardware and software that takes aim at a part of the storage market dominated by NetApp and EMC. Playing off the same trends that shook its server business — less expensive hardware and software — Sun is looking to undercut the competition and sink their margins.

But NetApp does not see the new products as any problem.

As for NetApp, the main target for Sun, the company sees customers continuing to pay a premium for software that delivers more sophisticated functions than what Sun is discussing. “The larger companies out there will not go with the Sun type of solution,” said Patrick Rogers, a vice president at NetApp.

One of the commenters on the article has this to say....

We moved entirely away from NetApp product, and are running large storage farms on Sun’s Thumper products. We are seeing dramatic performance increases, and significant price reduction.
I am curious why NetApp doesn’t see this as a threat, it surely looks to be exactly that.— Banking Customer

Zerowait has seen our business grow over the last few years because NetApp customers are tired of the high prices for support and maintenance of their equipment. I would think that customers that are used to Sun in their server farms would be willing to take a chance on these new products, especially is they are less expensive than NetApp. Competition works and customers will benefit by lower prices.

With low prices as bait, Sun may have a great fishing trip.

In November, Sun is set to show off new storage gear that has been part of a project code-named FISHworks (FISH stands for Fully Integrated Software and Hardware).

I’ll be watching, to see what they catch.

Most of the time when issues of compliance come up within our industry it is about meeting standards for data integrity and security. But because of the recent spikes in energy costs for running and cooling data centers fire code and electrical code compliance issues are starting to creep into conversations with network and storage managers. Today I saw the first article in the press that detailed some of the issues managers face. It is worth reading the whole article.

“The hot aisle is just too hot,” Sacco said. “If you’re going to exceed 110 degrees, you could actually exceed the [National Electric Code] standards.”

Forgetting about the fire code issues, Menuet added that you have to think of your employees.

“It will be over 100 degrees in the hot aisle,” he said. “It certainly isn’t comfortable for technicians that have to get in there and work on the equipment.”

Using vinyl curtains for separation
Using vinyl sheeting, much like what you’d find in a meat locker, is one method that data centers have used to contain their hot aisles. Storage vendor NetApp uses them and says the curtains alone save it 1 million kWh of energy per year. Yahoo uses them in one of its data centers as well.

But there are fire suppression issues with this method as well. If you have plastic sheets over your racks and don’t have sprinklers in the contained area, how can a potential fire be squelched? Most companies that manufacture this sheeting say it melts at 130 degrees, thus eliminating the aisle containment and allowing the sprinklers to work from there. But what if for some reason the curtains malfunction?

“The curtain attaches to the ceiling with heat-sensitive fusable links,” Menuet says. “If there’s a fire, the heat melts the links and the curtain falls. But if I was the fire marshal, I’d be concerned about a curtain hanging from some fusable links. Most places would have trouble with that. If I were proceeding with good hot-aisle/cold-aisle containment, I would design a fire system around it and put enough heads in the hot aisle and enough in the cold aisle.”

Never mind the aesthetic ramifications. Menuet said he was working on a project in Minnesota, where discussion included using freezer curtains to contain the hot aisle, “but it didn’t show well.” In other words, company executives might not like the fact that their data center looks like the back of a butcher shop.

Inform the local fire inspector
Sacco added that one of the most important things is being in line with local fire authorities, because if they conduct an inspection, see something they weren’t notified about and don’t like it, they could shut you down.

“Many people deploy these systems in ignorance of the law,” he said. “Many people do it and manufacturers are manufacturing the pieces. But the local inspector is the final authority. If the local inspector doesn’t realize what’s going on, the whole job might not be compliant.”

This last statement is worth remembering when you are tinkering within your data center.

Last week we had a customer who called with a problem. While working with the client we decided that the best way to solve the problem was to go on site. So we told the customer we would fly up to see him and should be there in a few hours. I filed a flight plan and one of our engineers and I went over to my plane and flew up to the Boston area to solve the customer’s problem. Gaining new customers is hard, and at Zerowait we like to try to keep our customers happy. This customer is now convinced that we really do care about customer service.

Today I had an experience that shows me that not all companies care about their customers. AT&T is our cell phone provider and we have a corporate account, which means that the account executive wants the last 4 digits of an FEIN number not a Social security number to verify the account. But the customer service reps I spoke to kept asking for my phone number, name and social security number. I tried to explain that my social security number and our corporate FEIN number are not the same and I didn’t know the FEIN- but two different reps could not understand that. Finally I got a rep that would agree to let me speak to a supervisor. I explained the situation to Mike the supervisor and he laughed and agreed that good help is hard to find.

The situation reminds me of when I go up to the airline counter and they ask me if the bag has been in my possession since I packed it. Well the reality is that the bag has been in a shuttle bus and sometimes at a concierge desk and many other places. So when asked what are we to say? If I say that the bags have been in my possession that is not completely true. Should I tell them the truth that the shuttle bus driver put the bag in the back of the bus, and the concierge put it in a closet while I was out visiting clients after I left the hotel room but before I had to get the bus to the airport? In a completely interrelated world of commerce, business and our personal lives we are being forced to tell companies half truths to fulfill the needs of their databases, before we get the customer service we deserve. This is backwards. We should be able to create systems that verify who we are when calling with two pieces of information. AT&T had my name and phone number. Their DB keeps a FEIN number instead of a SSN; that is not my fault.

Customer service is a primary responsibility of every company – there is competition for every company’s service. When AT&T technicians call Zerowait for help with their filers should we ask them for their FEIN number? Will they know it?