Zerowait Corporation

Yesterday, I was talking to a friend of mine about which way he thought the big shots in Enterprise Storage companies would contribute to political campaigns. It is no wonder that billion dollar storage companies employees are willing to back their favorite candidates with donations. It is the way of the world. My buddy thinks that executives should contribute to the party that backs open markets and free trade since all the companies are engaged in global commerce and work with worldwide supply chains. I think that the executives of big companies are more pragmatic, and either contribute to all parties or the one that they feel can benefit their company the most.

Since we deal in the NetApp marketplace I was most interested to see where they contributed. Because NetApp has changed its name from Network Appliance recently you have to look in two places now. It turns out that EMC’s employees are much more generous to presidential campaigns in this race than NetApp’s:

Presidential race:
NetApp
Network Appliance
EMC
IBM

Lobbying firms are also well funded by the storage industry:

NetApp
Network Appliance
EMC
IBM

I think it is great that the executives of these companies get involved in politics, They have worked hard to build great companies and I hope that they are contributing to the people and parties that they believe can help their companies, employees, and stockholders the most.

Only the executives in the firms can judge whether they are getting a return on investment on their Lobbying efforts. NetApp does not seem to be spending very much on lobbying currently, in comparison to EMC and IBM. It will be interesting to watch and see if as they grow they invest more in lobbying.

A competitor called me up the other day and said some really nice things about our company and the loyalty of our customers. He wanted to know how we do it. I told him it was not easy. Looking back on the conversation I can say that it takes just as much effort to think big as to think small. Therefore, we always try to look at the big picture, while concentrating on the smallest details for our customers’ requirements.

To be a world class competitor in the high availability storage marketplace means we have to exceed our competitors on customer service, adaptability, innovation and product quality on every transaction. To keep our customers happy we work to adapt our systems to their needs, often it means looking at things a different way and creating new relationships to accomplish our goal of satisfying the customers requirements.

Creating a streamlined service and support business that provides the highest levels of customer support takes a lot of effort by our team. Our customers appreciate our efforts. We can tell because word of mouth recommendations are the biggest source of new customers for us.

Thank you for recommending us to your peers, we really appreciate it.

Why would an executive who was running a very successful division of a growing company jump ship? According to this press release NetApp’s storevault product was a very successful product.

“Last year, NetApp StoreVault S500 took top honors. As it turns out, the StoreVault went out on top — earlier this year the vendor announced it was folding its small and medium business StoreVault division into its FAS storage unit.

At the time, NetApp said combining the product lines would allow it to expand the StoreVault platform into remote and branch offices as an extension of it core product line. “

It seems odd for an executive to leave while his product is on top, and there is so much growth within the company, but here is the press release I saw yesterday.

“Krishnan joins Cupertino-based Parascale from five years at Sunnyvale-based NetApp Inc. (NASDAQ:NTAP), where he was most recently general manager of the company’s StoreVault business unit that focuses on network storage appliances for mid-market businesses.

He was also general manager of NetApp’s Storage Management Software business, overseeing the company’s core management products. “

I never understood the product positioning of Storevault or its pricing model. NetApp is a high priced enterprise storage vendor, and selling a low priced solution never made sense to me. Perhaps others felt the same way. Sales folks will always sell to their commission schedule, and since Storevault was a low priced solution it was probably very hard to get sales to ramp up unless the commission schedules were enormous. But for most of its life it was only sold through NetApp’s convoluted channel, making selling the product even harder.

A Network Appliance solution provider working with that vendor’s StoreVault S500 entry-level storage array moved quickly to take advantage of a couple potential opportunities only to cry foul when he said he was thwarted by the vendor in pursuing those opportunities.

Ron Robinson, president and CEO of Innovative Technology Data Storage, an Atlanta-based storage solution provider, has been engaged with NetApp in a long-running battle over whether the vendor and its direct sales rep, who focuses his sales on NetApp’s FAS line of midrange and enterprise storage appliances, is unfairly preventing competition from Robinson selling the vendor’s entry level StoreVault line.

Robinson also accuses NetApp of violating its own dealer registration policy in the case of another customer who had been purchasing from a local solution provider but who was interested in making a deal with Robinson.

I hope Mr Krishnan learned a thing or two at NetApp and will apply his experiences to creating Parascale into a long term successful company.

This breaking news was reported on Friday evening.

“We got partner feedback,” he said. “They said they want to provide us support for professional services. But they didn’t want to pay $10,000 on top of the expense of taking people out of the field and away from billable hours.”

Iventosch said the fee was originally his idea, and was aimed at offsetting the cost of NetApp’s professional services support center. “I did the ROI (return on investment) on the tool, and found that it justifies the cost of the program. But partners said, ‘Great, but we still have to pay the $10,000 up front.'”

Good, said Keith Norbie, director of the storage division of Nexus Information Systems, a Plymouth, Minn.-based solution provider and NetApp partner.

“It’s massively significant,” Norbie said. “You talk to any VAR, and they’ll tell you they want services and higher margins. But they don’t want to pay an annual fee to do it.”

I don’t think it should be ‘News’ that VARS want to make a profit, but NetApp has historically viewed the Channel as a Missionary sales force and lead generator for their Internal sales force, so it is no surprise that they may be puzzled by VARS who try to make a profit on Service. Perhaps NetApp will have an epiphany soon and see that if VARs have more of a margin to work with they can sell more hardware.

But with recent news that NetApp is enlarging its internal sales force, I don’t see how NetApp will allow outside sales and service organizations to make more money than their internal sales force’s representatives. Having two competing sales forces causes friction, but NetApp has built a sales model that has four competing sales forces. NetApp direct and their channel, and IBM direct and their channel.

Dan Warmenhoven, CEO of Sunnyvale-based NetApp (NASDAQ:NTAP), said the company plans to increase its sales force by hundreds of workers in the next few months in an effort to pick up market share.

It is all very confusing, why are they building their internal sales staff if they want their channel to make more money? Perhaps the channel should fear that NetApp’s new sales folks are going to take market share from their own channel?

In other events, it was good to see NetApp’s Advertisement in the Economist this week, a lot of our customers pointed it out to us.

Tom Mendoza is highlighted in the Wall Street Journal today in a very good piece. I met Tom twice at two succeeding NetApp Reseller conferences, the first time was in the Hayes conference center in San Jose and the second time was at a hotel in San Francisco. In those days NetApp liked that Zerowait was a service oriented company that had many high availability clients to whom we could offer their products.

As a highly regarded, trusted NetApp team member Zerowait received one of the first of the registered Service Provider (RSP) agreements from them. NetApp’s RSP agreement allowed Zerowait to provide first level service to some of our customers including Computer Science Corporation (CSC). What happened next was interesting. In the succeeding years, as Tom built his sales force, he saw that as Zerowait’s sales increased throughout our high availability market sector, we came into conflict with his internal sales teams. A common theme began to play out. Having done the missionary sales work to get NetApp into the bigger High Availability accounts, NetApp began to take those accounts direct from Zerowait.

By then, CSC and Zerowait had developed a long-term relationship and we placed filers with them here in Newark, Delaware right down the road from us. We were deep into a huge project, that would involve a sale of several of the latest model filers, when suddenly we learned that NetApp had made CSC a Global Partner (with discounts greater than ours). We voiced our displeasure because, we pointed out, as a result of this we lost not only CSC, but also our long-time customer DuPont, who was closely aligned with CSC for storage. NetApp just said, Business is business, sorry. Within only a short time after that, a NetApp functionary named Bruno Pakey took the lead on cancelling our reseller agreements with NetApp.

Ironically perhaps, this is the proximate cause of how Zerowait became the leader in independent support for NetApp equipment. Our customers were used to our high availability focus and our concentration on customer service. They came back to Zerowait and asked us to take over their hardware support after their contracts with NetApp support had expired. And each year since then our service and support business has grown because we provide excellent service and support for NetApp equipment at an affordable price point.

As the founder and president of Zerowait I agree with what Tom has to say about being passionate about your choices.

Q: What advice do you like to give to students about choosing a career?

A: Find something that you are passionate about, find a company that you respect and is growing in that area, and focus on making a contribution to them.

I can assure you that everyone within our company really loves NetApp products and their reliability, and that is why we help our customers maintain their NetApp Filers for many many years at affordable prices, so they can invest their precious budgetary resources in other parts of their companies.

NetApp builds great products and for almost ten years Zerowait has provided honest and affordable service and support for our customers with filers.

As an interesting side note, I never realized that Thomas Mendoza was from Commack, Long Island. I wonder if he attended any of the schools my father built while he was business manager of the Commack school district.

Over the years Zerowait has had many customer conferences at different locations around the country. For a few years we had our conferences in Key west every May, and these conferences were a big hit. This year we are having our customer conference in Reno, Nevada during the Reno Air Races. I have been attending the races for the last few years with a growing group of customers and this year we decided to formalize the event as our customer conference.

Jon Toigo has agreed to be a speaker at our Friday night dinner September, 12 2008 and will cover the issues he sees surrounding out of control data storage and data center costs. We are looking forward to a lively and enjoyable discussion following his talk over dinner as our customers are well known for pushing the envelope and getting the most out of their IT investments.

Over the next couple of months our customers will get more details on the particulars of joining us for our 2008 Zerowait customer conference. I can assure you that it will be another educational and enjoyable conference.

E

*****************************************

Summer is starting and with higher energy prices there might be some incentives for raising the thermostats in your Data Centers. However, one thing we have noticed over the years of supporting hard drives in the field is that higher temperatures cause disks to fail more often. When it comes to cost control, keeping a balance between disk failures and higher temperatures seems to be a question we are asked about often.

There seems to be a correlation between disks that are higher in racks and failures, although it could be a coincidence. Most people have a hazy understanding of their Data Center airflows , other than they notice hot spots and cooler spots within them. But hard drives need to be kept cool, so keeping your shelves of hard drives in the cool spots might help your drives last a bit longer. Unfortunately, moving your cabinet of drives to a formerly cool spot might make it a hot spot.

One thing is certain and that is heat rises. Keeping your data center on a lower floor and moving your servers and drives closer to the floor will keep them slightly cooler. Consolidating your storage islands onto fewer platforms and trying to rationalize your storage onto appropriate platforms for their usage patterns may save you money, buying new systems may look good, but often just consolidating you current storage will save you money by saving energy and extending the lifespan of your systems.

There are no magic solutions to the cost problem of cooling your data center. Consolidating and rationalizing your storage configurations will save your company money. If you have any proven ideas, send them our way and we will post them.

There is an announcement today that NetApp plans to increase its direct sales force.

Sunnyvale, Calif.-based NetApp (Nasdaq: NTAP), a data storage company that employs roughly 700 in the Triangle, plans on boosting its sales force by hundreds of workers in the next few months. The move is important so that NetApp can pick up market share, CEO Dan Warmenhoven told analysts in a late Wednesday conference call.

A bigger direct sales force would seem to create an area of potential conflict between NetApp’s inside sales force and their channel efforts . Perceptions of the channel can be different depending on where you stand, Somehow I don’t think a bigger direct sales force will be good for channel sales even though the channel seems to do well for NetApp.

About 64 percent of revenue in the period came from the channel, compared to about 60 percent last year. “We were hoping to hit the two-thirds mark, but didn’t quite make it,” said Dan Warmenhoven, chairman and CEO of NetApp, of the growth in channel revenue.

And how will the new Direct sales force work with their OEM? IBM may not be thrilled…

This rollout of fresh support for NetApp products comes amid some buzz among Wall Street analysts of increasing channel conflict between the two companies. “We are hearing of some increased pressures in the direct sales vs. IBM channel side of the business,” wrote Wachovia analysts Aaron Rakers, in an email to clients.

Storage consumers should have more parties to negotiate prices with as the NetApp sales department grows. I wonder if that will lessen conflict any?

Last week I was in New England visiting some of our customers . It was a great trip and it looks like we will picking up some more business from our clients. All the folks I met with are trying to save on their storage costs, and they recognize that our pricing model saves them a lot of budget dollars while allowing them to maintain their high reliability storage infrastructures.

A few of the customers I met touched on the costs of energy as part of their infrastructures. With budgets tight, and operational costs rising, purchasing new equipment has been pushed back and so our legacy support policies and pricing help them in a couple of ways. They can stretch their equipment lifespan and still afford their rising utility bills.

Teddy Roosevelt said in his autobiography
“Americans learn only from catastrophe and not from experience.”

Data centers and their operating costs may be a leading indicator of a looming problem. It seems that it may be time to start drilling and mining our domestic energy resources, as the costs and political intrigues of importing energy may be getting unsustainable, if costs continue to escalate. Outsourcing our data centers to other countries where energy is less expensive may happen if we don’t get energy costs under control.

As costs rise markets will find a solution, which is why customers come to Zerowait for an affordable support solution as compared to their OEM’s plans. Similarly, as energy costs increase, we need to find cheaper alternatives to our current suppliers. Affordable energy is a keystone required for economic growth.