Zerowait Corporation

Intel has slashed the prices of their processors, the question at hand is how will this affect new NetApp equipment. The current models of the FAS3000 series and FAS6000 series are using AMD processors, will NetApp switch to Intel now?

It is an interesting question, brought on by an article I saw today.

Intel has slashed prices of some of its processors by up to 50 percent in a move it claims is for clearing out 65 nanometer (nm) processors to make way for 45nm ones. Nevertheless, the price cut might prove fatal for rival AMD (Advanced Micro Devices), whose chips have been hitherto considered low-price alternatives in the chip market.

Will NetApp switch processor manufacturers now that they can get cheaper components from Intel? How will this change their product line up? They seem to have canceled the FAS3020 and FAS3050 which were Intel platforms for the 64 bit FAS3040 and FAS3070. What will be the longevity of these systems?

I certainly hope that AMD will do everything they can to hang in and continue to build their business and maintain competitive pressures on Intel. AMD makes a great products and we are certainly big fans of their technology and products. I hope that NetApp continues to keep AMD as their preferred vendor.

Over the last week I have visited clients in Western PA and also spoke with quite a few on the phone about the costs of maintaining their storage infrastructure and the options for making their current storage last a lot longer than their original plan. One customer we work with just decommissioned their NetApp 630 which they have been running since 1997. We helped them maintain it as a rock solid platform so they could maximize their storage potential for many years. They saved a fortune avoiding upgrades from NetApp.

Tuning NetApp storage equipment so that it can provide our customers with the maximum ROI and lifespan is a specialty of our engineering department. And it saves our customers money in a number of ways.
1) We help our customers avoid the high cost of data migrations.
2) We allow our customers to maximize the storage potential of their systems. Often providing storage beyond the marketing literature limits they were told the equipment could support.
3) We provide support for equipment so that it remains the High Availability pillar of our customers’ storage architectures.

We recognize that our customers are looking for a good deal, and the best deal in the storage business often turns out to be to avoid the upgrade and unleash the potential of your current storage architecture. At Zerowait we specialize in helping our customers maximize their ROI on their NetApp equipment. I hope you will give us a call if your budget is tight, or for example, you may want to add more storage to your current very reliable NetApp 900 series platform to extend its lifespan and utility. If so, give us a call 888.811.0808 ,we look forward to helping you unlock your NetApp’s storage potential.

Over the last week I have been traveling throughout the Southeast visiting customers and going to a meeting with the ASCDI in Key West. During the ASCDI convention there was a presentation by Michael Sacharski of Pacific Enterprise Capital which specializes in Chinese opportunity development for American companies. Michael put on a great presentation and the discussion that followed the presentation was quite interesting. Jon Toigo also put on a great presentation during the conference that kept the crowd interested in the changes in enterprise storage that we have gone through and we will be experiencing in the next few years. Jon and Michael both travel throughout the world and between the two presentations it was clear that business today has to be international in scope.

The customers I visited during the trip are all to one extent or another engaged in international business, and the storage services we provide them are helping them achieve their business success. One customer is looking to develop business in the UAE over the next year or so and asked us how we would provide them with hardware, service and support there. As the dollar gets devalued more and more, our equipment is being shipped overseas regularly, and the opportunities for business growth sometimes surprise our customers as much as they do me.

Mr Sacharski’s conversation with me revealed that there are opportunities for Zerowait to sell into China as their economic growth is causing them to require massive amounts of data storage. Affordable high availability storage is as interesting to Chinese organizations as it is to G8 nations. It will be interesting to see what develops.

When customers pay a premium price for enterprise class storage systems they have a right to expect reliability and high availability for theirs storage dollars. Therefore, it is troubling to many data center managers when they see that Sun is suing NetApp yet again, alleging that they violated Sun’s patents. Plus,a former EMC employee is saying things like this

“I don’t think [disk array manufacturers are] going to be forthright with giving people that data because it would reduce the opportunity for them to add value by ‘interpreting’ the numbers.” Steve Smith, independent consultant, former EMC employee

Today starts the new quarter for Zerowait and we expect our family of customers to continue to expand. Our first quarter exceeded our growth expectations. Apparently more companies are instituting their austerity programs and IT budgets are tightening. Savvy customers recognize that Zerowait can help them control their High Availability NetApp storage costs for the next few years.

Many folks have realized that High Availability NetApp storage does not become archaic just because NetApp has a new model to sell. No matter how much money NetApp spends on their new marketing campaign, customers will look to see if the new model actually provides them with any better performance then the model they have. If what the customer has is good enough for what the customer is doing, why should the customer upgrade? NetApp sales folks like to tell their customers that buying new is cheaper than NetApp’s maintenance costs for their legacy equipment. This may be true, but more customers every month recognize that Zerowait provides an affordable and reliable source of legacy equipment service and support for NetApp that saves them money!

A maturing market offers alternatives to customers and brings end user prices down. In view of the current economic conditions, customers should expect to see higher discounts off NetApp’s price list as NetApp tries to grow their market share in the total storage market. We have seen NetApp discount legacy support when they are confronted with a customer with our quotes. Competition works : )

I visited some customers in New Jersey last week. One customer asked me how I thought the economy would change the storage environment. I told him that overall people were not going to start suddenly to delete emails and Powerpoints to save their company money anytime soon. Therefore sooner or later folks are going to run out of storage again. If your IT department is trying to centralize storage in a tough IT spending environment it might become problematic to enforce standardization rules. If departmental budgets still exist, these departments may buy their own storage out of their own budgets. Security and storage standardization may go out the window as departments end up building their private islands of storage.

People seem to get protective of their own departments in a downturn.This may cause costs for the company to go up, but at the micro departmental level they can continue to spend if they are seen a a profit center, or revenue generating department. Most companies still view IT as a cost center and cost centers typically don’t get budget allocation increases in a downturn.

So the decision needs to be made. Who will determine how to pay for growing storage requirements? This may cause more organizations to outsource storage to put these costs in the Operational Expenditure category, instead of the Capital Expenditure category. Accurately allocating storage and infrastructure costs is going to be difficult when so many departments share the current storage infrastructure.

There will probably be some loud arguments about storage costs in boardrooms starting soon.

Since NetApp came out with their new blue staple look, I have gotten a few requests from people asking how I came up with the Zerowait name and our logo. I had already named the company Zerowait, because I did not like waiting for answers to anything and I expected that my customers would like a company name that expressed fast service and high availability also. The logo was designed by my friend Albert Zoellner after a few discussions with me. The logo took a couple of months more to come up with.

Partly due to the fact that I am a pilot, Albert wanted the logo to show speed and give an impression of a spinning propeller. So he made a green background and two swooshes to show speed, and pitched the company name at an angle over the green circle. The logo works – because people recognize the logo and seem to enjoy it on shirts, mugs, cars and everywhere else we can put it.

Over the last 18 years the Zerowait name and logo have become recognized in the high availability niche markets we work in. And recognition is what the logo is all about.

I think the important thing to remember about NetApp is that they make very reliable systems and Zerowait helps NetApp customers get more value out of them for our customers. I don’t think their new Logo is iconic in any way. Most people I speak with do not purchase high availability network equipment because of a logo but for performance and reliability reasons. But for the last week or so every NetApp customer discussion I have had has included a comment on their new Logo and an opinion of it.

So with our logo all you have to remember is that fast service is guaranteed.

Uncertainty in the economy is driving many companies to review their costs. Some are focusing on their high cost storage infrastructures, because when things go into recession many companies need to understand why their costs are so high, and where their money is going. Whether the USA is in an officially declared recession, or just a business slowdown, many large NetApp clients are currently experiencing hard times.

Storage is one of many areas within a corporate data infrastructure where costs can be contained. By reviewing the performance requirements of their applications, and creating tiers of storage and support services, IT professionals can contain their cost per TB of managed storage, and even reduce it. Analysts watching the storage industry who are cognizant of the ebb and flow of IT spending know there are short term ways and long term ways of controlling storage infrastructure costs. More than one analyst has noticed that troubles within the financial sector which NetApp’s CEO mentioned could have a big effect on NetApp’s growth over the next few quarters.

“The company is a leading maker of network storage systems, whose earnings have declined four of the past seven quarters because of poor internal execution.”

“Despite the upbeat sales guidance at the analyst meeting earlier this week, the stock was downgraded Wednesday at the brokerage Robert Baird. Given management’s guidance for a slow start to the new fiscal year, many investors are wary about management’s ability to meet its lofty sales growth target.”

“At the end of the day, I believe that readers should continue to avoid NetApp at current levels. Management is trying to transform the company in a difficult domestic economic environment, and I don’t believe that the company will be able to achieve its lofty fiscal 2009 targets.”

While the market is in flux might be a good time to take a strategic look at your storage vendors’ plans for the next few years. Are your vendors aligned with your company’s IT road map, plans, and tech refreshes? How will your vendors weather a sudden downturn in the marketplace? How will their new products benefit your company?

Recently there has been an uptick in our tuning business, many customers call us and ask our engineers to tune their filers to get better disk utilization, increase their storage capacity or tweak their filers to get more speed or output from them.

Zerowait’s engineering staff is recognized for helping customers get the most out of their filers. Often we help our customers meet and exceed their current requirements without forcing them to buy a new filer.

As more NetApp customers embrace name space and virtualization technologies, they find they suddenly need to find a way of increasing their storage capacity to meet the new capabilities of their storage infrastructure. Zerowait can help customers find the right settings and configurations to meet their new capacity requirements without breaking their budget, so increasing your storage capacity does not necessarily accelerate your storage infrastructure’s appetite for your budget dollars.

First they shuffle the players in their executive suite, now they come out with a new Logo. I wonder when they will change their corporate philosophy?

I certainly hope this re branding works better than the New Coke did. Quite frankly, I always like the spinning disk idea of the NetApp look, this new look of a staple has me confused. What do staples have to do with storage? Perhaps this is all part of a Lock In Strategy like Hal Varian would describe? Staples as an icon to show how good NetApp is at locking customers into their proprietary technologies?