Zerowait Corporation

This morning one of our customers in Texas called me to tell me to thank our engineering staff for helping them solve a thorny issue with one of their clusters. Our staff worked on Friday, and over the weekend they monitored the situation. The customer really appreciated all the support he had gotten from our staff, and wanted to tell me about it.

This particular semiconductor customer came to Zerowait for our third party service and support after NetApp tried to force them to upgrade their perfectly good systems by raising their price of support to ridiculous levels in 2003 . NetApp’s dedicated sales team wanted the company to buy new equipment, and they wanted to keep their legacy systems running. Zerowait provided a support policy for them that has maintained their High Availability systems in top shape at very reasonable costs for 5 years now.

High Availability storage systems do not get cranky just because the OEM has come out with a newer model. So why does NetApp charge so much for legacy storage support? Only the suits at NetApp know for sure.

New York State seems to be trying to drive more business away according to this Editorial in today’s Wall Street Journal.

Return of the Web Tax
Wall Street Journal May 1, 2008; Page A16

New York Governor David Paterson is not repeating the worst mistakes of his predecessor. That’s too high, or perhaps we should say too low, a bar. Still, the new Governor has resurrected one of Eliot Spitzer’s least popular ideas, a tax on Internet sales that he hopes will raise more than $70 million a year. Despised by consumers and constitutional scholars alike, this new tax will hit e-shoppers within weeks.

By signing the state’s budget, Mr. Paterson is now attempting to do what Mr. Spitzer only threatened: Force out-of-state retailers such as Amazon.com to collect New York’s sales taxes, which approach 9%, including local levies. A 1992 Supreme Court decision called Quill bars exactly this type of money grab. The Supremes ruled that forcing such obligations on companies with no employees or buildings in a state could cripple interstate commerce. Without Quill, small Web merchants would have to answer to 7,500 state and local tax collectors.

New York’s spendthrift pols are desperate for revenue, however, especially given that their current budget increases spending by 5% despite the pinch on Wall Street that will hurt state coffers. The Governor apparently believes he can get to companies like Amazon through New Yorkers who run ads for Amazon on their Web sites. In fact, if nonemployees with some business relationship with a company were enough to establish physical presence, then Quill would essentially be meaningless.

The courts may well ax the Paterson tax on these grounds. But until they do, some companies will feel pressure to pay instead of doing battle with a state government. New York’s overall business tax climate ranks 48th among the states, according to the Tax Foundation. Mr. Paterson’s money grab could make New York the biggest loser when it comes to tax competitiveness.

When will politicians learn that companies act just like people and move to locations that provide an affordable atmosphere in which to grow?

If analysts could accurately predict the future there would be no risk in investing upon their advice. Therefore, I have to wonder if analysts are predicting the future in their writings, or if they are not. If they accurately predict the future, they would be widely read and therefore the yield for return on investment based on their advice would be rather low. Following this logic the Contrarian who keeps his opinions to himself, may have the best return on investment.

Almost all storage industry analysts say that computer storage is going to grow, many of them get caught up in which type of storage will be the fastest growth or most widely adopted. But I don’t know of any that say that businesses and individuals are going to stop saving files. Will the future of storage be a remote storage service solution or will it be really cheap and reliable spinning media or flash memory?

A friend of mine pointed me to this article today:

As you move along the storage technology continuum, you’re trading price for speed. Getting information stored on tape, which is cheap, can take hours or days while accessing something on flash, which costs a pretty penny, takes microseconds. Plus, solid-state drives using flash can’t possibly store all of the data people are creating. There’s also the question of how reliable it is.

Given this, most companies requiring huge storage arrays rely on expensive machines from the likes of EMC or HP. Or they make their own “storage cloud” using commodity disk drives and a proprietary layer of software. By allowing companies to allocate and provision the storage in a software layer, it virtualizes the storage array. It’s essentially the same model that underpins the storage services offered by Amazon S3 and Nirvanix.

Meanwhile, tier-one storage equipment vendors companies such as EMC, IBM and HP have recognized that cloud storage is the future of computing, and are attempting to ride that wave without cannibalizing their high-margin box business. For example, EMC is offering services for SMBs through its Mozy acquisition. IBM last year purchased XIV, which makes the software that can be used to virtualize storage. Large companies such as NetApp and 3Par are attempting virtualize storage as well.

This article suggests to me that vendors are taking different approaches to solving the growth and high cost of storage, however they do not want to get into a business that will hurt their current cash cow business of selling arrays which are expensive and not all that efficient. This would suggest to me that there is an opportunity for a new entrant with a lower cost model to come into the marketplace and create a new market niche for themselves. I am certain that the next few months will reveal that there are many opinions as to whether the broadly defined storage marketplace decides on Flash, Cloud storage or spinning media.

But eventually the market will decide, no matter what the analysts say.

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.