Zerowait Corporation

Over the last many years that we have been working with NetApp products we have never been able to discern any long term marketing strategy. At least now they admit they are not talking about their strategy though.

“NetApp isn’t talking about its strategy. A company spokesperson said all the information NetApp will make known on today’s announcement is in its press release.”

According to NetApp’s CEO in recent Eweek interview they have a strategy that appeals to the investor community. “We’ve had tremendous success in terms of putting the company on the map, identifying a market strategy.” The strategy when we were NetApp resellers and Registered Service Providers seemed to be to get into companies that had exploding needs for departmental storage, which is where the NEtApp F740 and F760 fit so well.

As I have pointed out numerous times in the past in this blog, NetApp’s channel Strategy seems to change with the tides.

2003
Network Appliance (NetApp) launched its new, two-tiered channel strategy earlier today, to build and expand its enterprise storage sales with the value-added reseller community. By engaging with Arrow, NetApp resellers can gain additional support through Arrow’s dedicated sales and focused marketing services.

2004
“The NetApp™ STAR partner program and initiatives are important to our strategy to attract and retain the industry’s top storage-focused resellers,”

2005
“The VIP reseller program and initiatives are an important component of the Network Appliance strategy to attract and retain the industry’s top storage-focused resellers,”

But aligning their strategy with the goals of growth is a good thing and one that investors and customers should be happy about.

“Network Appliance (NSDQ:NTAP) is defining which customers can and cannot be approached by its direct-sales reps, CRN has learned.

Under the forthcoming Hard Deck program, the Sunnyvale, Calif.-based vendor of SAN and NAS products will work with its channel managers and district sales managers to determine which customers throughout North America will be named accounts targeted mainly by direct sales and which will be channel-exclusive, said Leonard Iventosch, NetApp’s vice president of Americas channel sales.”

2006
“NetApp’s latest launches will expand that strategy, with the StoreVault line positioned against EMC’s Clariion AX150 and the EMC Insignia lines at the low end and the FAS6000 line going head-to-head with EMC’s Symmetrix line in the enterprise-class SAN space.”

The StoreVault line will have only one sales channel: VARs. “This is the only go-to-market vehicle for us,” Krishnan said. “No CDW (NSDQ:CDWC ). No e-tailers.

2007

“NetApp(R) StoreVault(TM) Adds CDW to Expand Channel Strategy

SUNNYVALE, Calif. –(Business Wire)– StoreVault, a NetApp (NASDAQ: NTAP) division, today announced it is adding CDW Corporation (NASDAQ: CDWC), a leading provider of technology products and services to business, government, and education, to its roster of authorized StoreVault resellers. The new agreement provides small and medium-sized businesses (SMBs) another way to access StoreVault S500 solutions.”

“TBR said NetApp would align its financial strategy to focus on increasing revenue growth to drive net income going forward. The company would focus less on scaling back R&D and selling costs, and concentrate on expanding its international foothold and product design to increase its storage solutions market share. However, market competition is fierce and we believe NetApp will seek to differentiate its products through virtualization technology offered in non-complex storage solutions. TBR also said the company will be forced to strike a balance between manageable gross margin and operating profit, and increased revenue from new product design and selling activities.”

Zerowait has a long term strategy – We will provide a long term affordable alternative to NetApp for service and support of their equipment.

This week I was in Atlanta and Denver and right now I am in Denver Airport writing this blog. Traveling to see customers at the end of the year is interesting, most folks are in a reflective mood and thinking about their costs of storage acquisition and management. I met with several folks who are worried about whether we are entering a recessionary period and some are also concerned if we are also entering a inflationary period. Business planning is always difficult, but now storage managers have to be concerned with not only uptime and connectivity but also about power usage and costs.

2008 is going to be an interesting year.

A few years ago when storage was a hot new thing, and the internet was still in boom times there was a company called Storagenetworks that got lots exciting press coverage.
In 2000 one well respected analyst was enthusiastic..

Business is starting to get ready for storage outsourcing, said Steve Duplessie, senior analyst at The Enterprise Storage Group Inc., a Milford, Mass.-based consultancy.

StorageNetworks pitch was that Storage could be run as a service, and at first it made some sense. However, their cost structure was too high and at the time major corporations were afraid to outsource their tier one storage and databases to a company like Storagenetworks.

Google is now trying to offer a similar model but with some Google mixed in…

Popular Mechanics has an excellent article on some of the issues with this…

“Trusting information with a third-party client can still expose you to thorny legal challenges such as a subpoena. Unlike a search warrant for your off-line hard drive, which is far more restrictive and difficult to obtain, Google could perhaps be persuaded by law enforcement to deliver up your files—without even telling you.

“Google would be wise to offer users an option to encrypt your information,” says Nimrod Kozlovski, a professor of Internet law at Tel Aviv University. “It really needs to have really detailed explanations of what the legal expectations are for storing your info.” “

“Then there’s the trickier part: How does giving away storage translate into profits for Google? The company could potentially serve up contextualized ads to Gdrive users similar to its Gmail service and the Ad Words search model that made Google a giant in the first place. In this case, a computer might scan through all your files for relevant keywords, in a move that’s certain to spook privacy advocates, who tend to give Google a free pass compared with some of its competitors. “

There is no question in my mind that Google will get market share and it is a disruptive enough model to upset the storage oligarchs model of selling more hardware. If Google is able to pull this off it may validate the StorageNetworks model, it may also create a whole new storage services sector in the marketplace and provide companies, and just plain folks, with more choices for how they manage and maintain their storage. And this will be a good thing for everyone except those array manufacturers who maintain their box selling sales and marketing strategy.

History may not repeat itself, but it certainly is entertaining to look at old news reports like this…

StorageNetworks IPO Signals Boom For Storage Outsourcing
EMC Accuses SNI Of Misrepresenting Relationship
(URL: http://www.crn.com/storage/18816631)
By Joseph F. Kovar – CRN – Waltham, Mass.
7:58 PM EDT Fri. Jun. 30, 2000

StorageNetworks Inc. demonstrated that the IPO market is still alive and well when its shares skyrocketed 234 percent after going public today.

StorageNetworks, an early entrant in the storage service provider arena, is hoping to ride an expected wave of storage outsourcing.

SNI, based here, sold 9 million shares of common stock priced initially at $27 per share, up from its original plans to offer shares at $17 to $19. By the end of trading day Friday, shares closed at $90.25, after retreating from a day-high of $102 but still up 234 percent.

SNI is the best known of several storage service provider startups offering to manage the growing storage needs of businesses and consumers at remote data centers.

International Data Corp. projects that worldwide storage services spending will exceed $40 billion in 2003, up from about $21 billion last year. Of those services, management and outsourcing will have a compound annual growth rate of 31.8 percent during that time, IDC said.

Business is starting to get ready for storage outsourcing, said Steve Duplessie, senior analyst at The Enterprise Storage Group Inc., a Milford, Mass.-based consultancy.

As storage needs grow faster than the ability of companies to grow their storage capacity and management, outsourcing will become an important part of their strategies, Duplessie said.

It is easier for businesses to focus on core competencies and leave storage to the experts, Duplessie said. “Clearly the dot-coms were born for (storage outsourcing),” he said.

Duplessie agreed with many industry observers who predict corporations will hesitate to hand their data to outside service providers. “However, data backup is a universal headache,” he said.

When it comes to disaster recovery and backup, he said companies will find outsourcing preferable to building a whole second storage infrastructure.

“I could outsource such secondary and tertiary operations, and still control all my own data,” he said. “And as companies get used to working with SSPs, they will move more of their data.”

All is not necessarily rosy for SNI, however.

Company officials, in a regulatory filing filed Monday, said that EMC Corp. sent SNI a letter on June 21 alleging that SNI has misrepresented that EMC is an investor in SNI even though that is not the case. EMC, in that letter, also accused SNI of recruiting EMC employees and targeting EMC customers in violation of agreements between the two.

SNI purchased over 90 percent of the disk storage arrays and related software it uses to provide its services from EMC last year, although the company now works with about 15 different suppliers, company officials said. Forty percent of SNI revenue in 1999 came from providing professional services to customers of EMC.

What I noticed at the RSNA conference this week is that there are a lot of competitive solutions being offered for PACS ( image archives) and that there seems to be a lot of marketing dollars being spent on spinning who has the best answer and the best pricing. Also, I noticed that Medical Sales folks wear suits, not just khaki pants and logo shirts! WOW : )

The big storage array vendors seemed to be pushing the idea that security and their large size is worth more to the customers , while the emerging vendors were touting low priced alternatives to the high price solutions. I spoke to one salesman at an emerging company from Irvine, CA who was explaining that his system stores a lot of images. I asked how much and he said they had almost 40 TB of storage at one location in TX. The salesman really thought I would be impressed by that amount, since I was paying very close attention to the system specs. I explained that that was still a small amount of storage, and asked him what type of storage he was using. He was not able to tell me if his system was using RAID 5, or RAID 1, or RAID 0 or whether this Texas installation figure being quoted was a Raw number or a usable storage number. He proudly told me that his system uses new High Availability SATA disks though. I asked him whether he had a higher failure rate with SATA than he experienced with Fibre Channel disks? I clarified that up to this point we have seen higher failure rates with the SATA disks we support. The salesman could not provide me with any numbers or statistics and at this point decided that he should talk to another customer. Although he had a very nice suit, he should have known more about the technology he was selling. His programming was incomplete.

A few minutes later, I was purchasing some coffee and struck up a conversation with an engineer from one of the large array vendors. I asked him about their experience with failure rates between FC disk and SATA disk. This turned out to be a very interesting conversation because the engineer explained that older SATA disks did seem to have a higher failure rate than FC disks for them. I asked for more details, and I was told that their testing of the newest SATA disk do seem to test out almost as reliably as FC disk. I was not able to learn which disk models have been tested by them to be superior models, but I am really interested in this information. Finding reliable and verifiable disk failure rate information which compares enterprise array failures of FC and SATA disk seems very difficult. I understand that over all disks are very, very reliable, but I would like to see some verifiable statistics instead of marketing numbers.

I also got the chance to visit some of our Chicago area customers this week. I really enjoyed my visits and it was great to be told by our customers how much they enjoy dealing with Zerowait.

This week I will be in Chicago meeting with customers in the area and attending the RSNA show. Radiology creates large storage archives and managing these can stretch the budgets of healthcare IT departments to the breaking point. When budgets get tightened healthcare IT departments start to call Zerowait for an affordable solution to the costs associated with their storage infrastructure.

IT departments are beginning to recognize that keeping their HIPAA compliant images on spinning media for the long term is getting very expensive because there is an upward spiraling cost of administration and system upgrades, but there is also a recognition that the costs of maintaining and keeping disks spinning costs a bundle of money also.

This week at the conference we will be talking to our customers about how to stretch their budgets using transferable licensed filers, and switching to our third party hardware support and services. Nothing new here, just trying to help our customers get the most out of their IT budgets.

It should be an interesting conference.

Happy Thanksgiving!

NetApp is redefining its Channel Commitment again. Does anyone see a pattern here?

http://www.crn.com/storage/204201145
3:11 PM EST Wed. Nov. 21, 2007
That lack of services commitment to the channel has hurt partners, said one major NetApp solution provider who asked to not be identified.

“Their professional services people have been competing with VARs for the last four years,” the solution provider said. “We’ve been almost in direct competition. We have four fully certified engineers who every time they turn around they see NetApp selling services direct. So it’s good news if things are changing.”

Things are indeed changing, Iventosch said.

http://www.crn.com/storage/60405700
NetApp’s Boundary Lines
Mar. 04, 2005
Network Appliance (NSDQ:NTAP) is defining which customers can and cannot be approached by its direct-sales reps, CRN has learned.

Under the forthcoming Hard Deck program, the Sunnyvale, Calif.-based vendor of SAN and NAS products will work with its channel managers and district sales managers to determine which customers throughout North America will be named accounts targeted mainly by direct sales and which will be channel-exclusive, said Leonard Iventosch, NetApp’s vice president of Americas channel sales.

http://www.channelinsider.com/article/Channel+Programs+Need+to+Be+Designed+for+Solution+Providers+Not+Vendors/215404_1.aspx
DATE: 17-SEP-2007
Channel Programs Need to Be Designed for Solution Providers, Not Vendors

Network Appliance is hoping to change the foundation of how it works with the channel. Other vendors’ channel program executives should watch carefully.

The second compelling aspect of the program is that NetApp is piloting a professional service program designed to empower solution providers to sell their own services under a NetApp logo. NetApp is building out a series of services methodologies that it will certify its partners on the end customer knows they can have confidence in the services provided by the solution provider. Longer term, NetApp plans to increasingly compensate its own services people based more on partner satisfaction in order to stimulate the right kind of approach to the channel.”

Maybe a real change of direction is needed? How about putting Dave Hitz back in engineering and deciding on either a channel strategy or a direct strategy, the competition between the two competing sales forces is not good for anyone.

As a business owner I am often given the responsibility for trying to make a forecast based on information I am receiving from my employees, customers and vendors. Having had some background in Economics, I always try to remember that Economists have forecasted about eight of the last three recessions : ) .

I am leery of making forecasts only on News reports, because the media makes sales by telling us how bad things are, which I understand is why local news starts with the latest murders in a city like Philadelphia. Telling us how beautiful the leaves are with pictures might not keep people glued to their TV sets as long, and ad sales may suffer.

But even while keeping this in mind , there seems to be a steadily increasing level of news about technology layoffs.

Finance’s Troubles Infect Tech
As Wall Street’s giants take massive writedowns, fears are growing about the impact on technology budgets
by Heather Green
How hard are the troubles in the finance sector going to hit tech? Since technology companies rely heavily on Wall Street, it’s been a growing question as financial giants have taken one massive hit after another.

Now, the answer is starting to emerge. On Nov. 7, Cisco (CSCO) reported fiscal first-quarter earnings and CEO John Chambers disappointed investors with a softer-than-expected outlook for the rest of the year, in large part because of the financial sector. “In the U.S. and the enterprise [markets], we did see some softness,” Chambers said. “The finance vertical was the one hardest hit.”

E-Loan Eliminates 400 Jobs
Posted by Keith C. Smith on Nov 13 2007 06:49:01 PST
The floodwaters of the mortgage crisis have swept onto the internet’s shores as E-Loan announced yesterday its layoff of 400 employees.

410 employees at the company’s Pleasanton, Calif., headquarters were notified last Friday that they would be dismissed after 60 days. The headquarters currently employs 925 people.

E-Loan intends to jettison 410 of the roughly 925 jobs at its headquarters in the East Bay, said Laurie Azzano, a spokeswoman for Pleasanton-based E-Loan.

AOL’s Falco Says 2,000 Layoffs
By Tammi Marcoullier at 11:34 a.m., October 15, 2007 (Updated at 1:58 p.m., October 15, 2007)
Over the next couple of months, AOL will lay off 2,000 people out of a worldwide workforce of 10,000, according to a letter to company employees sent by CEO Randy Falco today. These staff reductions begin tomorrow, as have long been rumored throughout the company and in the blogsphere. The Associated Press is reporting that about 750 staff will be cut from Northern Virginia offices, including former headquarters in Dulles; 1,200 total in the U.S.

Boston Scientific starts planned layoffs of workers
Boston Scientific Corp., which recently said it will eliminate 2,300 jobs worldwide, has begun letting workers go. But both the Natick medical device maker and the state have declined to say how many of the cuts are being made in Massachusetts.

Lawrence Livermore Lab will lay off 500 workers
LIVERMORE – Lawrence Livermore National Laboratory will be laying off 500 employees over the next month as the nuclear weapons research facility trims costs following a change in management, a lab spokeswoman said.

SEAGATE
Reports: Seagate to lay off 900 workers in Ireland Seagate Technology Inc. said it will lay off more than 900 employees in its Northern Ireland operations, according to reports Monday.

In this atmosphere it is refreshing to know that our company’s growth is solid and I forecast that it will continue to grow. Because as budgets tighten companies look for an affordable reliable alternative for their hardware service and support.

Many storage clients are worried about how they will manage increasing storage demands when their budgets get cut. This is a legitimate concern, because purchasing new equipment will get harder as Capital Expenditure budgets get pinched in a recession or by inflation.

“A Wall Street superstar this year who runs Balestra Capital Partners, Jim Melcher, says he’s “worried about a recession. Not a normal one, but a very bad one. The worst since the 1930s. I expect we’ll see clear signs of it in six months with a dramatic slowdown in the gross domestic product.”

“Noting that consumption is already slowing, Mr. Melcher figures sharply rising unemployment is inevitable. Another of his worries is that central banks around the globe, America’s included, are debasing their currencies, which is setting the stage for a new round of higher inflation.”

Maintaining older equipment may pay for the time being, because of the leveling of processor speeds as seen in this WSJ article ,

“The great plateau has had a drastic effect on chip sales. There is less reason for computer users to replace their hardware and little reason for hardware companies to buy the most advanced chips, which are the most profitable for chip makers. “

Legacy NetApp users may actually be able to provide better database performance by keeping their older equipment running longer. The best example is the FAS980 customer who can keep adding 72 GB and 144 GB spindles all the way up to 674 disks, and save a bundle over a newer unit. If you are looking for a long term storage solution and your company is worried about the risks of inflation and recession, perhaps it is time to review your current storage infrastructure. The question to ask your storage vendor is how can you provide our company more storage with less money to invest?

Zerowait has some of these answers.

Storage is not the only computer application where vendors are unable to take advantage of ever increasing speeds of processors as the Wall Street Journal notes:

“Other users are running into problems already. Robert Singleterry Jr., a researcher at National Aeronautics and Space Administration’s Langley Research Center, studies the potential effects of space radiation on astronauts. His software depends heavily on each chip’s clock speed — a contributor to computing speed, measured in gigahertz — and has seen disappointing test results based on quad-core chips with slower clock speeds than dual-core chips.

“Now when I buy the latest and greatest, the performance goes down,” Mr. Singleterry said. “This has never happened in the past.” “

The urgency to purchase new equipment from manufacturers has diminished without the steady speed increase. This change provides a great bargaining chip to the purchaser of new storage equipment.

American Heritage Dictionary –
ar·chive (är’kīv’) Pronunciation Key
n.
1. A place or collection containing records, documents, or other materials of historical interest. Often used in the plural: old land deeds in the municipal archives.
2. Computer Science
1. A long-term storage area, often on magnetic tape, for backup copies of files or for files that are no longer in active use.
2. A file containing one or more files in compressed format for more efficient storage and transfer.
3. A repository for stored memories or information: the archive of the mind.

Will NetApp partner with anyone for the long term? It is a reasonable question to ask from a company that wants to provide you with a long term data archive solution. A simple search on Google reveals a few contradictions as to whether there is a long term commitment from NetApp regarding partnerships.

10:41 AM EDT Mon. Jul. 21, 2003
“CRN Interview: Dan Warmenhoven, Network Appliance
By Joseph F. Kovar
CRN
Last week, Network Appliance said it would for the first time sell products through distribution–via agreements with Arrow Electronics’ North American Computer Products group and Avnet Hall-Mark–to serve the bulk of its existing solution provider community and to attract more channel partners. Company CEO Dan Warmenhoven spoke to CRN Senior Editor Joseph F. Kovar about the distribution move, the channel and EMC/Legato.

CRN: Why the push through distribution?

Warmenhoven: It’s the next stage in expanding our channel partnerships. Over the last few years, we’ve developed a set of global partnerships with firms like IBM Global Services and Accenture. Last year, we got into what we consider ‘Star’ partners like Forsythe, Datalink and a few others. And we just felt it was time to move on to the next stage.

We’ve had a number of regional VARs, probably in the neighborhood of about 100, that we have developed in parallel with our Star partners. And it was really time to provide a consolidated way to interface with them and provide additional support to them. “

05 November, 2007 12:38:14
“NetApp cuts distribution ties with Avnet and Lan 1 in favour of a sole partnership with SAN Systems”

kayleigh bateman, CRN 05 Nov 2007
“NetApp looks to boost channel sales
Vendor looks to increase 60 per cent rate”

A data archive is going to take a long term commitment to parts and service, therefore researching your storage solution vendors commitments to long term partnerships should reveal whether they will be able to provide parts and service for the long term.

Therefore I suggest 2 simple questions that you ask your storage archive salesperson….
1) How long will I be able to purchase parts for this system after I put it in service, will you commit to parts availability for 7 or 10 years?
2) Mr Vendor does your service and support commitment match the American Heritage definition?