Zerowait Corporation

Holographic storage is it the future of storage? The Economist has an article on it this week that is worth reading.

Computing: After years of development, holographic data-storage systems are finally ready to go on sale

But despite plans to launch products in early 2006, Optware has yet to produce anything. And some observers remain doubtful that holographic storage will be commercially viable any time soon. IBM, once a leader in the field, has decided to concentrate on improving existing magnetic-tape systems instead, says Matthias Kaiserswerth, director of IBM’s Zurich Research Laboratory in Switzerland. InPhase’s first drive will cost $18,000, and each 300-gigabyte cartridge will cost a further $180. Holographic-storage technology certainly works and has all kinds of potential uses. But until the prices come down, demand for this unusual new technology could be all too holographic in nature: apparently there, but upon closer inspection proving to be only a mirage.

I certainly would like to investigate the InPhase technology for some of our Fortune 100 customers.

NetApp’s Warmenhoven is taking an interest in a former customer who has chosen an HP EVA solution, here is the email exchange from Toasters the mailing list for NetApp filer users.

From: Warmenhoven, Dan (Dan.Warmenhoven@netapp.com)
Date: Tue Jun 12 2007 – 20:36:01 EDT

Hi Paul,

I am very sorry that you are no longer a NetApp customer. If you
wouldn’t mind sharing with me, what vendor / product solution did you
choose to replace your F740, and why did you choose that solution over
NetApp (especially since it sounds like you were happy with both the
product and the support).

Thanks

Dan

Dan Warmenhoven
Chief Executive Officer

Network Appliance, Inc.
495 E. Java Drive
Sunnyvale, CA 94089
Phone (408) 822-6600
Fax (408) 822-6601

________________________________

From: XXX, Paul [mailto:XXX@###.com]
Sent: Tuesday, June 12, 2007 12:03 PM
To: NetApps list server
Subject: Farewell all!

Well, it is with deep regret that I bid all you toasters a fond
farewell. I’d like to say that I appreciate all the help during the
time that our 740 served us for about 8 years. The 740 was a fine
device and NetApps support was top-notch. After a very lengthy
discussion over several months, we went to another storage solution.
By the way, if anyone is interested in the 740 maxxed at 1TB raw and
includes a spares kit with motherboard and misc other parts that were
never used, send me an email. It is located in the Southern Indiana
area. First come, first serve. You have to arrange for transport. If
I don’t hear anything from anyone by the end of the week, it’s going to
the recycler. Thanks again to all.

If people concentrated on the really important things in life, there’d
be a shortage of fishing poles. – Doug Larson

________________________________

XXX, A+, CA, CCA, CET, MCSE

Systems Administrator
Shoe Carnival Inc.
(###)######
XXX@###.com

When I corresponded with the former NetApp customer yesterday I found that one of the main reasons for his departure from NetApp’s products was the cost of maintenance and support. Like so many NetApp customers he was looking for an affordable alternative to NetApp’s maintenance and upgrade policies. His email’s last sentence to me yesterday ended with “Maintenance costs played into it as well.”

How long can IBM stay in a low profit business sector? .

NetApp is very proud of its reseller relationship with IBM. And many of our customers have been able to get better deals by getting quotes on identical equipment from both IBM and NetApp. But I always figured it was going to be hard for IBM to make money on reselling NetApp equipment. Therefore when I saw this article in Today’s Wall Street Journal I was not very surprised.

The software deals represent a fundamental reality at IBM: Big Blue’s giant services arm has narrow profit margins, and its core hardware unit is struggling with weak sales growth. But margins in software are fat, and, boosted by deals, sales are growing well.

Will IBM continue to resell NetApp equipment even though it has narrow margins on the resale and service of the equipment? Will they be able to force concessions out of NetApp to get their margins higher? If IBM is able to get bigger margins out of NetApp will the result be lower profits for NetApp?

Interesting times.

We learn from history that we learn nothing from history. George Bernard Shaw….

I was surprised to see that VarBusiness has learned to read NetApp’s history of treatment of the channel and are willing to discuss it in an article.

Why NetApp’s Growth Slowed
Customers are cutting back; NetApp lacks broad channel strategy

The man in charge of NetApp’s channel, Leonard Iventosch, had a decidedly unconventional view of how to populate a partner base to sustain the company’s growth. Whether driven by Iventosch, his superiors or the NetApp culture, which all clearly struggled with the channel, what the company wound up with is a small, loyal cadre of VARs rather than the army it now needs to drive its growth forward. All of its competitors are much further along in their channel development, having realized long ago that they needed to diversify sales efforts, drive down cost of sales and reach new markets.

It seems that some folks are learning from history, NetApp has squandered its relationships with the channel over the last ten years, it is hard to build a loyal channel with their record. And perhaps George Bernard Shaw was wrong – Business people do learn from history when it hits their wallets.

If you can’t describe what you are doing as a process, you don’t know what you are doing. – W. Edwards Deming .

In my college years working on my business degree I studied production and inventory control methods. A few of the courses, and some of the better professors, took the time to explain that Deming was right about quality, but quality is also about relationships and how you deal with customers, vendors and other business partners. I learned in college and it has been reinforced in my almost 20 years in business that developing a process for quality control of a product is a lot easier than developing a process that helps to reinforce our many faceted business relationships.

What we learned was that Deming understood that quality was not just statistical sampling, it was also the understanding of the how and why you build your product or deliver your service, and how you maintain that diligence over time. Creating long term customer loyalty for your company and your product or service is not going to be based on price. In business long term relationship are the key ingredient to building a strong company, and it costs time and money to develop these strong relationships. So when companies stress that they are putting on a sales promotion, or going to beat out the competition for more business I have to ask myself ” is their new business going to be profitable over the long term, or just going to push up their units sold numbers?” If the sales are not profitable for the vendor, eventually business forces will force the vendor to provide less service and support per unit.

Deming taught that “Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them.” This model seems to be working for Zerowait.

Keep your friends close, and your enemies closer. Sun-Tzu

I saw a headline today that made me think that NetApp is really starting to fear the second level storage companies who have a lower cost solution for reliable high availability storage.

3PAR(R) and NetApp(R) Form Joint Interoperability and Support Agreement

Joint customers have identified the dramatic reduction in storage capacity and management costs as the key benefit of the 3PAR and NetApp solution. Traditional datacenter infrastructures often consist of proliferating silos of block and file capacity. With this solution, both capacities can be reduced significantly through consolidation onto a single, massively scalable, tiered-storage pool. This storage pool is based on the 3PAR InServ Storage Server, with direct block access provided by 3PAR and file level access provided by the NetApp V-Series.

NetApp makes a substantial amount of its profits from selling Seagate hard disks and Xyratex storage shelves, obviously if NetApp’s salesman are going to give up the sales of disk and shelves they are going to lose some commission. And most sales folks don’t like to give up their commission to a competitors products. So how will NetApp – which is a hardware sales company going to make up the lost sales opportunities from this deal for its salesman?

Will this be a good opportunity for the 3PAR sales force? It gives them some gravitas, but how can working with a competitor be good for either sales force? A look back will show that NetApp does not play well with past partner companies like Dell, Hitachi and so many others. So it looks like they are taking Sun Tzu’s advice and keeping an eye on their enemy.

If you want to understand today, you have to search yesterday. ~Pearl Buck

NetApp has recently put on a push to engage the channel to help it ramp up NetApp’s anemic sales numbers. In the past, NetApp has used the channel as a missionary sales force and then abruptly pulled the best accounts for themselves, leaving the channel with the sales & market development costs, while taking the profits directly. Eventually the good storage channel companies get wise to this tactic, and don’t do business with folks engaged in this type of strategy.

In his new role, Morris is responsible for all NetApp channel relationships and sales strategies across Australia and New Zealand, including increasing the level of channel engagement, growing the NetApp Platinum Partner portfolio and broadening the business though the NetApp key distributor, Avnet. He is also charged with the task of managing and growing strategic partnerships with IBM and major systems integrators.

As NetApp ramps up its efforts to make friends with the storage channel just remember to read your history. Google makes it all so easy.

What good can come out of an Options probe? Can a company where the Executives are focused on short term personal gain build products that have long term value?

Backdating Fine May Set Model
Brocade Is the First to Pay
Penalty in Options Probe;
SEC Debated Punishment
By KARA SCANNELL
May 31, 2007; Page A3

WASHINGTON — Brocade Communications Systems Inc. agreed to pay a $7 million penalty to settle allegations it improperly issued stock-option grants, making it the first company to pay a fine in connection with the backdating scandal, according to people familiar with the matter.

It seems to me that the stakeholders in this settlement are being hurt in a few ways.
* The executives of companies in this scandal have squandered their ‘trust’ realtionship with their employees in this effort to pad their own wallets.
* Companies that lose their employees and customers trust end up hurting the stockholders, because it becomes harder to sell their ‘value’ to their customers when there is a taint of scandal. A harder sale is a less profitable sale, and it is hard to sell when your executives may be crooks.
* Employees may exhibit discomfort when working with customers who ask about the scandal and what the long term effect on their company & the executive staff might be. Are the executives going to be forced out? What is the transition plan?

As a consumer of technology products, I prefer to deal with companies and executives that take a long term view of their company’s and products’ value. Why should we trust that companies and executives that focus on short term personal gains will create products and support that provide long term value and return on investment? If corporate executives are looking at short term personal profits, will they be concerned with your long range plans? Options scandals have the taint of short term fast buck thinking, not long term value.

NetApp’s stock is in the doldrums – I wonder how long it will be before they reduce staff just like Dell is doing?

TECHNOLOGY ALERT
from The Wall Street Journal.


May 31, 2007

Dell unveiled plans to reduce its work force by 10% over the next year as founder and CEO Michael Dell struggles to revive the PC giant. The news came as Dell posted preliminary quarterly results. The stock surged after hours.   

Cyberwar fiction and reality.

A lot of folks have been writing about the situation in Estonia. I think the graphic above pretty much sums up the situation. People are real concerned about the security of their data, but what happens when your data becomes completely unavailable to your worldwide sales and accounting staff?
Denial of Service software that is easy to get and easy to use, it sounds like the business & world economy may be in for some rough times ahead now that we are all wed to the internet.