Chuck Hollis of EMC on NetApp marketing techniques.
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NetApp: Bad Marketing vs. Good Marketing

All is fair in love, war and marketing. Or is it?

Do we, as vendors, have a responsibility to our customers and the marketplace that when we make a claim, that it is generically true, and customers get the benefit we promise?

I believe so.

I believe so strongly, in fact, that I’m taking it upon myself to call out others who may not subscribe to this particular world view.

Context

If you promise a customer that your solution is more cost effective, it shouldn’t end up being more expensive. If you say your solution is simpler, it should not be more complex than what it replaces. If you say its high availability, it should be. If you claim superior performance, that is what it should deliver. And so on.

Deliver on the promise: Good Marketing

Fail to deliver on the promise, or deliver the opposite: Bad Marketing

A few weeks ago, I took the gloves off on a particularly egregious example of Bad Marketing, where NetApp had pushed the limits of benchmarketing too far; to the point where it could probably result in the exact opposite of what was promised.

That’s bad for customers, and bad for the industry.

Now, to be clear, I have no problem with head-to-head competition. I welcome it. It makes all of us in the vendor world better, and it ultimately benefits customers. And I love the rough-and-tumble, he-said-she-said world of IT marketing. It’s fun.

But clear misrepresentation – in spirit, if not in fact – is where we should all draw the line.

Today, I’m going to go a bit further on NetApp on some of their other marketing claims. Not because I don’t welcome an aggressive competitor (I do, believe me), but I cringe when I find people actually believe what they’re saying, and get hurt in the process.

Seductive Claim #1 – NetApp Is Simpler

This is very sexy, at least on the surface.

The premise is that – because NetApp has one primary operating system (ONTAP), and one generic hardware architecture (dual controller storage), that customers can serve all their storage needs with a single, compatible family, saving considerable operational expense.

Damn, that sounds great. Doesn’t it?

Now, if I’m a smaller shop, and my requirements aren’t that demanding, I’d give NetApp the benefit of the doubt. I certainly have met smaller customers who could conceivably run their entire shop on NetApp if they limit what they do.

But let’s look at the facts. There are tens of thousands of customers who’d never consider putting a critical database on an emulated SAN device like NetApp – it’d kill their performance. What happens when a small customer needs that capability, and has to put something different in to do that job?

The simplicity promise is now gone.

Or maybe their environment grows and they find they need more powerful SRM tools, which NetApp doesn’t provide. Or perhaps they find shortcomings in remote replication, or other areas.

Bring in other stuff, and the promise is broken.

As an example, all NetApp customers are now being “strongly encouraged” into a very disruptive upgrade to ONTAP 7G. Usually, there’s new hardware involved, and it involves substantial downtime, unless you use something clever like Rainfinity.

Now, certainly NetApp isn’t the only storage vendor that does this to customers, but it goes right against NetApp’s promise of “simplicity”.

Are there any meaningful performance tuning tools in ONTAP? Not really, that would add complexity. Want to do VTL? That’s a different NTAP storage platform. Want to do encryption? Decru isn’t integrated. Want to do CDP? That’s Topio, also unintegrated.

Nothing wrong with any of these things, really. Other than NetApp promised simplicity, and most customers end up with complexity. And that’s Bad Marketing, in my book.

Don’t promise what you can’t deliver.

Seductive Claim #2 – NetApp Uses Less Storage

NetApp gets to this claim two ways.

First, they point to thin provisioning as using less storage. Actually, thin provisioning helps solve certain poor storage management practices that are common in IT (see here for more info) but comes with its own – ahem – complexity.

And thin provisioning is not unique to NetApp – if after evaluating the pros and cons, you want to do thin provisioning, there are lots of vendors (including EMC) who can do that for you.

Second, they point to a low-overhead snap capability that doesn’t actually make the second copy until it’s written to. Nice trick, but also available from other vendors, including EMC. And, of course, there are pros and cons with different use cases when this would make sense, and when it wouldn’t. It’s not a panacea, and it’s not unique.

Nothing wrong with having competitive features compared to other vendors. But to claim that you use less storage than the other guys basd on these claims simply isn’t true, and isn’t supported by the evidence.

I would offer that, in our experience, exactly the opposite is true, in two ways.

First, as many people have noticed (and I’ve pointed out) the only reasonable way to address a performance problem on a NetApp filer is to add more unused storage. When we get called in to solve a performance problem on NetApp, we usually notice that the customer has taken this step, and is using much more storage than would otherwise be needed, simply to present more spindles to ONTAP and WAFL.

Second, EMC has built a nice practice of going into large NetApp shops, running some simple analysis, and showing customer by either deleting or archiving the gorp that’s sitting on their filers, they can use 40-70% less storage.

Put differently, because NetApp doesn’t offer the tools or the practices to do this to their customers, we find that unmanaged NetApp shops use far more storage for file storage than is usually required.

Now, these are not bad things by themselves, but a claim was made for a benefit, and the exact opposite is usually true.

Once again, Bad Marketing in action.

Don’t promise what you can’t deliver.

Seductive Claim #3 – NetApp is the Preferred Choice for Oracle

After reviewing some of the NetApp marketing materials, you’d think that Oracle wouldn’t be able to run on anything else. I run the alliances group at EMC, so I have a bit of an insider perspective on this.

NetApp spends big bucks every year sponsoring Oracle Open World. Well over a million dollars a year, I believe. Oracle really appreciates this money for their event, and reciprocates by saying very nice things about NetApp.

Nothing wrong with that – heck, I enjoyed watching Sir Elton John at OOW this year, as did many of you. The food was pretty good, too.

NetApp also did a great transaction a while ago with Oracle’s Austin Data Center where they run their outsourcing business. I’m not privy to the exact details, but there seems to be an exchange-in-kind where Oracle got a great deal on hardware, and NetApp got a great marketing reference. The result is a slick video where Oracle people running Austin talk about how great NetApp is.

All part of the normal give-and-take that sometimes goes on. Here’s what you might not know …

So, what does Oracle run their production systems on? The ones that keep their company running? Their email? The majority of their development environment? The gigantic Oracle Single Instance at the very heart of their company?

EMC.

So, back to the theme. I’d agree that NetApp is Oracle’s preferred marketing partner in the storage world these days, but there’s a far stretch between that financial arrangement and the one NetApp is claiming.

Again, Bad Marketing in action.

Seductive Claim #4 – NetApp Is An Enterprise Storage Company

This one makes no sense to me whatsoever. There’s a big difference between selling storage to large enterprises, and being an enterprise storage company.

My company (a large enterprise) buys memory sticks from a small company. Does that make them an enterprise storage company too?

More specifically, do companies trust NetApp with their most mission-critical applications? Do they have the robust architectures, backed up by expensive service and support capabilities? Do they have experience in some of the most demanding IT environments in the world?

I’m OK with NetApp claiming that they sell to large enterprises, because they do.

Usually it’s test and dev environments, or maybe a large file farm, or something else that isn’t deemed mission critical. And, trust me, they do a very good job selling to places where they’re good, and staying out of environments that they don’t do well in.

But – please – don’t torture that statement into positioning yourself as an enterprise storage company. You folks haven’t made the investments in products, testing, service and support to back up that claim.

Someone could get hurt.

Bad Marketing in action, again.

Seductive Claim #5 – NetApp Products Offer Superior Performance

I won’t rehash this one again (see here), but – once again, we have Bad Marketing in action. One thing is promised, and the exact opposite is usually true.

Bad Marketing In Perspective

Now, to be fair, I’m picking on NetApp pretty hard here. They’re big boys, they can take it. Heck, they dish out plenty of dirt to EMC, so they must expect a bit of a rebuke regarding their business practices. And the practice of Bad Marketing is hardly limited to NetApp.

And you may be thinking – is EMC any better in this regard?

I sit on several marketing review committees, and we try – as hard as we can – to make sure that if we claim something in our marketing material, that we can back it up, and – more importantly – we’re not leading people into the exact opposite outcome. We’re not anywhere close to perfect in doing this, but we consider it very important to make a consistent effort in this regard, and to try to get better.

My real beef is that I don’t think NetApp is even trying.

The real question – for all IT vendors — is what’s the goal here?

Is it to grow the stock price by showing strong growth and numbers?

Or is the goal to build a franchise built on serving customers needs, and building trust?

I would offer that – in the long run – they would ideally be the same thing. I just wish more people felt that way.

Certainly, customers would be better served.

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What percentage of your corporate storage is Spam?

The volume of spam rocketed in December to account for a record 94% of all Internet-sent e-mail during the month, a message security company said Wednesday.

“This continued rise in spam levels is threatening the viability of e-mail for businesses and is sapping the productivity of hundreds of millions of workers around the world,” said Daniel Druker, Postini’s executive VP of marketing, in a statement.

The portion of e-mail that Postini pegged as spam reached 94% in December, an all-time record. The company blocked 25 billion spam messages aimed at 36,000 clients that month, an increase of 144% over the same month in 2005.

Good question and you can’t trust the statistics.
“There are three kinds of lies: lies, damned lies, and statistics”.’ Disraeli


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Why does NetApp charge so much for their equipment?

I get asked this all the time, and the answer is based on many factors but mostly it is because the market perceives a NetApp label to be worth more than the Seagate label, Intel label or Qlogic label. NetApp hardware is based on Common Off The Shelf equipment. Except for a few proprietary parts made by some of their contract manufacturers. The major value of their systems is in their software “OnTap” . However, thanks to transferable licenses you can buy this software at a deep discount. We can help you do this!

Customers can get deep discounts on NetApp hardware and software by shopping around . IBM discounts NetApp hardware and software substantially, and NetApp has been quoting their systems at levels of over 40% to many customers according to some of the quotes that we have seen recently from customers.

Some things never change ! If 2007 is the year you want to reduce your costs of NetApp acquisitions, get competitive quotes! Call us we will show you how!

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Hitachi announces the arrival of 1TB drives.

A 1TB hard drive for $399 is likely to be an instant hit among early adopters and video pros. That price translates to about 40 cents per gigabyte, or 0.04 cents per megabyte. Compared to Seagate’s 750GB Barracuda 7200.10 drive—which comes out to about 60 cents per gigabyte and 0.06 cents per megabyte ($349.99 from Amazon)—and the 500GB Hitachi Deskstar 7K500—about 42 cents per gigabyte and 0.042 cents per megabyte ($209.95 from Amazon)—the DeskStar 7K1000 offers a slight value over the currently available competition.

Consider the implications to the enterprise raid manufacturers like EMC and Netapp of this announcement. Mirroring drives will provide redundancy and the price point will be extremely low. So NetApp and EMC will have to really ramp up the value of their features or get into other markets. Perhaps this is why they are pursuing every related market there is?

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Has California Seceded from the United States and joined the European Union?

RoHS Regulations Adopted and DVD Players with LCD’s Covered

On December 29, 2006 the California Office of Administrative Law (OAL) approved California regulations implementing RoHS, and adding DVD players to the list of electronic devices that are presumed to be hazardous wastes when discarded.

As mandated by the Electronic Waste Recycling Act of 2003, as amended, and pursuant to section 25214.10 of the Health and Safety Code, one of these regulations adds section 66260.202 to title 22 of the California Code of Regulations, and became effective January 1, 2007. This new section restricts the use of certain heavy metals in “covered electronic devices” (as defined in Public Resources Code, section 42463 (f).

Pursuant to this new regulation, “no person shall sell or offer for sale in California, a covered electronic device if the device is prohibited from being sold or offered for sale in the European Union on or after its date of manufacture due to the concentration of one or more heavy metals in the device exceeding its maximum concentration value.” This sales prohibition, also known as the California RoHS regulation, applies to all “covered electronic devices” manufactured on or after January 1, 2007.

The other regulation became effective on December 31, 2006, and adds portable DVD players with liquid crystal display (LCD) screens greater than four inches measured diagonally to the list of electronic devices that are presumed to be hazardous wastes when discarded (California Code of Regulations, title 22, chapter 11, appendix X, subsection (c)).

As a result of this listing, portable DVD players with liquid crystal display (LCD) screens greater than four inches measured diagonally are “covered electronic devices”, as defined in Public Resources Code, section 42463 (f), and are subject to all provisions of the Electronic Waste Recycling Act of 2003, as amended. Beginning on July 1, 2007, any retailer that sells or offers for sale in California, portable DVD players with liquid crystal display (LCD) screens greater than four inches measured diagonally, is required to collect a recycling fee pursuant to Public Resources Act, sections 42464 et seq.

As a result of this listing, portable DVD players with liquid crystal display (LCD) screens greater than four inches measured diagonally that are manufactured on or after July 1, 2007 will also become subject to the California RoHS regulation specified in section 66260.202 in title 22 of the California Code of Regulations.

More information can be obtained by contacting DTSC, or through the following websites:

http://www.dtsc.ca.gov/HazardousWaste/EWaste/index.cfm

http://www.dtsc.ca.gov/LawsRegsPolicies/Regs/DVD_Emergency.cfm

http://www.dtsc.ca.gov/LawsRegsPolicies/Regs/Heavy_Metals_Emergency.cfm

Reminder: DTSC To Hold Workshop On Notification And Annual Reporting Requirements For Handlers And Recyclers Of UWEDs And CRTs

The Department of Toxic Substances Control (DTSC) will hold a training workshop to cover DTSC’s new online reporting system designed to streamline submittal of notifications and annual reports required by persons engaged in the collection, handling and/or treatment of Universal Waste Electronic Devices or CRT Materials.

The workshop will cover existing notification and annual reporting requirements. A demonstration of DTSC’s new on line reporting system will be conducted. The new system will benefit handlers, collectors and recyclers by providing a means to electronically manage and report data required to comply with notification and annual reporting requirements.

The workshop will be held at the following time and place:

January 12, 2007

10:00 AM – 12:00 PM

CalEPA Headquarters

Coastal Hearing Room

1001 “I” Street, 2nd Floor

Sacramento, California 95814

More information is available at:

http://www.dtsc.ca.gov/HazardousWaste/EWaste/upload/E_Waste_Training.pdf

Reminder: CEW Payment System Final Regulations in Effect Now

Please note that final regulations governing the CEW payment system were approved by OAL on November 27, 2006, and have been in effect since that time. The California Integrated Waste Management Board encourages all participants in the CEW payment system to familiarize themselves with all provisions.

The CEW payment system regulations and enabling statutes can be found at:

http://www.ciwmb.ca.gov/Electronics/RegIssues/

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Security, Storage, and Delaware’s Senator Carper

Earlier this year Senator Carper was the ranking member of the Senate Committee on Homeland Security and Government Affairs. Perhaps he now will become the committee chairman. Senator Carper has been focusing on Data Security, and in a world where Google is cataloging everything this is something we should all be concerned about. In the book 1984 Orwell‘s Big Brother was the totalitarian Government. It is strange to see that in today’s reality it is Silicon Valley companies that are becoming Big Brother .

“We used to just worry about people breaking into our homes or stealing our cars, but in the 21st century, we have to worry about people stealing our identities via computers and the Internet,” said Sen. Carper. “Given what we’ve seen happen recently with security lapses at the Veterans Administration and other financial institutions, it’s imperative that we write a national law to help protect consumers from being victims of identity theft. This bill would require all financial institutions, retailers and government agencies to maintain strong internal safety protections for the data they hold, to quickly investigate any security breach, and notify law enforcement, regulators and the public when there’s a real risk of harm.”

Data Security and in particular disk drive security is something the engineers at Zerowait know a lot about. In the coming year we look forward to seeing what develops in this arena. Will it be government or private enterprise that protects your privacy in the future?

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First they ignore you, then they laugh at you, then they fight you, then you win. – Gandhi

1) It was only a few years ago that people were telling us that it was impossible to develop a third party full service NetApp support organization.

2) As we picked up our first customers the NetApp sales folks would tell our new customers that there was no way that we could provide long term service and support contracts and 24/7/365 .

3) When we picked up customers like HP, CSC, IBM, RBS and many other strategic accounts NetApp started to notice us and their salesman would try to meet or beat our pricing, service and support levels.

4) We doubled our sales in 2006 and now we have a service depot in Manchester, England and we are looking to open one in Asia in 2007.

Have a great holiday!
Your friends at Zerowait.

More Bad news for Morgan Stanley
The National Association of Securities Dealers (NASD) has accused investment house Morgan Stanley of lying that millions of emails it possessed were lost in the terrorist attacks on the World Trade Center.

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The more things change the more they stay the same

Recently while at the SNW show in Orlando, I heard that NetApp was switching its shelf supplier from Xyratex to Dot Hill. When NetApp shifted its purchasing from Eurologic to Xyratex it was the root cause of Eurologic going out of business. Currently, NetApp represents about 50% of Xyratex’s business. That is a big chunk of business to lose.

Sticking with your strategic suppliers and building long term relationships is something that most companies profess to admire. NetApp says it wants its customers for the long term. Why would a company that professes its strategic relationships to its customers act tactically with its own suppliers? Can a company so focused on its own short term profits provide long term value to its customers?

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Silicon Valley where Politics and Venture Capital Mix

It is always interesting to see who is contributing to Congressional representatives and see if it influences their votes. Silicon Valley’s representive seems to be a favorite of the Venture Capital firms. Interesting? You decide.

MIKE HONDA (D-CA)
Top Contributors

1 National Assn of Realtors $10,000
2 Laborers Union $8,500
3 Air Line Pilots Assn $7,500
3 Intl Brotherhood of Electrical Workers $7,500
3 National Venture Capital Assn $7,500
6 International Assn of Fire Fighters $7,000
7 Acorn Campus $6,200
8 Assn of Trial Lawyers of America $6,000
8 Ironworkers Union $6,000
8 Operating Engineers Union $6,000
8 Opnext Inc $6,000
8 Transportation Communications Union $6,000
13 Mele Assoc $5,848
14 Credit Union National Assn $5,500
15 McDonalds $5,100
16 American Federation of Teachers $5,000
16 Johnson & Johnson $5,000
16 National Air Traffic Controllers Assn $5,000
16 Service Employees International Union $5,000
16 Teamsters Union $5,000
16 United Auto Workers $5,000

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How long do you want your data archive to be readable?

One of our friends just told us that NetApp will not allow their R100’s to run anything above Version 7.1 of Ontap. Is this true?

Can NetApp’s Nearstore line be considered a longterm solution ? Archiving should inherently be for a longer period than 3-5 years. Isn’t that what the regulators require in HIPAA & GLBA and SARBOX?

Zerowait will have the parts for these systems for many years to come so our customers can remain in compliance, but will NetApp, their software vendor, make their newer systems backwards compatible?

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