Zerowait Corporation

“We’ve been NetApped!”

That is what our customer said, and it was not a compliment from the tone of his voice. As I found out more I learned that their NetApp salesman had shown him numbers that proved that buying new NetApp equipment was cheaper then buying continuing service and support from NetApp. An associate in another division of his company had told him to contact us, and he was rather upset that he did not ask us for a Zerowait support quote prior to buying his new NetApp hardware. After learning what his company paid for their NetApp hardware I joked around and asked what kind of car the sales guy purchased with his commission. After a few minutes of laughing we agreed that NetApp’s proprietary solutions carry hefty commissions!

When I have conversation like this I always think back to a conversation I had with a large Delaware based company’s CIO . He told me that he has to always look at the cost of new technology and compare it to how many people’s work it will save. He would rather have talented people on staff, and if he could shave dollars from his hardware costs he could keep his staff. There was only so much budget available and people or hardware was the decision he had to make. By purchasing support from Zerowait his company was able to affordably maintain his high availability systems without destroying his highly respected engineering staff.

NetApp has great technology, and Zerowait can help you support, maintain & upgrade your NetApp equipment for a reasonable cost.

Another Early Adopter gets rid of their NetApp .

August 17, 2006 — NASA’s Solar Data Analysis Center is changing out its network attached storage (NAS) from Network Appliance Inc. for what it described as a more agile set of arrays from Pillar Data Systems Inc. to make it easier for the organization to study the sun.

If only that this NASA division had called us, we could have helped them grow their NetApp Storage, shrunk their footprint, and improved their performance without breaking their budget. And maybe saved the taxpayers some money!

Pillar’s sales force seems to be doing the missionary sales work and chasing after the early adopters of storage technologies. NetApp uncovered a market need in the mid 1990’s, but are they nimble enough to recognize, implement and execute on a plan to fight this hungry and well financed newcomer to the marketplace? Perhaps their StoreVault product is a distraction from their main business, have they lost focus already? But NetApp does not seem to be addressing Pillar directly yet. Oracle is a big NetApp customer but there are direct ties between Oracle and Pillar.

Recognizing that Zerowait has a rapidly growing North American and EMEA customer base some NetApp competitors have approached us to help them market their products recently. We have seen some really interesting and innovative technologies that will reduce customers overall cost of storage in the past couple of months. But we have not seen a value proposition yet that approaches what we can provide our customers yet on maintaining, upgrading and providing service and support for their NetApp equipment.

Follow the Options

Nearly 100 years ago Teddy Roosevelt said “A man who has never gone to school may steal from a freight car; but if he has a university education he may steal the whole railroad.”

In the Enron scandal there were a bunch of well educated guys who were able to play games with the books and the rules of accounting. And it is worth watching this film clip to get a sense of that scandal The smartest guys in the room film clip

The current SEC Options investigation is stirring up Silicon Valley, but these types of things unfold at their own pace in the media, based on other news events. Putting the pieces and connections together from the media reports makes it very hard to follow or make sense of for me. How big will the expanding SEC Options investigation get? Jon Toigo has some thoughts.

“Follow the money,” was the memorable quote from All the President’s Men. Deep Throat advised Bob Woodward that the key to understanding the Watergate mystery was the money.

Dave Hitz of NetApp considers Lock In to be a natural state of things with a fast evolving technology.
The root cause of vendor lock-in is lack of standards and interoperability. Standards don’t tend to emerge when innovation is fast. And innovation tends to be fast whenever customers have unsolved problems that make them unhappy. In the storage industry today, I see unhappy customers driving lots of innovation that makes it hard for standards to keep up. I predict that this cycle of unhappiness and innovation will continue for a while, because the problem keeps getting harder: installed storage capacity keeps doubling, and data keeps getting more business critical.

By the way, Hal Varian said in 1998 that lock in is going to get more prevalent. So Dave is not breaking any new ground here. I wonder if Dave knows Hal Varian?
Whether you supply information technology, or merely use it, you will benefit from understanding, classifying and measuring switching costs. The “friction-free” economy is a fiction; look for more lock-in, not less, as the information age progresses.

What is interesting is that in some respects they both miss an important component of lock in – Customers want value for their investment.
That is why Zerowait keeps adding customers for our NetApp Service, parts, upgrades and support business. Zerowait provides extraordinary value to the customer that their high priced OEM will not provide – (I get to toot my horn in my blog !). Another place where you can see customers striving to get better value out of their Storage investment is at the Toasters mailing list (toasters.mathworks.com) of NetApp users. There you will find all sorts of tricks on how to get more value out of your NetApp storage investment.

Are you fighting the vendors’ need to lock you in, or are you working toward creating an open and free market for storage equipment? Dave Hitz is a great guy, but he is a big shareholder of a company that profits on locking in customers to his equipment. Vendor Lock In is also a root cause of Vendor Myopia. Just look at that other fast growing company from Sillycon valley – SGI. They missed an obvious seismic change in the marketplace because they considered their customers locked in. In many ways, Sun’s troubles arealso because they considered Linux a toy that no Fortune 1000 company would use. Both SGI and Sun learned that Innovation can cause havoc to a Myopic business plan.

A simple way to fight NetApp lock in on price is to get quotes on the same equipment from IBM. Off The Record Research says that in Europe Customers are getting bids from both IBM and NetApp . Or give us a call and we will explain how to negotiate better prices and terms from NetApp.

Innovators recognize that Vendor Lock In is a cancer that kills innovation.

As Deep Throat said ” Follow the Money”