Zerowait Corporation

Where do you turn for advice on maintaining your NetApp Storage infrastructure?

Many customers read the marketing and press releases provided by their friendly sales folks. But these documents are heavily weighted in favor of the company that produces them. A lot of IT decision makers read the trade magazines, but many of these magazines are heavily influenced by the advertising and revenue requirements of the magazines. Very few companies actually have the time and budgets required to run a bake off of competing products to see which one actually meets all of their requirements in their production environment.

Most decisions in storage are made with incomplete information on performance and long term costs. The vendor manufacturers know this, and they will low bid the cost to get in the door and open an account to their proprietary equipment, and then they will quickly begin to work on getting a customer to lock in on their proprietary technology. The cost to change storage technology can be quite expensive for an IT department. And this is the gravy train that the vendor is looking for.

So what options does a locked in customer have to rationalize their cost structure and affordably extend the lifespan of their equipment? Expert third party support is one option, and in certain niche markets it is the only option available because of bankruptcies and acquisitions in the highly competitive storage marketplace. For example, third party support in the NetApp marketplace is the only competition to the locked in customer available. Many of our customers keep NetApp support on some systems and use Zerowait for third party support on other systems. These customers feel that keeping some competition in the marketplace will keep competitive pressure on their manufacturer vendor. And they seem to be correct, as NetApp has dropped their support prices to many customers after hearing that Zerowait is in an account.

Avoiding getting locked in to a specific vendor’s technology is the best long term way to keep your storage costs low for the long term. However, if you are locked in to a technology, there usually is a specialty support organization for that equipment.

Keeping up with the news.

Some of our readers have asked us how we keep up with the NetApp news that this Blog focuses on. It is really quite easy using the Google news alerts. We just select the topics we are interested in and Google emails us. But we also read a lot of technical journals, technical mailing lists, and a few blogs also.

Independence Air filed for bankrupcy today.
Analysts said Independence’s failure reflects its own missteps, rather than any fundamental flaws in the low-fare carrier strategy pioneered by Southwest Airlines Co. and imitators.

Terry Trippler, who runs the CheapSeats.com travel website, said in an interview, ”They had too many planes flying to too many cities too often and too low prices. There was just no way they could make money. Fuel prices didn’t help either,” Trippler added, noting that costs soared after this fall’s Gulf Coast hurricanes.

NetApp had featured them in a press release a few months ago.
Since deploying the NetApp solution, Independence Air has realized increased business flexibility and management savings. Even with tripling storage requirements, the company has reduced storage management time and staffing requirements by more than 50% to 75%, respectively. Performance improvements in critical night batch processing have also enhanced competitiveness. “The amount of time it took to complete one particular operation fell from two hours to 45 minutes,” said Hughes. “This improvement directly impacts the ability to complete routine maintenance on schedule and to keep our planes flying on time.”

Commodity parts clarification by NetApp.

See business week article
The “state of the shelf” strategy has to do with how the systems are designed and what components we use. We have never designed a custom semiconductor or ASIC. Most other storage manufacturers have several ASIC’s in each system. EMC’ systems have quite a few.

Most of our hardware sub-assemblies are also sourced from other manufacturers. Our disk shelves and packaging are sourced at Xyratex, a company based in the UK. The system mother boards and chassis for our FAS900 series were co-designed and are manufactured by NEC who sells tham as Wintel servers. The I/O cards such as the Ethernet NICs and FibreChannel HBA’s are standard cards from suppliers such as Q-Logic.

However, the system we take to market is uniquely NetApp. Part of our business practice is that all elements of the system must be purchased from NetApp by the customer. We do not allow or support the introduction into our systems of components or disk drives purchased from sources other than NetApp. There are several reasons for this policy (including revenue), but the primary reason for this policy is quality and support. Our systems are hihgly tuned high performance systems that require careful quality control of the components to function properly and reliably. Every time we have allowed customers or partners to plug in components or disk drives from other sources we have significant reliability issues. And when an issue occurs we are not able to provide support because we do not know what is in the system.

So the components and sub-assemblies are “state of the shelf”, but the way we put them together into a system is part of our value add.

What makes NetApp a commodity product?

commodity-A generic, largely unprocessed, good that can be processed and resold. Commodities traded in the financial markets for immediate or future delivery are grains, metals, and minerals. They are generally traded in very large quantities.

An astute reader sent me a question related to the business week article on NetApp. Here is the quote that the reader questioned.

NetApp is not only notching hefty sales (expected to hit $2 billion in fiscal 2006) but it has also managed to maintain sky-high 60%-plus gross margins, despite building its gear with commodity, off-the-shelf parts.

And here are his comments related to the article.

How can NetApp claim to be made from  commodity 
parts when the Xyratex DS 14 shelves,
drive canisters, ESH, Power supply and motherboard
are all proprietary. The Intel processors  and
the Seagate drives are commodity parts, but you
just can't put an off the shelf drive into a NetApp
system and expect it to work. 

How is NetApp any less proprietary a system then EMC?
To call a NetApp filer a commodity system is absurd.

Perhaps NetApp has a different definition of commodity ?

Data performance figures that you can trust.

Jon Toigo, wrote an excellent piece for Byte and switch . I really suggest that you read it. He speaks about how storage decisions are reached in a world of incomplete data. Whether it is intentional or not, it is almost impossible to get repeatable figures on Data Storage devices. So the only information that a rational decision maker can use in making a storage purchasing decision is through vendor’s marketing, and friendly user experience. For obvious reasons, storage vendors provide reference accounts from companies with marquee names, and positive experiences.

Doing research on the web allows decision makers to learn more about the user experiences other customers have had, but it is hard to find reliable information on negative experiences with a storage vendors software or hardware. What a storage researcher gets is a heavy dose of a storage vendor’s marketing information, and some positive experiences from a few selected customers.

As an independent vendor of NetApp equipment we can provide our customers information about which products work best together and how to extend the duty cycle and life cycle of their NetApp products. We don’t sell new NetApp equipment, so we are not held back from speaking our minds about the performance of the newest models as compared to the superseded model. We make no money at all if our customers buy new NetApp equipment.

Providing unaffiliated NetApp service and support allows us to provide best of breed solutions to our customers, and to give an unbiased opinion when it comes to their NetApp buying decisions. Many customers send us their quotes for review from NetApp and their resellers. We suggest configuration changes and tell them about the market prices that we are seeing at other accounts. For instance, just the other day a customer called us up and asked about the discounts he said he was receiving from NetApp. NetApp told them they were 75% off list price. I pointed the customer to some websites that list NetApp’s prices and told him to do some research on the price quote he received.

Carefully review the performance figures that are being touted when you are looking at your equipment. Ask for verification of the performance figures, ask for license transferability, read their software contracts carefully. Don’t be afraid to negotiate with NetApp, give us a call if you want some tips..

Businessweek has another interesting article on NetApp.
Here is the link http://www.businessweek.com/technology/content/dec2005/tc20051227_828715.htm

Here are some interesting links:

People who know you know that you’re outspoken on the topic of stock-option expensing. What are some of the other issues you feel passionately about?
Sarbanes Oxley. It may go a long way toward increasing shareholders’ confidence in Corporate America, but it won’t diminish fraud and other types of unethical behavior. New controls will just be abrogated the same way the old ones were.

Look at MCI and Enron. They’re not being prosecuted based on new code. Those cases are based on laws that were already in place. So I really think it was a futile effort to try to legislate business ethics. And it has had a set of consequences that aren’t helpful. For example, I used to have a much closer consultative relationship with our auditors, but you really can’t do that anymore. You almost need a separate team of financial consultants so you can then go to your auditors and say, “Here’s where we stand.”

You shouldn’t be able to control your auditors, but you ought to be able to ask their opinion — to ask, “Is this something you’d support, or that you’d have a problem with?”

We used to do that all the time. Instead, our audit fees have doubled [since SOX was implemented], and the value derived has halved. So I think SOX took a terrific 10-year relationship we had with Deloitte & Touche and made it far less productive.

Is SOX an isolated problem, or is there a larger concern?
I think the whole attitude toward business in America these days is still suffering from the abuses of the bubble period. But the long-term consequences are that we will diminish America’s competitiveness. You can see it through the brain drain. If you can’t get the big options package here — well, they don’t have that problem in India or China. So I’m not sure the American people and politicians are thinking about this as a global issue.

I personally think we’re heading right down the same track Europe has been on. They’ve got great education [systems] and excellent people, but name a successful European computer company? They’ve dampened the entrepreneurial spirit and the opportunity to create a highly successful enterprise. So my fear is that we’re going to end up pushing a lot of investment and entrepreneurs to other countries that we really ought to be considering our competitors on the world stage. I’m glad I had my era when I did, because my son’s era is going to be a lot tougher.

But isn’t that a cop-out? You and other tech CEOs in your 50s have made your money, and yet you’re for the most part just pointing to the problems rather than offering real solutions. Shouldn’t your generation of CEOs be doing more?
You’re right. I’ve made my money, and I can live happily after. But I don’t think we’re empowered to stand up. That may be a cop-out. But the attitude toward business is still pretty negative, particularly toward tech.

Perhaps Mr. Warmenhoven should read some Adam Smith to get some perspective for his views of capitalism.
“Every individual…generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”

There is a very interesting article in Business week about NetApp, that is worth reading.

Here is the link – http://www.businessweek.com/technology/content/dec2005/tc20051227_204146.htm

I think the following pieces are very interesting.

Indeed, NetApp has gone on to dominate the red-hot market for so-called network attach storage (NAS) gear — and in the process create the only significant new hardware company of the last 15 years. NetApp is not only notching hefty sales (expected to hit $2 billion in fiscal 2006) but it has also managed to maintain sky-high 60%-plus gross margins, despite building its gear with commodity, off-the-shelf parts. And it has done it all while brushing off offensives from far larger companies, such as Microsoft (MSFT) and EMC (EMC), which many felt sure would mark NetApp’s doom.

While Cisco designs many of its own network processors, NetApp’s hardware uses chips from Intel and others. “We’re state-of-the-shelf, not state-of-the-art,” he says.

The article does not ever state what NetApp’s CEO thinks of creating long term customer relationships, the article never discusses NetApp’s sales strategy of End of Lifing products to force customer upgrades.

“Genius is one per cent inspiration, ninety-nine per cent perspiration.” Edison

Working with our staff and customers on problems we often find that Edison was correct. What has puzzled us for quite a while is why it seems that in Benjamin Franklin’s time, inventors were younger than they seem today. But here is an article which I have linked to that seems to explain why this may be. I suggest reading the complete article, it is not very long.

Innovative thinkers are innovating later than they used to. While conventional wisdom holds that creative thinkers do their best work when they are young, a study by NBER researcher Benjamin Jones shows that over the past century the average age at which individuals produce notable inventions and ideas has increased steadily.

Jones notes that, unlike athletes, who do not require increased training demands over time, innovators appear to spend increasingly significant portions of their early years in education – a kind of human capital acquisition that might well explain the age trends in his study. Because the rules and requirements of their fields of endeavor remain fixed, athletes are not obliged to increase their human capital; accordingly, the data show no distributional shift in the ages of top athletes over the years. But thinkers must increasingly invest in acquiring intellectual capital, and the accumulation of knowledge – the rising distance to the frontier – can explain increased educational attainment.

Jones notes that economists have not focused much on the human capital investments of innovators. Because innovators customarily devote their youngest and perhaps brightest years to acquiring their education, understanding the tradeoffs at the beginning of the life-cycle may be of primary importance for understanding the ultimate output of these individuals – and for understanding why great innovation is steadily declining among younger thinkers.

Have a great holiday!

They say the world has become too complex for simple answers. They are wrong.
Ronald Reagan

In storage, I see no end of hard problems. I see customers’ data growing, and I see customers worried about consolidating, operating and protecting increasing amounts of data. I see the burden of ownership for data getting worse as businesses rely more and more on the data they own, and as the legal requirements increase to keep data accessible yet private. No end of problems in sight. Dave Hitz

Will Storage and Network Technology make it easier or harder in the next few years to manage and secure your data storage? As technologies standardize storage and security will certainly get easier, specialty niche markets will develop on new technologies and entrepreneurs will jump into these new niches and develop businesses based on them. My prediction is that entrenched vendors will fight to maintain their profits in their business lines, and slowly markets will be taken away from them by lower cost solutions.

Listening to your customers is the best way to assure that any business can continue, for any business today must evolve with its customer base, and watch for new niches as they develop. Toigo Partners and Zerowait are having an exclusive storage roundtable in a few weeks to discuss storage economics & business, we will report back on the trends we foresee developing.

From – Investors Business Daily “Following the herd is a sure way to mediocrity”
Why are all the storage vendors getting into security?

Is your NetApp filer’s data worth $5.00 a day? If your business depends on your data it probably is. Ask Zerowait if you are concerned about your filer’s performance and security, and how for $5.00 a day you can sleep at night.

“I didn’t really say everything I said.” Yogi Berra

This NetApp Press release seems to contradict the NetApp statement that follows it: How can something win a best product in 2003 and be introduced in 2005? The FAS250 seems to have done so.

Sunnyvale, Calif. – November 5, 2003 — Network Appliance, Inc., announced today the FAS250 has been named as the Best Product in the online hardware and management software category at Forum Stockage 2003 in Paris. This is the second year that NetApp has been honored, with the FAS900 winning the special award for Innovation in 2002. This international exhibition is dedicated to all aspects of storage and data protection and is one of the most important European events in the storage industry.

But today we learn that the FAS250 was released this year.
NetApp’s product line-up has been strong. Informs Thomas, “The entry-level FAS 250 and FAS 270 which debuted this year made a big contribution to our growth.”