Zerowait Corporation

Perhaps the reason that NetApp’s sales slumped last quarter may be because NetApp’s consumers took a look at the performance numbers of NetApp’s new units and saw that there is not much of a reason to purchase a new unit? Zerowait recently reviewed NetApp’s published performance numbers on their new FAS3020 and found that there was not much reason to buy a new unit as compared to buying additional storage for an older unit. I can tell you that our sales of add on storage for NetApp systems has been very strong lately.

According to NetApp’s CEO, ‘Warmenhoven says customers took longer to evaluate NetApp systems last quarter following the rollout of new FAS3000 Fibre Channel-plus-SATA systems”
Warmenhoven deos not mention that there are now four sales channels – NetApp Direct, NetApp Resellers, IBM Direct and IBM resellers – all selling the same unit. So savvy customers will shop around for the lowest price. Customers know that price is the only differentiator, all of the service and support is identical. As every salesman knows, it is very hard to differentiate added value for the identical product , service and support.

Perhaps NetApp is so aggressively purchasing other companies because they realize that the profits in storage are going to decline as it continues its trend toward commoditization. I certainly wish they could clearly define a 3 to 5 year corporate strategy, because our customers are trying to optimize their storage purchases based on a consistent vision from their storage providers.

No matter which side the pendulum swings toward within NetApp, our customers can depend on Zerowait to provide affordable service, support and upgrades for their legacy NetApp equipment.

What is on your Radar?

Most of our customers are looking at Capacity Utilization & extended ROI on equipment. It does not seem to matter if the customer is a small company or a Fortune 100 company, they want a better ROI picture at purchase and throughout the product lifecycle. However, most of the storage vendors are trying to sell our customers new systems with higher capacity or trying to switch the pardigm on them and bundling options they don’t need into their storage solutions.

What is on your Storage Vendors’ Radar?
It seems that most storage vendors are concerned with Storage Security by the press reports we see and the corporate merger activity. Here is a sample from Byte and switch

Byte and Switch News Analysis: EMC Casts Wider Net AUGUST 04, 2005 – Plans to get into net resource management and burrow deeper into security

Byte and Switch Newsfeed: Permabit, NorthSeas Form Archive Pact AUGUST 02, 2005 – Partnership combines NorthSeas’ Guard E/N (pronounced Guardian) with Permabit’s Permeon Compliance Store for simplified email archiving

Byte and Switch News Analysis: VCs Add $15M More to Data Domain AUGUST 01, 2005 – Expects latest haul to take it to profitability but must navigate maze of competitors

Byte and Switch Newsfeed: Unitrends Supports Evaults AUGUST 01, 2005 – Unitrends announces its line of Data Protection Unit network storage appliances now offer companies the ability to electronically vault data from or to offsite locations

What is on Zerowait’s Radar?
Zerowait is focusing on providing our customers with affordable service, support and upgrades for their Storage infrastructure. After all, it is what our customers want most of all.

Is NetApp’s FAS3020 faster than their old FAS940, what about the F840? Pursuant to a customer request I went to www.Spec.org to check the results of their testing to see if I could provide our customer the best unit for his budget and performance requirements.

Their testing results are very revealing, and if you look carefully at their testing
parameters, it seems that the 3020 was given a lot of advantages in the testing. The new FAS3020 compared to the FAS940, has over a 40% faster processor and twice the NVRAM, it was tested on a Jumbo Frame network and they increased the RAID set size. More drives typically represents better performance for a database. However, even with all of these advantages the 3020 was only able to handle about 3% more OPS. But it seems to have a lower overall response rate for handling the requests. When comparing the 3020 to the 840 we were even more startled, because the 3020 has 4 times the NVRAM and 4 times the processor speed but only doubles the OPS and the response was only about 20% better.

From our review of the results of NetApp’s Spec.org tests we recommended that our customer purchase the F840 or FAS940 with transferable licenses from Zerowait, because they can save a lot of money without sacrificing performance. Our customers are concerned by the cost of storage at acquisition and also the long term maintenance costs of their equipment. At Zerowait we strive to provide our customers with outstanding storage value for their investment dollars. And carefully reviewing these tests results can save you money also.

“The dictionary is the only place that success comes before work. Hard work is the price we must pay for success. I think you can accomplish anything if you’re willing to pay the price.”
— Vince Lombardi

Over the many years in this business I have tried to simplify the price/ performance ratio down to a simple graph. However, I have often been stymied by the problem that our customers value their labor resources and overhead costs much differently.

When you combine costing issues with the fact that companies like NetApp quadruple processor speeds and quintuple NVRAM but don’t even double their OPS when they come out with a new model, it makes it hard to do comparisons. Is it cost effective to run new equipment at 20% efficiency or 3 year old equipment at 50% efficiency? According to industry statistics most storage equipment runs at below 25% efficiency. And what is the real storage value of a hard disk and the right sized value. For instance a NetApp 144GB disk usually reads as 136GB, so you lose almost 10% of your disk space right off the bat. So what are you buying in usable space when you purchase a disk system from NetApp or EMC. Is it just a guess?

The tests we see mentioned and the white papers don’t seem verifiable or repeatable in any environment other than the specific test environment. And it often seems that the test systems are optimized .

So it all comes down to hard work to produce a verifiable solution to the storage hardware questions of :
1) How much does it cost to run my old storage compared with a new solution
2) Will a new storage solution provide more storage at a lower cost per TB?
3) Will Replacing my current storage solution cost me less per terrabyte to administer?
4) Is it more cost effective to add storage to my older system or buy a new system?

Zerowait is working on a way to provide our customers answers to these questions.

“Never confuse motion with action.”
— Benjamin Franklin

Does putting a product in a different package improve the product at all? The reason I ask is that IBM announced that it is selling NetApp’s FAS270 today for $50,000.00 for a 0ne TB package. However, a quick review of the test results at spec.org will show that this unit provide less performance then the F840 that NetApp sold a couple of years ago. So it seems like a lot of money for less performance, then you could get two years ago. Here is the article, I hope that IBM is including transferable licenses with the units. Because that would be a great way to help customers retain the value of their units. But as consumers our savvy customers should be able to get more competitive quotes now from the myriad of sources for the NetApp and IBM equipment since there are now four channels selling the same product. NetApp direct, NetApp resellers, IBM Direct and IBM resellers. Since there is no product differentiation the only difference will be price. So the sales process could turn out to be very similar to dealing with a car dealer and haggling on price will be the differentiator.

The last time NetApp tried to distribute it products through a major channel was with Dell Computer. Those Dell units were left without a lifeline when that agreement fell apart. I hope the folks at IBM have carefully read the DELL – NETAPP OEM agreement on Findlaw as it might help them manage their relationship.

Page 6 of the agreement was interesting.

within the scope of the above license. Neither Dell (except as provided in
Section 14 (Escrow)) nor any of its End Users is/are entitled to receive any
source code, source code documentation or similar materials relating to the
Licensed Non-Ported Software Materials. All End Users will receive Licensed
Non-Ported Software Materials subject to all of the terms and conditions of the
End User License.

6. Prices; Payment Terms.

a. Prices for OEM Products. NetApp agrees to sell OEM Products,
related options and software, protocols, software subscriptions and upgrades at
the prices and discounts specified in Attachment A-1, Section f.

b. Cost Reduction Assistance. Dell agrees to exercise commercially
reasonable efforts to assist NetApp in lowering its commodity costs for OEM
Products as provided in Attachment A-1, Section g.

c. Favorable Pricing. NetApp shall provide to Dell favorable pricing
for OEM Products as provided in Attachement A-1, Section h.

d. License Fees for Licensed Products.

License fees in conjunction with the Licensed Products (“License Fees”) shall be
payable to NetApp in conjunction with the Licensed Products as set forth in
Attachment B-1.

e. Payments. Dell’s payments to NetApp shall be made in U.S. dollars
as follows:

(1) For OEM Product orders with Dell’s EMF (European
Manufacturing Facility), Dell will make one (1) monthly telegraphic payment to
NetApp on the first working day after Dell’s fiscal month close. This payment
will be for valid invoices received and dated during the fiscal month prior to
the month just closed. (Example: Payments for the fiscal month of August will be
made on the first working day in fiscal October.)

(2) For OEM Product orders with Dell’s APCC (Asia Pacific
Customer Center), AMF (American Manufacturing Facility), and all other
affiliates, Dell will make telegraphic payment to NetApp forty-five (45)
calendar days after the date of a valid invoice from NetApp.

(3) License Fees and Hardware License Fees with respect to
Licensed Products shall be paid pursuant to Section 6(g) below.

No payment by Dell or receipt by NetApp of a lesser amount than the amount of
invoice shall be deemed to be other than on account of the earliest due amount,
nor shall any endorsement or statement on any check or letter accompanying any
check or payment be deemed an accord and satisfaction, and NetApp may accept
such check or payment without prejudice to NetApp’s right

Interesting stuff, and I wish IBM good luck.

“You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.”
Abraham Lincoln

Over the last few days I flew to the Oshkosh fly in and camped with a few friends and enjoyed the air show and displays. www.airventure.com There were certainly a lot of interesting new designs in aircraft, engines and avionics. There are a lot of parallels in the aviation business and the enterprise storage business. There is always the ‘Fad’ factor of what is new and hot. And there are the old reliable designs that just keep on going. Aircraft engines have not really changed much in 50 years. And the Cessna 172 is a 50 year old design. The reasons why some things stay the same for so long is because you can’t change the rules of Nature in the air or in storage. A given wing area will only carry so much weight into the atmosphere, and that weight can either be fuel or people and baggage. Currently a given disk can only deliver as much data per second as the backbone of the network will allow to pass through from Point A to Point B.

Provided that you accept that you can make incremental improvements to your data storage design and that you want to maximize your return on investment the smartest thing you can do is improve your storage efficiency. Zerowait is working on a solution to provide a software solution that can help you improve you storage efficency. Jon Toigo’s blog mentions some salient points on why this is so important.

But the reality is that your storage vendor makes money on selling you inefficiency. Because the more storage you buy the more money they make. Our software will provide you with the information to help you create a more efficient storage network. It would make President Lincoln happy, because with our software, the storage vendors can’t fool you anymore!

Zerowait High Availability assures you of superior reliability of our replacement parts, service and support. You can now purchase your parts from us at www.thezerowaitstore.com

Unlike NetApp, Zerowait ships all replacement parts from our location and provides tested products to our customers with warranties of up to three years, depending on our customers’ requirements.

NetApp Out sources its critical parts distribution and re-manufacturing as evidenced by these articles :

Never for a moment did Network Appliance consider doing its own distribution of service parts.

As a result, NetApp needs to recycle defective parts, many of which can be repaired, as quickly as possible. ….Yet customers are receiving brand new boards only between 20 and 30 percent of the time.

At Zerowait, we consider service parts distribution to be a core competency of ours. We provide superior parts service and support at a fraction of NetApp’s outrageous prices. Just ask our growing family of satisfied customers.

“As I grow older, I pay less attention to what men say. I just watch what they do.”
— Andrew Carnegie

Over the last few months we have watched as the titans of the storage industry have started to purchase companies in the Data Security business. Although they say their focus is on storage, they seem to be trying to diversify as quickly as possible away from storage. You can see in previous posts the multiple times that executives in these companies have waffled about their vision for the future of their companies.
Why can’t they make a commitment to a long term strategy of High Availbility storage? Do these companies fear that they will be blind sided by a new disruptive technology? Don’t you wish they would tell us what they are afraid of?

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

If Data Security is so important to data storage companies why are all their cabinets keyed alike?
— Mike Linett

03/2005 Hitz: We’re small enough that we can double our revenues in storage and remain a focused vendor. We’re not interested at all in going EMC’s route.

07/25/2005 article in Investors Business Daily Data Storage companies have new focus as many shifting into more Security work: “This is a growing priority for our customers, and they are looking for storage companies to address it,” said Dan Warmenhoven, chief executive of storage firm Network Appliance.

Questions for your storage vendor:
1) What percentage of your R&D budget is dedicated to Data Security?
2) What percentage of your engineering staff is dedicated to Data Security?
3) How long has your company focused on Data Security as a core competency?
4) what percentage of your gross sales is earned from Data Security?

Getting these answers will reveal if your Storage Vendor is truly dedicating resources to solving your data security problems, or just following the industry trends.

“Information is the oxygen of the modern age. It seeps through the walls topped by barbed wire, it wafts across the electrified borders.” Ronald Reagan

7/11/05 DHS information security plans lacking, GAO says The Homeland Security Department has yet to establish an adequate information security program, congressional auditors found after spending nearly a year reviewing its cybersecurity policies and plans.

Information Security Forum Warns That The Cost Of Sarbanes-Oxley Compliance Is At The Expense Of Other Security Spending 11 July 2005: A new report published by the Information Security Forum (ISF) warns that the cost of complying with the Sarbanes-Oxley legislation is diverting spending away from addressing other security threats.

Who has the keys to your data security? In many cases there are not even any locked cabinets protecting your critical business information. Data security should be considered part of data storage, not as an added feature.