{"id":532,"date":"2008-01-18T13:36:00","date_gmt":"2008-01-18T13:36:00","guid":{"rendered":"http:\/\/blog.zerowait.com\/?p=532"},"modified":"2008-01-18T13:36:00","modified_gmt":"2008-01-18T13:36:00","slug":"is-netapps-glass-house-shattering","status":"publish","type":"post","link":"https:\/\/blog.zerowait.com\/index.php\/2008\/01\/18\/is-netapps-glass-house-shattering\/","title":{"rendered":"Is NetApp\u2019s Glass House shattering?"},"content":{"rendered":"

Imagine what it is like to be a NetApp executive these days. IBM, one of your best business partners<\/a>, has just purchased another company and seems to be readying to directly compete with you. Your company initiated a legal battle with Sun which has the effect of scaring current and potential customers. HP has publicly announced that it is aiming at your market. Dell, your jilted former<\/a> partner, has purchased Equallogic to compete for your SMB and Midrange customers. And a friend of yours has been convicted, and is going to be spending some time in the big house. It is certainly a lot to handle.<\/p>\n

IBM has purchased IV<\/a> , an Israeli company that specializes in high availability storage, for about $300 Million. With ownership of this company, it is safe to assume that IBM will compensate its sales representatives better to sell their own product, than the products they resell for NetApp as their margin will be better. As the phrase goes: Salespeople are coin operated. Although this may take a while to gel, expect IBM\u2019s move to cost NetApp sales in the Enterprise glass house where NetApp has relied on IBM\u2019s gravitas as a major lead generator. In 2005 SearchStorage noted that there was no time limit on the IBM – NetApp deal<\/a>.<\/p>\n

\u201cInterestingly, there is no time limit on the OEM deal with NetApp, which raises the question of how long IBM might be willing to sell someone else’s product?<\/span>\u201d<\/p>\n

Sun and NetApp are fighting over patents and it looks like it will be a drawn out affair. This continues to worry IT decision makers: Where should they put their recession limited strategic storage investment dollars? NetApp\u2019s lawsuit may have quite effectively legitimized ZFS in the marketplace. As Chris Mellor has pointed out<\/a><\/p>\n

\u201cSun will have its ZFS market profile raised massively and have the opportunity to shift a boatload of ZFS-using Sun storage gear. Schwartz sees this as a win-win situation. Sun cannot back down from NetApp’s initial lawsuit and he’s going to ride the wild surf of the free software movement to help wash away what he and Sun perceive to be NetApp’s castle built on sand.<\/span><\/p>\n

NetApp on the other hand will be under attack. Competitors will comprehensively rubbish its position and sow fear, uncertainty and doubt among its customers using the questions above and others.\u201d<\/p>\n

<\/span>HP and Dell are also aiming for NetApp\u2019s market position.
According Internet news<\/a> HP has stated,<\/p>\n

“We’re making deeper investments in our core technologies, and we plan to aggressively compete against NetApp,” he added. <\/span><\/p>\n

When the PolyServe acquisition was first announced, industry observers noted that the technology buy-up would not only make HP a competitor to NetApp but also to heavyweights such as EMS and Hitachi Data Systems.<\/p>\n

<\/span>Even if HP just takes a few percentage points of business from NetApp by bundling storage with their servers it will have an enormous effect on NetApp, by breaking their grip on the market.<\/p>\n

Adding to sales and marketing problems is Dell\u2019s purchase of Equallogic. NetApp\u2019s former partner is now a direct competitor. According to SearchStorage.com<\/a><\/p>\n

\u201cEqualLogic has always considered midrange storage titans EMC, Hewlett-Packard and Network Appliance its main competition.\u201d<\/span>
.Assuming that Dell packages storage and servers in some of their data center deals in the next few quarters, you can assume there will be an erosion of NetApp\u2019s market share by a few points.<\/p>\n

NetApp\u2019s customers are looking for affordable alternatives and there are a lot of them out there now. As Robin Harris says<\/a>:<\/p>\n

\u201cNetApp appears to be the most vulnerable. Their largest customers are ripe for conversion to a more scalable architecture and lower costs. No matter how much NetApp discounts, their costs are higher than commodity hardware. They can fight for a while, but not forever. They have to be competitive and their big customers have to believe they will be competitive.\u201d<\/span><\/p>\n

And on top of all of this one of NetApp\u2019s old friends, Greg Reyes,<\/a> has just been sentenced to jail for stock option backdating<\/a>.<\/p>\n

What a way to start a new year.<\/p>\n

.<\/p>\n

<\/span><\/p>\n

<\/div>\n","protected":false},"excerpt":{"rendered":"

Imagine what it is like to be a NetApp executive these days. IBM, one of your best business partners, has just purchased another company and seems to be readying to directly compete with you. Your company initiated a legal battle … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/blog.zerowait.com\/index.php\/wp-json\/wp\/v2\/posts\/532"}],"collection":[{"href":"https:\/\/blog.zerowait.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.zerowait.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.zerowait.com\/index.php\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.zerowait.com\/index.php\/wp-json\/wp\/v2\/comments?post=532"}],"version-history":[{"count":0,"href":"https:\/\/blog.zerowait.com\/index.php\/wp-json\/wp\/v2\/posts\/532\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.zerowait.com\/index.php\/wp-json\/wp\/v2\/media?parent=532"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.zerowait.com\/index.php\/wp-json\/wp\/v2\/categories?post=532"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.zerowait.com\/index.php\/wp-json\/wp\/v2\/tags?post=532"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}