Friday, December 30, 2005


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 ?

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