Thursday, December 21, 2006

The more things change the more they stay the same

Recently while at the SNW show in Orlando, I heard that NetApp was switching its shelf supplier from Xyratex to Dot Hill. When NetApp shifted its purchasing from Eurologic to Xyratex it was the root cause of Eurologic going out of business. Currently, NetApp represents about 50% of Xyratex's business. That is a big chunk of business to lose.

Sticking with your strategic suppliers and building long term relationships is something that most companies profess to admire. NetApp says it wants its customers for the long term. Why would a company that professes its strategic relationships to its customers act tactically with its own suppliers? Can a company so focused on its own short term profits provide long term value to its customers?

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