Tuesday, April 24, 2007

Great Companies combine Innovation with Customer Focus.

I was having a conversation with a buddy of mine last night and we were comparing the NetApp of the mid to late 90's to the NetApp of today. In the old days, NetApp seemed really concerned with technology and how it helped solve customer problems. My buddy was complaining because today's NetApp is all about license fees and marketing limits on capacity and ways to milk his company for more money. Paying more for licenses means there is less money for staffing development and budget for raises to keep his good staff.

He asked ' What happened to the company that was all about innovations that helped the customer? I couldn't answer that. I know a lot of the same people are still working there. I read Dave Hitz's blog a lot and he seems to be still working there. Dave certainly does not seem to be engaged in the programming anymore, from his blog he seems to acting more like a marketing droid. Dave and I have not talked in years, although he writes to this blog occasionally, perhaps he can clarify?

My buddy said 'NetApp had a great technology that hit the market at the right time, can they maintain leadership in a market that is rapidly commoditizing?' I replied that that I would keep an eye out for companies that can sell at a commodity price a package of Sun ZFS, cheap JBODs, and Seagate or Hitachi 1 TB or above drives. When 2 or 3 of these companies hit the market a real fight will begin.

When these commodity solutions hit the enterprise marketplace EMC , NetApp and the other SAN & NAS packagers will be in for an SGI/ DEC/ WANG type of business decline. Because they won't be able to justify their price delta, since they are all selling the same drives.

Technology can be a harsh mistress, therefore I would bet on the company that has the lowest cost solution that answers their chosen market's needs the best.

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