Friday, February 25, 2011

Resolving NetApp's delivery issues

Over the last few weeks we have experienced a steady increase in customer requests due to NetApp's continuing supply problems. Typically, a tight supply leads to an increase in the cost of products and I would expect that NetApp would raise their prices to alleviate their delivery issues. I can't say whether they are using their pricing to solve their delivery problems or not. It could be that competitive pressures from EMC, Dell and others are preventing NetApp from raising their costs on new product sales.

From the news reports I have read, I can't tell which components are causing their delivery bottlenecks. If NetApp has only a single supplier for their products, they probably have very little leverage with their supplier to increase production. Unless they represent an extremely large percentage of their supplier's sales they can't do much to increase deliveries. If they have only one supplier for their new FAS3200 product, they don't have a competitive supplier they can ramp up. In this situation, demand will outstrip supply and that looks like what is happening

"Paul Hickingbotham, solutions manager at NetApp ­distributor Hammer, said the firm has experienced delays in getting hold of the FAS3200 kit in recent weeks.

"There have been some delays in fulfilment of deals [but] most customers are prepared to wait," said Hicking­botham. "And with demand being so high, this is a positive thing."

Matt Earle, NetApp business manager at distributor Avnet, said the delays were not harming business.

He said: "Any delays being experienced are not impacting orders which I believe is testament to the quality and popularity of the products."

Zerowait's orders are up this year, and I think it might have something to do with NetApp's supply issues. I am traveling to the UK next week to visit with several of our NetApp customers, and also several new prospects. Additionally, one of our Senior Engineers from the USA is working with our Australian team next week visiting several clients and prospects in Australia.

NetApp makes great products, and their superseded equipment can remain in service for quite a long time when clients use Zerowait for their service and support on the legacy equipment. If you are looking for an alternative to upgrading, or would like a competitive quote for your Filer support, I hope you will consider our alternative support solutions.

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