Thursday, December 27, 2007

Another NetApp customer rescued

A few weeks ago a NetApp power user who was considering giving his NetApp infrastructure to the grim reaper called us with his problem. NetApp refused to sell the customer 72 GB drives which they needed to provide their Oracle Database the spindle count it needed for performance reasons. Complaints by the customer to his Oracle DBA's about a lousy Database design were not winning him any friends, and were falling on deaf ears in management. NetApp's solution was to sell him larger drives. But if he went with bigger drives he would not be able to stay below the Raw capacity limits of his Filer and would therefore need to upgrade the head unit, incurring huge costs. He just wanted some drives! So he began looking at alternate sources for storage of his Oracle DB. In a conversation with one of his peers, he learned about Zerowait. Out of desperation he called us to learn if Zerowait could help him. We told him we have a large stock of refurbished 72GB drives and can ship right away. After a series of questions and answers he wanted to check our references. I provided him with a list of reference customers for him to contact and he said he would.

Subsequently I learned that our customers told him that Zerowait's folks really care about the details and provide them with excellent follow up on issues. He told me how he was pleasantly surprised by the comments he heard about us and wanted to give us a try. He told me he was recommending to his purchasing folks that they place an order with Zerowait.

We got the order and delivered the product on time and as specified. After a few weeks the new customer wrote me: “NetApp filers are great for databases because you can quickly provision storage, tightly integrate the host and the filer with the SnapManager suite, and change filer parameters to handle different database workloads." The same customer goes on to say "Zerowait is great because they can provision equipment faster than Network Appliance, procure equipment that means your specific needs, and provide parts at a lower cost than Network Appliance.”

Our customers recognize that Zerowait provides them with a unique blend of NetApp hardware and outstanding high availability service and support. Our commitment to independent high availability service and support is what separates us from resellers and distributors of NetApp's products. We recognize that NetApp makes great products; our focus is helping our customers maintain them for the long term, and helping these customers get the most value and performance out of their NetApp investments.

Wednesday, December 26, 2007

NetApp's SSP , is it a punative "Tax" on legacy storage.

Outrage is building in NetApp's reseller channel as NetApp continues to redefine resellers' best accounts in an effort to build their own representatives' sales figures. NetApp acts towards resellers as if they are a missionary sales force working to generate leads and create house accounts for NetApp's direct representatives, instead of facilitating the reseller's long term revenue growth. Resellers' sales forces need to make a living and provide long term value to customers. However, NetApp seems to care more about unit sales and providing sales incentives to promote unit sales than long term service to resellers and their end users.

One reseller was telling me recently that NetApp would not let them quote Software Support only and that they must include hardware support also. I replied that many resellers and NetApp itself provides 'SSP' only quotes. I showed him the evidence and he chuckled at recent comments by NetApp that say they are trying to build a new relationships with their channel partners. Resellers know that NetApp seems to change its reseller stance with the tides.

"The most critical factor for channel success is to have executive support and sponsorship. For example, what we are achieving at Network Appliance is changing the company's business model, leveraging the channel to move the top line. This requires a change in attitude, affects our corporate culture and requires new processes that will lead to success with our channel partners."
"... the company is implementing a new pricing model, including lower list prices for commodity products and an across-the-board increase in partner discounts. Our discounts are off gross revenue to encourage partners to not discount off list price," he said. "We feel they can achieve [discounts] in excess of 20 percent if they don't drive the street prices down."
"We always said it was a matter of time, not when we would do it..."

" NetApp's goals for bringing its appliances through distribution are two-fold: let the distributors take care of administrative details so NetApp can focus on its core business, and use the distributors to expand its business to even more solution providers. Our channel sales are growing three times the rate of the rest of the company," he said. "We can't scale without partners."
"Network Appliance (NSDQ:NTAP) is preparing to offer solution providers customer leads for the first time. Starting Oct. 1, NetApp will provide leads to its channel partners."... "It's the first time NetApp has ever done a lead-generation campaign with the channel," he said. "I'm not sure if I should be proud of this, or embarrassed."
"The VIP reseller program and initiatives are an important component of the Network Appliance strategy to attract and retain the industry's top storage-focused resellers..."
"The StoreVault line will have only one sales channel: VARs. 'This is the only go-to-market vehicle for us,' Krishnan said. 'No CDW (NSDQ:CDWC ). No e-tailers.'”
"StoreVault, a NetApp (NASDAQ: NTAP) division, today announced it is adding CDW Corporation (NASDAQ: CDWC), a leading provider of technology products and services to business"


In a discussion I had with a NetApp direct customer a few weeks ago I was told
"Our discount structure with NetApp is 40% off Hardware and 65% off Software". This seems to be quite an aggressive pricing structure and it is more than the discount off list that many resellers seem to be getting. When a vendor provides this type of discount off their list pricing to end users it makes a mockery of the list prices that they publish. One customer recently was quoted software support by a reseller and NetApp and found the pricing difference of almost $20,000.00 . While this is significant in itself, the customer is trying to justify the pricing over a 36 month period and is concerned about the additional "tax" on his 6 TB of data. NetApp is turning into a very expensive storage platform when Software support is added in to his costs.

Robin Harris wraps up some of NetApp's problems well,

"NetApp needs to focus on their long-term marketing problem: NAS is a commodity. They’ve got 5 years to re-invent themselves for a world of Internet-scale data centers."

NetApp's sales management hierarchy historically has taken a very short term, tactical approach to working with resellers. Their pricing, discount structure and history of abrupt changes in channel marketing strategies creates an atmosphere in which resellers are disincentivised to build any strategic customer relationship. Storage is a long term investment for most customers, and creating long term relationships is very important to both resellers and end users. How can a customer make a strategic storage decision when the sales force is concentrating on monthly or quarterly numbers?

Friday, December 21, 2007

Happy Holiday

Oren Arnold wrote.....
“Christmas gift suggestions:

To your enemy, forgiveness.
To an opponent, tolerance.
To a friend, your heart.
To a customer, service.
To all, charity.
To every child, a good example.
To yourself, respect.”

Zerowait will be closed until Wednesday the 26th, have a great holiday!

Wednesday, December 19, 2007

Can Loyalty be purchased or must it be earned?

Loyalty is priceless and Is neither sold nor bought. Alas, how few who seem to know Its value as they ought." Thornton W. Burgess

Over many years in business (18), and many transactions (thousands), with many customers (hundreds), Zerowait has learned that customer loyalty is earned not purchased. As
Darrell Zahorsky says - "Forget about customer relationship management software, customer loyalty programs and cards. Customer loyalty can't be bought. It must be earned."

So I was surprised to see that NetApp is going to try to buy Loyalty from its resellers now,

"To promote loyalty from its channel, NetApp has packed the programme with many attractive purchase conditions and bonuses. The company is keen to point out though that the new programme is more than just a list of partner gifts and its main focus is product know-how, which it aims to improve through a comprehensive curriculum of education and certification training. Partners new to the programme should work their way through the ranks starting as authorised, becoming gold, platinum and platinum elite until they finally reach the heights and accompanied rewards of being named as a star partner."

NetApp has changed directions on its resellers many times in the past and it looks like its newest direction is to try to buy them off. Manufacturers need to provide resellers a long term commitment to ensure their profitability, not a continually changing kaleidoscope of changing programs, pricing schedules, and packages.

Manufacturers need to understand that resellers and integrators need to have a long term partner that can be relied on, because they are making a long term commitment to learn how to integrate a reliable strategic solution for their customers. How is an end user to judge the long term reliability of a partner that a manufacturer recruits with "attractive purchase conditions and bonuses." ?

Monday, December 17, 2007

Cisco is going to open their Kimono?

Imagine if you were a small company with a limited budget that had to build a big storage and archiving application to provide Storage As a Service (SAaS) . Being a small company without layers of hierarchy allows you to be creative. So you go to the internet and do some research and find out that there already is a lot of support for ZFS out there and it runs on OpenSolaris and BSD.
What are you going to do about switching? You are going to need some pretty specialized switching also and proprietary storage switches can get really expensive. So what can you do?

When Cisco says it is going to open stuff up a bit we need to pay attention..

"SAN JOSE – Cisco's plan to open up its venerable IOS routing software to customers and third-party developers is a bold move designed to further the company's push to make the network the epicenter of the virtual data center.

Cisco plans to "componentize" IOS – developing only one implementation of a specific function instead of several, depending on the image – dynamically link IOS services and move the software onto a Unix-based kernel. Cisco then plans to open up interfaces on IOS to allow third-party and customer-developed applications to access IOS services."

Here is what Cisco Senior Vice President Don Proctor says they are going to do...

"If you look at the portfolio today for the enterprise you'll see that we have solutions at every layer of the stack, all the way up to applications with our collaboration applications. What we're doing with some of the SaaS assets with WebEx is creating a new kind of information work space for the knowledge worker that allows them to build business mashups with the collaboration applications that we provide and the business applications provided by other suppliers."

Interesting times.

Wednesday, December 12, 2007

Customers creating solutions that Vendors might not like

A few months ago I hosted a dinner party for about ten of our customers in Los Angeles. During the dinner our customers compared war stories of infrastructure problems they had encountered and discussed various strategies for negotiating with vendors for better prices, and also how to increase their system reliability while not breaking their budgets. I was astonished by how many of these customers were playing with ZFS at the time but I never expected to see ZFS going mainstream so quickly.

So today when one of our customers sent me the link to this article and pointed out the solution that Arizona State University came up with I was pretty surprised.
"Some users looking for new disaster recovery tools have encountered frustration. ASU is charged with storing half a petabyte of video footage from the Apollo space missions and replicating that data between two sites for disaster recovery. ASU ran into two limitations on its NetApp filers: a 16 TB file system limit and the fact that researchers move file directories around frequently, something that can wreak havoc on performance when hundreds of terabytes of data are attached.

ASU tried NetApp's OnTap GX product to overcome the file system limit and provide a global namespace, but Scheib grew weary of the fact that OnTap GX doesn't support NetApp disaster recovery tools, such as SnapMirror. Scheib found other clustered NAS systems beyond his budget, especially when it meant losing investments in the NetApp storage already on the floor.

In the end, Scheib designed his own architecture using open source ZFS layered over the NetApp filers, spanning the two locations. ZFS is a 128-bit file system with an exponentially larger namespace, and its performance allows for the quick movement of folders and directories. Because ZFS spans the two sites, data replication can be accomplished by dragging folders from one directory to another. The actual migration of data over trunked Ethernet pipes takes much longer, but users still have access during the process.

The irony of pairing ZFS with NetApp, when ZFS creator Sun Microsystems Inc. and NetApp are suing each other over the file system, isn't lost on Scheib, but he isn't concerned about that. "By the time that's settled, I hope there will be more prepackaged alternatives to meet my particular needs."

This really surprises me because NetApp considers ASU one of its quotable and reference clients.
"Cost savings and reliability prompted us to look to NetApp to provide a scalable storage infrastructure for the IDEAL project," said Samuel DiGangi, assistant vice provost of Information Technology at Arizona State University. "ASU continually strives to give back to the surrounding communities, and IDEAL is the next step of that initiative, encouraging lifelong learning and eliminating educational barriers."

"Supporting the nomination for the award was Network Appliance, Inc., a technology vendor for the project. NetApp extended its congratulations to ASU in a news release the day the award was announced. Elisa Steel, vice president of Worldwide Integrated Marketing at Network Appliance, said, “We are thrilled that ASU’s innovative approach to creating the IDEAL project has garnered them recognition.” The company’s file storage servers are one of several components of the IDEAL system, which includes equipment from IBM, Sun, Cisco, and F5 Networks."

Perhaps NetApp started getting too expensive to maintain in 2007,
"Google has economies of scale that we don't have," Page said.

The university has already been able to transition two of its four full-time engineers who had managed the 4 terabyte (TB) NetApp storage system to other functions, according to Page. As soon as the migration is complete, the other two will be reassigned as well. Once the NetApp filer is also reassigned, Page said, the switch to Gmail will save the university $350,000 per year in storage, maintenance and personnel costs."

As architectures grow more complicated storage managers are going to be put under a lot of pressure to reduce costs while maintaining reliability. Is NetApp going to be able to compete when they are being pinched on multiple sides by pressures technologies like ZFS and services like Gmail? We live in interesting times for technology companies and storage managers.

Tuesday, December 11, 2007

NetApp's strategy of Shock and Awe

Over the last many years that we have been working with NetApp products we have never been able to discern any long term marketing strategy. At least now they admit they are not talking about their strategy though.

"NetApp isn't talking about its strategy. A company spokesperson said all the information NetApp will make known on today's announcement is in its press release."

According to NetApp's CEO in recent Eweek interview they have a strategy that appeals to the investor community. "We've had tremendous success in terms of putting the company on the map, identifying a market strategy." The strategy when we were NetApp resellers and Registered Service Providers seemed to be to get into companies that had exploding needs for departmental storage, which is where the NEtApp F740 and F760 fit so well.

As I have pointed out numerous times in the past in this blog, NetApp's channel Strategy seems to change with the tides.

Network Appliance (NetApp) launched its new, two-tiered channel strategy earlier today, to build and expand its enterprise storage sales with the value-added reseller community. By engaging with Arrow, NetApp resellers can gain additional support through Arrow's dedicated sales and focused marketing services.

"The NetApp™ STAR partner program and initiatives are important to our strategy to attract and retain the industry's top storage-focused resellers,"

"The VIP reseller program and initiatives are an important component of the Network Appliance strategy to attract and retain the industry's top storage-focused resellers,"

But aligning their strategy with the goals of growth is a good thing and one that investors and customers should be happy about.

"Network Appliance (NSDQ:NTAP) is defining which customers can and cannot be approached by its direct-sales reps, CRN has learned.

Under the forthcoming Hard Deck program, the Sunnyvale, Calif.-based vendor of SAN and NAS products will work with its channel managers and district sales managers to determine which customers throughout North America will be named accounts targeted mainly by direct sales and which will be channel-exclusive, said Leonard Iventosch, NetApp's vice president of Americas channel sales."

"NetApp’s latest launches will expand that strategy, with the StoreVault line positioned against EMC’s Clariion AX150 and the EMC Insignia lines at the low end and the FAS6000 line going head-to-head with EMC’s Symmetrix line in the enterprise-class SAN space."

The StoreVault line will have only one sales channel: VARs. “This is the only go-to-market vehicle for us,” Krishnan said. “No CDW (NSDQ:CDWC ). No e-tailers.


"NetApp(R) StoreVault(TM) Adds CDW to Expand Channel Strategy

SUNNYVALE, Calif. --(Business Wire)-- StoreVault, a NetApp (NASDAQ: NTAP) division, today announced it is adding CDW Corporation (NASDAQ: CDWC), a leading provider of technology products and services to business, government, and education, to its roster of authorized StoreVault resellers. The new agreement provides small and medium-sized businesses (SMBs) another way to access StoreVault S500 solutions."

"TBR said NetApp would align its financial strategy to focus on increasing revenue growth to drive net income going forward. The company would focus less on scaling back R&D and selling costs, and concentrate on expanding its international foothold and product design to increase its storage solutions market share. However, market competition is fierce and we believe NetApp will seek to differentiate its products through virtualization technology offered in non-complex storage solutions. TBR also said the company will be forced to strike a balance between manageable gross margin and operating profit, and increased revenue from new product design and selling activities."

Zerowait has a long term strategy - We will provide a long term affordable alternative to NetApp for service and support of their equipment.

Saturday, December 08, 2007

Business planning is always unpredictable

This week I was in Atlanta and Denver and right now I am in Denver Airport writing this blog. Traveling to see customers at the end of the year is interesting, most folks are in a reflective mood and thinking about their costs of storage acquisition and management. I met with several folks who are worried about whether we are entering a recessionary period and some are also concerned if we are also entering a inflationary period. Business planning is always difficult, but now storage managers have to be concerned with not only uptime and connectivity but also about power usage and costs.

2008 is going to be an interesting year.

Sunday, December 02, 2007

Google's Gdrive and Storage services

A few years ago when storage was a hot new thing, and the internet was still in boom times there was a company called Storagenetworks that got lots exciting press coverage.
In 2000 one well respected analyst was enthusiastic..

Business is starting to get ready for storage outsourcing, said Steve Duplessie, senior analyst at The Enterprise Storage Group Inc., a Milford, Mass.-based consultancy.

StorageNetworks pitch was that Storage could be run as a service, and at first it made some sense. However, their cost structure was too high and at the time major corporations were afraid to outsource their tier one storage and databases to a company like Storagenetworks.

Google is now trying to offer a similar model but with some Google mixed in...

Popular Mechanics
has an excellent article on some of the issues with this...

"Trusting information with a third-party client can still expose you to thorny legal challenges such as a subpoena. Unlike a search warrant for your off-line hard drive, which is far more restrictive and difficult to obtain, Google could perhaps be persuaded by law enforcement to deliver up your files—without even telling you.

“Google would be wise to offer users an option to encrypt your information,” says Nimrod Kozlovski, a professor of Internet law at Tel Aviv University. “It really needs to have really detailed explanations of what the legal expectations are for storing your info.” "

"Then there’s the trickier part: How does giving away storage translate into profits for Google? The company could potentially serve up contextualized ads to Gdrive users similar to its Gmail service and the Ad Words search model that made Google a giant in the first place. In this case, a computer might scan through all your files for relevant keywords, in a move that’s certain to spook privacy advocates, who tend to give Google a free pass compared with some of its competitors. "

There is no question in my mind that Google will get market share and it is a disruptive enough model to upset the storage oligarchs model of selling more hardware. If Google is able to pull this off it may validate the StorageNetworks model, it may also create a whole new storage services sector in the marketplace and provide companies, and just plain folks, with more choices for how they manage and maintain their storage. And this will be a good thing for everyone except those array manufacturers who maintain their box selling sales and marketing strategy.

History may not repeat itself, but it certainly is entertaining to look at old news reports like this...

StorageNetworks IPO Signals Boom For Storage Outsourcing
EMC Accuses SNI Of Misrepresenting Relationship
By Joseph F. Kovar - CRN - Waltham, Mass.
7:58 PM EDT Fri. Jun. 30, 2000

StorageNetworks Inc. demonstrated that the IPO market is still alive and well when its shares skyrocketed 234 percent after going public today.

StorageNetworks, an early entrant in the storage service provider arena, is hoping to ride an expected wave of storage outsourcing.

SNI, based here, sold 9 million shares of common stock priced initially at $27 per share, up from its original plans to offer shares at $17 to $19. By the end of trading day Friday, shares closed at $90.25, after retreating from a day-high of $102 but still up 234 percent.

SNI is the best known of several storage service provider startups offering to manage the growing storage needs of businesses and consumers at remote data centers.

International Data Corp. projects that worldwide storage services spending will exceed $40 billion in 2003, up from about $21 billion last year. Of those services, management and outsourcing will have a compound annual growth rate of 31.8 percent during that time, IDC said.

Business is starting to get ready for storage outsourcing, said Steve Duplessie, senior analyst at The Enterprise Storage Group Inc., a Milford, Mass.-based consultancy.

As storage needs grow faster than the ability of companies to grow their storage capacity and management, outsourcing will become an important part of their strategies, Duplessie said.

It is easier for businesses to focus on core competencies and leave storage to the experts, Duplessie said. "Clearly the dot-coms were born for (storage outsourcing)," he said.

Duplessie agreed with many industry observers who predict corporations will hesitate to hand their data to outside service providers. "However, data backup is a universal headache," he said.

When it comes to disaster recovery and backup, he said companies will find outsourcing preferable to building a whole second storage infrastructure.

"I could outsource such secondary and tertiary operations, and still control all my own data," he said. "And as companies get used to working with SSPs, they will move more of their data."

All is not necessarily rosy for SNI, however.

Company officials, in a regulatory filing filed Monday, said that EMC Corp. sent SNI a letter on June 21 alleging that SNI has misrepresented that EMC is an investor in SNI even though that is not the case. EMC, in that letter, also accused SNI of recruiting EMC employees and targeting EMC customers in violation of agreements between the two.

SNI purchased over 90 percent of the disk storage arrays and related software it uses to provide its services from EMC last year, although the company now works with about 15 different suppliers, company officials said. Forty percent of SNI revenue in 1999 came from providing professional services to customers of EMC.

Saturday, December 01, 2007

Sales droids are the same in every business

What I noticed at the RSNA conference this week is that there are a lot of competitive solutions being offered for PACS ( image archives) and that there seems to be a lot of marketing dollars being spent on spinning who has the best answer and the best pricing. Also, I noticed that Medical Sales folks wear suits, not just khaki pants and logo shirts! WOW : )

The big storage array vendors seemed to be pushing the idea that security and their large size is worth more to the customers , while the emerging vendors were touting low priced alternatives to the high price solutions. I spoke to one salesman at an emerging company from Irvine, CA who was explaining that his system stores a lot of images. I asked how much and he said they had almost 40 TB of storage at one location in TX. The salesman really thought I would be impressed by that amount, since I was paying very close attention to the system specs. I explained that that was still a small amount of storage, and asked him what type of storage he was using. He was not able to tell me if his system was using RAID 5, or RAID 1, or RAID 0 or whether this Texas installation figure being quoted was a Raw number or a usable storage number. He proudly told me that his system uses new High Availability SATA disks though. I asked him whether he had a higher failure rate with SATA than he experienced with Fibre Channel disks? I clarified that up to this point we have seen higher failure rates with the SATA disks we support. The salesman could not provide me with any numbers or statistics and at this point decided that he should talk to another customer. Although he had a very nice suit, he should have known more about the technology he was selling. His programming was incomplete.

A few minutes later, I was purchasing some coffee and struck up a conversation with an engineer from one of the large array vendors. I asked him about their experience with failure rates between FC disk and SATA disk. This turned out to be a very interesting conversation because the engineer explained that older SATA disks did seem to have a higher failure rate than FC disks for them. I asked for more details, and I was told that their testing of the newest SATA disk do seem to test out almost as reliably as FC disk. I was not able to learn which disk models have been tested by them to be superior models, but I am really interested in this information. Finding reliable and verifiable disk failure rate information which compares enterprise array failures of FC and SATA disk seems very difficult. I understand that over all disks are very, very reliable, but I would like to see some verifiable statistics instead of marketing numbers.

I also got the chance to visit some of our Chicago area customers this week. I really enjoyed my visits and it was great to be told by our customers how much they enjoy dealing with Zerowait.

Monday, November 26, 2007

Heading to Chicago

This week I will be in Chicago meeting with customers in the area and attending the RSNA show. Radiology creates large storage archives and managing these can stretch the budgets of healthcare IT departments to the breaking point. When budgets get tightened healthcare IT departments start to call Zerowait for an affordable solution to the costs associated with their storage infrastructure.

IT departments are beginning to recognize that keeping their HIPAA compliant images on spinning media for the long term is getting very expensive because there is an upward spiraling cost of administration and system upgrades, but there is also a recognition that the costs of maintaining and keeping disks spinning costs a bundle of money also.

This week at the conference we will be talking to our customers about how to stretch their budgets using transferable licensed filers, and switching to our third party hardware support and services. Nothing new here, just trying to help our customers get the most out of their IT budgets.

It should be an interesting conference.

Wednesday, November 21, 2007

NetApp Changes Course again,

Happy Thanksgiving!

NetApp is redefining its Channel Commitment again. Does anyone see a pattern here?
3:11 PM EST Wed. Nov. 21, 2007
That lack of services commitment to the channel has hurt partners, said one major NetApp solution provider who asked to not be identified.

"Their professional services people have been competing with VARs for the last four years," the solution provider said. "We've been almost in direct competition. We have four fully certified engineers who every time they turn around they see NetApp selling services direct. So it's good news if things are changing."

Things are indeed changing, Iventosch said.
NetApp's Boundary Lines
Mar. 04, 2005
Network Appliance (NSDQ:NTAP) is defining which customers can and cannot be approached by its direct-sales reps, CRN has learned.

Under the forthcoming Hard Deck program, the Sunnyvale, Calif.-based vendor of SAN and NAS products will work with its channel managers and district sales managers to determine which customers throughout North America will be named accounts targeted mainly by direct sales and which will be channel-exclusive, said Leonard Iventosch, NetApp's vice president of Americas channel sales.
DATE: 17-SEP-2007
Channel Programs Need to Be Designed for Solution Providers, Not Vendors

Network Appliance is hoping to change the foundation of how it works with the channel. Other vendors' channel program executives should watch carefully.

The second compelling aspect of the program is that NetApp is piloting a professional service program designed to empower solution providers to sell their own services under a NetApp logo. NetApp is building out a series of services methodologies that it will certify its partners on the end customer knows they can have confidence in the services provided by the solution provider. Longer term, NetApp plans to increasingly compensate its own services people based more on partner satisfaction in order to stimulate the right kind of approach to the channel."

Maybe a real change of direction is needed? How about putting Dave Hitz back in engineering and deciding on either a channel strategy or a direct strategy, the competition between the two competing sales forces is not good for anyone.

Wednesday, November 14, 2007

Troubles in the financial world may be hitting the technology sector

As a business owner I am often given the responsibility for trying to make a forecast based on information I am receiving from my employees, customers and vendors. Having had some background in Economics, I always try to remember that Economists have forecasted about eight of the last three recessions : ) .

I am leery of making forecasts only on News reports, because the media makes sales by telling us how bad things are, which I understand is why local news starts with the latest murders in a city like Philadelphia. Telling us how beautiful the leaves are with pictures might not keep people glued to their TV sets as long, and ad sales may suffer.

But even while keeping this in mind , there seems to be a steadily increasing level of news about technology layoffs.

Finance's Troubles Infect Tech
As Wall Street's giants take massive writedowns, fears are growing about the impact on technology budgets
by Heather Green
How hard are the troubles in the finance sector going to hit tech? Since technology companies rely heavily on Wall Street, it's been a growing question as financial giants have taken one massive hit after another.

Now, the answer is starting to emerge. On Nov. 7, Cisco (CSCO) reported fiscal first-quarter earnings and CEO John Chambers disappointed investors with a softer-than-expected outlook for the rest of the year, in large part because of the financial sector. "In the U.S. and the enterprise [markets], we did see some softness," Chambers said. "The finance vertical was the one hardest hit."

E-Loan Eliminates 400 Jobs
Posted by Keith C. Smith on Nov 13 2007 06:49:01 PST
The floodwaters of the mortgage crisis have swept onto the internet’s shores as E-Loan announced yesterday its layoff of 400 employees.

410 employees at the company’s Pleasanton, Calif., headquarters were notified last Friday that they would be dismissed after 60 days. The headquarters currently employs 925 people.

E-Loan intends to jettison 410 of the roughly 925 jobs at its headquarters in the East Bay, said Laurie Azzano, a spokeswoman for Pleasanton-based E-Loan.

AOL's Falco Says 2,000 Layoffs
By Tammi Marcoullier at 11:34 a.m., October 15, 2007 (Updated at 1:58 p.m., October 15, 2007)
Over the next couple of months, AOL will lay off 2,000 people out of a worldwide workforce of 10,000, according to a letter to company employees sent by CEO Randy Falco today. These staff reductions begin tomorrow, as have long been rumored throughout the company and in the blogsphere. The Associated Press is reporting that about 750 staff will be cut from Northern Virginia offices, including former headquarters in Dulles; 1,200 total in the U.S.

Boston Scientific starts planned layoffs of workers
Boston Scientific Corp., which recently said it will eliminate 2,300 jobs worldwide, has begun letting workers go. But both the Natick medical device maker and the state have declined to say how many of the cuts are being made in Massachusetts.

Lawrence Livermore Lab will lay off 500 workers
LIVERMORE - Lawrence Livermore National Laboratory will be laying off 500 employees over the next month as the nuclear weapons research facility trims costs following a change in management, a lab spokeswoman said.

Reports: Seagate to lay off 900 workers in Ireland Seagate Technology Inc. said it will lay off more than 900 employees in its Northern Ireland operations, according to reports Monday.

In this atmosphere it is refreshing to know that our company's growth is solid and I forecast that it will continue to grow. Because as budgets tighten companies look for an affordable reliable alternative for their hardware service and support.

Monday, November 12, 2007

How a recession can affect your storage infrastructure

Many storage clients are worried about how they will manage increasing storage demands when their budgets get cut. This is a legitimate concern, because purchasing new equipment will get harder as Capital Expenditure budgets get pinched in a recession or by inflation.

"A Wall Street superstar this year who runs Balestra Capital Partners, Jim Melcher, says he's "worried about a recession. Not a normal one, but a very bad one. The worst since the 1930s. I expect we'll see clear signs of it in six months with a dramatic slowdown in the gross domestic product."

"Noting that consumption is already slowing, Mr. Melcher figures sharply rising unemployment is inevitable. Another of his worries is that central banks around the globe, America's included, are debasing their currencies, which is setting the stage for a new round of higher inflation."

Maintaining older equipment may pay for the time being, because of the leveling of processor speeds as seen in this WSJ article ,

"The great plateau has had a drastic effect on chip sales. There is less reason for computer users to replace their hardware and little reason for hardware companies to buy the most advanced chips, which are the most profitable for chip makers. "

Legacy NetApp users may actually be able to provide better database performance by keeping their older equipment running longer. The best example is the FAS980 customer who can keep adding 72 GB and 144 GB spindles all the way up to 674 disks, and save a bundle over a newer unit. If you are looking for a long term storage solution and your company is worried about the risks of inflation and recession, perhaps it is time to review your current storage infrastructure. The question to ask your storage vendor is how can you provide our company more storage with less money to invest?

Zerowait has some of these answers.

Tuesday, November 06, 2007

"Now when I buy the latest and greatest, the performance goes down," Mr. Singleterry said. "This has never happened in the past."

Storage is not the only computer application where vendors are unable to take advantage of ever increasing speeds of processors as the Wall Street Journal notes:

"Other users are running into problems already. Robert Singleterry Jr., a researcher at National Aeronautics and Space Administration's Langley Research Center, studies the potential effects of space radiation on astronauts. His software depends heavily on each chip's clock speed -- a contributor to computing speed, measured in gigahertz -- and has seen disappointing test results based on quad-core chips with slower clock speeds than dual-core chips.

"Now when I buy the latest and greatest, the performance goes down," Mr. Singleterry said. "This has never happened in the past." "

The urgency to purchase new equipment from manufacturers has diminished without the steady speed increase. This change provides a great bargaining chip to the purchaser of new storage equipment.

Monday, November 05, 2007

Archive solutions will require a long term commitment.

American Heritage Dictionary -
ar·chive (är'kīv') Pronunciation Key
1. A place or collection containing records, documents, or other materials of historical interest. Often used in the plural: old land deeds in the municipal archives.
2. Computer Science
1. A long-term storage area, often on magnetic tape, for backup copies of files or for files that are no longer in active use.
2. A file containing one or more files in compressed format for more efficient storage and transfer.
3. A repository for stored memories or information: the archive of the mind.

Will NetApp partner with anyone for the long term? It is a reasonable question to ask from a company that wants to provide you with a long term data archive solution. A simple search on Google reveals a few contradictions as to whether there is a long term commitment from NetApp regarding partnerships.

10:41 AM EDT Mon. Jul. 21, 2003
"CRN Interview: Dan Warmenhoven, Network Appliance
By Joseph F. Kovar
Last week, Network Appliance said it would for the first time sell products through distribution--via agreements with Arrow Electronics' North American Computer Products group and Avnet Hall-Mark--to serve the bulk of its existing solution provider community and to attract more channel partners. Company CEO Dan Warmenhoven spoke to CRN Senior Editor Joseph F. Kovar about the distribution move, the channel and EMC/Legato.

CRN: Why the push through distribution?

Warmenhoven: It's the next stage in expanding our channel partnerships. Over the last few years, we've developed a set of global partnerships with firms like IBM Global Services and Accenture. Last year, we got into what we consider 'Star' partners like Forsythe, Datalink and a few others. And we just felt it was time to move on to the next stage.

We've had a number of regional VARs, probably in the neighborhood of about 100, that we have developed in parallel with our Star partners. And it was really time to provide a consolidated way to interface with them and provide additional support to them. "

05 November, 2007 12:38:14
"NetApp cuts distribution ties with Avnet and Lan 1 in favour of a sole partnership with SAN Systems"

kayleigh bateman, CRN 05 Nov 2007
"NetApp looks to boost channel sales
Vendor looks to increase 60 per cent rate"

A data archive is going to take a long term commitment to parts and service, therefore researching your storage solution vendors commitments to long term partnerships should reveal whether they will be able to provide parts and service for the long term.

Therefore I suggest 2 simple questions that you ask your storage archive salesperson....
1) How long will I be able to purchase parts for this system after I put it in service, will you commit to parts availability for 7 or 10 years?
2) Mr Vendor does your service and support commitment match the American Heritage definition?

Thursday, November 01, 2007

"I paid too much for it, but it's worth it." Samuel Goldwyn

I was visiting with some customers in North Carolina for the last couple of days and each of them is very satisfied with their current NetApp hardware but they are experiencing indigestion when they look at what it will cost to buy new NetApp equipment.

One customer is looking at purchasing a PACS system for their medical image archive, but they are quite concerned about the cost of software and hardware from EMC and NetApp. Most of the medical image archive systems we have seen over the last year or two don't seem to use much processor and have very low OPS requirements. That is because the nature of a medical image is to be looked at soon after it was taken and then exponentially looked at less and less over time, unless there is a lawsuit or a research project a few years after the image was taken it probably will never be looked at again. So why keep these images on energy eating spinning disk?

What this type of client wants is a stable system that can be supported for the long term, 10 years into the future or more. But the storage array manufacturers they have spoken to so far want to put them on the 24 month or 36 month upgrade cycle. Over ten years that means at least a few data migrations which are quite costly. But these clients also need to know what is it going to cost to keep all these disks powered up over ten years? And where can they get a accurate reports on how SATA disks will hold up for a ten year life span?

Maintaining images on near line disk storage is going to get costly as these archives grow. Someone needs to address the costs of power and the failure rates of drives and electrical components over the long term. Where will the storage archive manager get a 300 GB SATA drive 9 or 10 years from now when one of his disks fails?

How many 10 year old NetApp filers are still running? It is hard to get certain power supply parts for the NetApp F630 which are ten years old. We have heard that NetApp doesn't ship 10K 72GB drives anymore. What makes people think these manufacturers will support 10 year old image archive equipment?

Monday, October 29, 2007

Does EMC now have more Momentum than NetApp

Over the last few months we have noticed that EMC seems to be winning more deals which displace NetApp than in years past.

"TELECOMS heavyweight Telstra is replacing Network Appliance and IBM storage equipment with gear from rival EMC in a project worth $40 million.

EMC chief executive Joe Tucci visited to Australia to meet clients.

The initiative is part of Telstra's massive technology transformation program, which also involves replacing many legacy systems as the company simplifies its infrastructure.

A Telstra spokeswoman said EMC had been awarded the contract as part of the transformation program and it is understood from a source familiar with the deal that the Boston firm's equipment is replacing systems from NetApp and IBM."

I don't know if you noticed, but lately Dave Hitz seems to blog a lot more about management and other issues than he does about the technology he helped bring to market. I like cars probably more than most folks--but because of our customers' interest in performance of storage, I care more about how Dave Hitz is working on tweaking filer performance than about how much he likes Tesla electric cars.

What seems confusing to customers and myself are the performance figures of older NetApp equipment compared to new NetApp equipment. According to one NetApp Customer we know NetApp is trying to upgrade him from a FAS980 to a FAS3040. But he is confused by the performance and capacity figures and does not see how a FAS3040, although newer, is an upgrade. Below are the figures he used for his comparison.

NetApp Model FAS980 FAS3040
Processor 2 Intel XEON Gallatin 2.8 P4
2 AMD Opteron 2.4GHZ
Cache 512 KB L2 2MB L3 512 L2 No L3
NVRAM 512MB v5 512 MB v6
PCI / X / e * / 9 / * * / */ 3
Ship date 02/2004 02/2007
Max Drive capacity 672 252

The above comparison seems to give weight to a Wall Street Journal article a few weeks ago which said:

"Chip speeds more or less hit a plateau about four years ago because the devices started generating too much heat. If past trends had continued, microprocessors would be about 20 times faster than they currently are. This is a problem. Microprocessors that run faster can do more.

Designers are trying to work around the problem by putting several processors on each chip. But it is hard for programmers to write software that does a lot of things simultaneously. So far, they haven't devised any "must have" programs that encourage consumers to buy new chips.

The great plateau has had a drastic effect on chip sales. There is less reason for computer users to replace their hardware and little reason for hardware companies to buy the most advanced chips, which are the most profitable for chip makers. The total revenue Intel and AMD earn from microprocessors has been shrinking steadily since 2003."

So I would like Dave to get back to working on engineering issues within NetApp, and also to concentrate on blogging about how customers can get more out of their filers. It does NetApp and Zerowait no good to have customers moving on to EMC equipment.

Friday, October 26, 2007

Congress does something right!

Extending the Internet Tax ban was the right thing to do! It is astonishing because Congress can't seem to do anything right recently.

"With Congress at an 11 percent approval rating, the lowest in history....."

But here you go!

"WASHINGTON (Reuters) - The Senate has approved legislation extending a moratorium on state Internet access taxes for seven years.

With only days left before the Internet tax ban was set to expire, the Senate reached a compromise between lawmakers who proposed a shorter extension and those who insisted it should be made permanent.

"By keeping the Internet tax-free and affordable, Congress can encourage Internet use for distance learning, telemedicine, commerce and other important services," Sen. Ted Stevens, of Alaska, said in a statement on Thursday night."

Now if they can just lower business taxes and reduce bureaucratic red tape... I can dream can't I ?

Thursday, October 25, 2007

Strategic planning in a chaotic environment

What is a CIO or CTO to do in a world as mixed up as today's Enterprise storage market is? How can the C- level executive make a 5 year storage plan when Sun and NetApp are going at each other so aggressively?

Jonathan Schwartz writes...
"The shift to commodity infrastructure is as inevitable as the rising tide - although for some, I'm sure it feels like a rogue wave."

This is a statement of simple Adam Smith Economics, nothing surprising in that statement. But for a proprietary software vendor it's fighting words...

Chris Mellor in Techworld sums things up well....
"Schwartz says that Sun will respond to NetApp's lawsuit but will also open one of its own against NetApp in an aggressive raising of the temperature. Sun will file a suit attacking NetApp's use of the Network File System, NFS, and requesting withdawal of all NetApp filer products from the market.


To rub in salt, Sun will pursue sizeable damages and donate half of any proceeds to free software causes. It's not after the money in other words.

Also, to calm customer concerns, Sun indemnifies all ZFS customers against financial fallout from the NetApp suit. This extends to Apple.

In many people's minds there is no way Network Appliance can emerge from this reciprocal pair of lawsuits as the good guys. NetApp started it. People urged talk at the CEO level to prevent a damaging effect on both companies. Schwartz initiated this and Warmenhoven has made unacceptable demands. "

Later in the article he states...
"What someone needs to do, perhaps, is to look Dan Warmenhoven in the eye, someone whom Warmenhoven respects absolutely, and say: "Discretion sir, discretion is the better part of valour. This engagement against Sun is one you cannot, in any real business sense, win.""

Jonathan Schwartz of Sun writes in his blog...

In the interim, if you're a Net App customer looking for alternatives, we would be pleased to talk to you about lowering the cost of proprietary storage - if you're a technical sort, start by trying out ZFS in software form. (There are also lots of reviews available, this one just posted). We'd also be happy to send you a free trial Storage System based on ZFS (pick the x4500 here). And remember, we indemnify our customers.

Now for a shameless plug...
In this chaotic environment, you can be certain that Zerowait will continue to provide outstanding and affordable monitoring, maintenance, and management for your NetApp filers for years to come! Give us a call we can calm your nerves!

Wednesday, October 24, 2007

Is NetApp making deals this week , or digging a trench?

According to storagemojo NetApp is cutting deals to move units out the door and to kill Isilon while it is still vulnerable.

"There is a rumor that NetApp, seeking to strangle baby Isilon in its crib, is giving away product to win deals.
At $1/GB I might buy one
If true, this could reflect continued weakness in NetApp’s results, as noted by analyst Tom Curlin at RBC Capital Markets in late July. They’d be plumping up the top line at the expense of the bottom line."

At the same time as this is going on the CEO of Data Domain Inc., Frank Slootman seems to think that NetApp is still a Niche player in the storage marketplace. When asked to comment on NetApp by Glenn Hanus - Needham & Co. on their conference call this is what he said..

"Glenn Hanus - Needham & Co.
Anything you're willing to say on NetApp?
Frank Slootman
"NetApp is a very different animal in the sense that NetApp really competes in their own accounts. NetApp has some percentage obviously of the storage market, which is considerable, but NetApp is not a broad-based competitor. NetApp is a very, very strong competitor when you get into NetApp shops. When you get outside of NetApp shops, you rarely ever see them. That's very different for EMC. EMC has a very broad-based presence in the marketplace. Quantum tries to protect its installed base of tape devices and NetApp is trying to dig a moat around its install base of near store systems. That's summing up the dynamic that's going on out there"

So NetApp is cutting deals to kill competition and not doing very well at expanding out of its market niche. Is the "Moat" Slootman mentions to lock in NetApp customers or NetApp's competitors out of accounts? An analyst should be able to get to the bottom of this.

Tuesday, October 23, 2007

Is Microsoft a NetApp Competitor or Strategic Partner?

According to this article about the recent EU decision Microsoft and NetApp are competitors.

"The pact negotiated by the European competition commissioner, Neelie Kroes, and Steven Ballmer, Microsoft's chief executive, will enable Microsoft's competitors — from global enterprises such as IBM Corp., Sun Microsystems Inc. and Network Appliance Inc. to small, independent software developers — to make and sell server software that works seamlessly with Microsoft's, which industry experts predicted would open vast new sales opportunities."

But according to this article NetApp and Microsoft are partners.

“NetApp is proud to increase its commitment to Microsoft and the MTCs. Our increased investment in the MTC program demonstrates our current success and desire to serve customers using the Windows Server platform,” said Patrick Rogers, vice president of Products and Partners at Network Appliance."

This could be a case of keeping your "friends close and your enemies closer", or it could be the beginning salvo in a opening battle between the two companies. Either way, as a customer or competitor you have to wonder who is leading the PR campaigns in these companies because customers are receiving two very different versions of how these companies view each other.

Monday, October 22, 2007

IBM and Storage.... there seems to be a long term strategy brewing...

It looks like they are investing quite heavily in their own solutions, I wonder how long they will resell NetApp gear?

See here....
"In his session, Andy Monshaw, General Manager for IBM System Storage, estimated that IBM's storage effort to be a $6 billion plus business with some 6000 people spread across 170 countries. IBM invests heavily in storage with more than $500 million in R&D annually that last year resulted in hundreds of patents. IBM views the evolution of storage through a lens that sees the time prior to 2000 as the time of invention, the time between 2001 and 2004 as the time of integration, and 2005 and beyond as the time of innovation. The company plans to leverage differentiation comes through virtualization, archiving, and security/encryption (which were three of the topics in the deep dives earlier), and also wants to expand solutions through 'green' storage, the greater use of digital media, and expanded efforts in the SMB space. IBM views itself as having marketplace momentum in storage hardware, tape, external disk, and storage software according to market share numbers that it hopes to continue to grow."

It looks like IBM's storage business is investing almost 1/4 of NetApp's total revenue in storage R&D, that leads me to wonder how NetApp can compete with this investment in basic storage research by what they claim to be one of their largest customers. It also has me wondering how long IBM will be selling NetApp gear, they seem to be gearing up to use their 6000 people to sell their own solution, which would be more profitable for them. How significant a share of NetApp's business does IBM represent, and can they afford to lose that portion of the business? You can be certain that IBM's storage sales force will sell the gear that they are compensated the most on, that is the one certainty in all of this.

If I were in IBM's shoes I would compensate my sales force more and better to sell my own gear which has higher gross margins for the stockholders.

Friday, October 19, 2007

What happens when partners compete?

NetApp and Microsoft say they are partners.

"Network Appliance is strategically committed to architecting storage solutions that are highly compatible with Microsoft technologies. Tight integration of licensed Windows® protocols and complete compatibility with Windows OS enhancements as well as Microsoft applications are Network Appliance™ development priorities. These solutions are backed by a global customer support infrastructure that integrates Microsoft Premier Support. "

But it looks like Microsoft is trying to compete with NetApp.

"Microsoft is on course to improve its share of the storage market that has long been dominated by EMC, Hewlett-Packard, NetApp and others, according to eWeek.

Ted Kummert, corporate VP of Microsoft's data and storage platform division, said at Storage Networking World: "We're making storage products that you can bet your business on.”

He says Microsoft has already proved itself as the "general platform for all data" - through widespread adoption of Windows, Microsoft Office and Exchange - and is carrying this experience forward into the storage market."

When partners compete, they may both start to keep secrets from each other, and the partnership may eventually unravel. Will Sun and Microsoft have a stronger relationship then Sun and Microsoft each have with NetApp?

Tuesday, October 16, 2007

NetApp adds Bell Micro to its distributor list.

“We wanted to expand our customer reach and broaden our VAR base," said Pete Rawden, UK channel director at NetApp. "Adding another distributor means that more resellers can get products easier and faster and deliver to users the benefits associated with NetApp products, including: maximising data infrastructures while minimising complexity, overhead and technical staffing costs.
“We … selected Bell Micro because of their capabilities and skills that will allow us to move in new directions and reach new end users. The appointment of Bell will also bring new complimentary partners to our community over and above but not affecting our DNS Arrow partners,” added Rawden"

I wonder how this affects NetApp's Hard deck program and the superseding Foundation program? Most customers want a strategic long term approach, but NetApp seems to keep changing course in the middle of the cruise, leaving resellers and end customers wondering what is going to happen next.

Monday, October 15, 2007

What's your back up plan if you can't get hard drives from Seagate?

Another item for the ' you can't make this up category'

See here....
The International Trade Commission (ITC) has announced that it plans to begin an investigation into several companies that either make or use certain hard drives. In a statement issued yesterday, the ITC said that the hard drives in question are alleged to infringe on patents owned by California residents Steven and Mary Reiber. The two filed a complaint with the ITC in September, saying that the importation of the hard drives violates section 337 of the Tariff Act of 1930.

There are currently five companies being investigated by the ITC, including Western Digital, Seagate, Toshiba, Hewlett-Packard, and Dell. All five companies either manufacture drives that use "dissipative ceramic bonding tips," or sell products that use such hard drives. These parts are used to bond electrical wires within the hard drive—while the ITC doesn't specify exactly which patents the technology allegedly infringes on, two patents that are owned by the Reibers, titled "Dissipative ceramic bonding tool tip," appear to fit the description.

Here is more info ....
The Washington-based body said the investigation has been launched in reaction to a complaint of violation of Section 337 of the Tariff Act of 1930 and seeks a ban on importation into the U.S. of products that allegedly infringe on U.S. patents. The complaint was made a month earlier by Steven and Mary Reiber of Lincoln, California, and is centered around "dissipative ceramic bonding tips," which is related to electrical wire connections inside the drives.

The ITC did not name the patents alleged to have been infringed, but according to U.S. Patent and Trademark Office records, the Reibers hold patents 6,935,548 and 6,651,864 covering such methods.

With Wednesday's decision to open an investigation, the ITC has a 45-day timeframe in which to set a target date for completing the investigation. The case will be heard by ITC administrative law judge Carl Charneski, who will set an evidentiary hearing.


It sounds like the Selden Patent on the automobile to me.....

Friday, October 12, 2007

It sounds like Sun is looking at a long term Value Pricing strategy.

I was not in Denver this week, but many of the people I respect were. Chris Mellor often has some good insights, and here are some good nuggets from his report.

****"The promise is disk capacity at near raw disk prices, nt that Sun said that but why else produce this most commodity-like drive shelves unless you aim to undercut the EMC & Netapps of this world and their eye-watering prices for additional capacity. Buy a Sun storage product instead and add capacity via low-cost rack shelves like these."****

****"Open Solaris gets a full NAS stack as CIFS is being added to it. That means people can build NAS products using it and compete with NetApp and EMC NAS - remember the JBODS? Open Solaris gets NDMP and failover too, both active:active and active:passive."****

****"Of course the StorageTek customer base attending Forum got a loud, long and strong pro-Solaris message but that, being founded on Sun's renewed and very public commitment to storage, went down okay. You get a feeling that a corner has been turned. Things are on the up and up and this product roadmap indicates that the future for Sun's customers looks good."****

From this report it looks like SUN is strategically going after the storage space with value priced equipment. My question remains whether Sun will be able to align their sales force with their customers' desire for long term support and service over the their sales force's tactical commissions for box pushing strategy. Are numbers shipped more important than long term customer relationships for service and support? It depends on your point of view.

Tuesday, October 09, 2007

The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics. - Thomas Sowell

You can't make this up....

Experienced computer professionals are being cut at Sun, EDS and Intel and yet politicians are helping to issue more H-1B Visas to foreign workers. So there are enough workers but American companies don't want to pay them? Could this coincidence be the result of some influencing of our government ?


"For many established workers, the picture is less pretty than it is for new graduates. For instance, Electronic Data Systems Corp. said in a filing to the U.S. Securities and Exchange Commission last month that it was offering an early retirement program to about 12,000 of its 50,000 U.S. workers (download PDF).

Sun Microsystems Inc. said this week that it plans to cut 1,500 employees as part of a workforce reduction program announced in early August. And Intel Corp. recently confirmed that its IT staff is being cut by as much as 10% after an anonymous blogger described the layoff process in detail.

Those actions indicate that "midcareer workers better beware," said Ron Hira, an assistant professor of public policy at RIT and author of the book Outsourcing America (American Management Association, 2005).

"The same firms that are laying off thousands are clamoring that they need more foreign workers," Hira said. "One interpretation of this phenomenon is that companies have no interest in retraining or retaining incumbent workers to fill those positions."

On Monday, the U.S. government began issuing about 85,000 H-1B visas for its new fiscal year -- a total that is well short of what the high-tech industry says it needs for workers from overseas. Industry efforts to raise the annual H-1B cap have faltered as part of broader immigration-reform legislation, but proponents are still pushing Congress for an increase."

Perhaps it is geography or specific states tax and employment policies that are causing these hiring and layoff anomalies. For example, Zerowait is always looking to add experienced IT engineers to our workforce, but it is hard to find folks with the specific set of technical requirements we need in Delaware. But I trust that Economics will help us find the solution in the long run.

Monday, October 08, 2007

Moore's Law meets Physics and Economics at the same time..

Over the last few months many customers of ours have noticed that upgrading their filers to the newest systems seems to provide little performance dividend, and therefore keeping older systems running makes more sense now.

Over the weekend there was an article in the Wall Street Journal that did a little to explain why new Filers may not be that much faster then older Filers.

From the WSJ

"Chip speeds more or less hit a plateau about four years ago because the devices started generating too much heat. If past trends had continued, microprocessors would be about 20 times faster than they currently are. This is a problem. Microprocessors that run faster can do more.

Designers are trying to work around the problem by putting several processors on each chip. But it is hard for programmers to write software that does a lot of things simultaneously. So far, they haven't devised any "must have" programs that encourage consumers to buy new chips.

The great plateau has had a drastic effect on chip sales. There is less reason for computer users to replace their hardware and little reason for hardware companies to buy the most advanced chips, which are the most profitable for chip makers. The total revenue Intel and AMD earn from microprocessors has been shrinking steadily since 2003.

This hardly means the industry is in a death spiral. But it does mean microprocessors are in danger of becoming more of a commodity, like memory chips."

In my previous post I touched on Apple's adoption of ZFS, other folks are asking interesting questions also.

As Matt Asay says in his posting.

"This, however, is allegedly only the tip of the iceberg of Apple's adoption of ZFS, making the outcome of NetApp's lawsuit important to more than just Sun.

Now, if I were NetApp, there are a few companies that would be extremely unwise to sue or otherwise involve in a lawsuit. Apple is one of those. I don't think I'd want that PR nightmare and the hordes of Apple faithful that would be screaming for NetApp's head."

"Open source is the 21st Century's. Get with the times, NetApp."

The future of technology may depend on companies looking at open source code as a natural resource. Maybe future Silicon Valley companies will begin marketing software and products like Evian does water and Conoco does oil. There is a premium paid for the Evian's brand and for Conoco's brand and delivery of a consistent product. Will future storage consumers pay a premium for a brand and consistency?

Friday, October 05, 2007

What is Apple up to?

One of our readers sent this...

"Apple has seeded version 1.1 of ZFS (Zettabyte File System) for Mac OS X to Developers this week. The preview updates a previous build released on June 26, 2007.

In the release notes, Apple confirms that the original release of Mac OS X Leopard (10.5) will only offer Read-Only ZFS. As a result, no ZFS pools or filesystems can be modified or created under 10.5.0. This developer's preview enables full read/write capability, including the creation/destruction of ZFS pools and filesystems.

ZFS is described as "a fundamentally new approach to data management. We've blown away 20 years of obsolete assumptions, eliminated complexity at the source, and created a storage system that's actually a pleasure to use."

The initial version of Mac OS X 10.5 Leopard is rumored to be released on October 26th, 2007. It's unclear when Leopard will incorporate full Read/Write ZFS support, but it seems clear that Apple is working on adding this functionality."

Apple seems to be taking a strategic approach to a lot of things lately. Their consumer electronics work almost flawlessly, and their Laptops are so much nicer than PC's, could they be taking baby steps into the storage marketplace? Can they build a sustainable enterprise storage business at consumer electronics price points?

Also this is interesting

Thursday, October 04, 2007

"Failure is the only opportunity to begin again more intelligently." Henry Ford

Sun has announced that it is going to vigorously go after the storage market now, and I think it's new ZFS product is a great way to do it. It seems that every couple of days we have customers asking us about the viability of the Sun Thumper as a storage platform and whether Sun will support it strategically for a term of three, five, or seven years.

According to Sun's President.
" I'm radically increasing Sun's focus on storage today."

"Why? Because the market's only going to grow, for as long as we're on this earth, and I believe our talent and assets give us a big sustainable advantage - that we're planning on exploiting. Aggressively. "

The issue as I see it is whether Sun can commit to a long term marketing, sales and support strategy or not. Our customers clearly want to partner with a company that takes a long term view of their strategic infrastructure investments and is not just driven by the commission cycle of its sales teams. If Sun can truly implement a strategic long term service and support strategy there are many customers ready, but if Sun continues to send sales people who are merely box sellers into the field an opportunity for long term stable growth in the storage market will probably be squandered.

Therefore, I have a couple of questions for Sun's president -
1) How are you compensating your newly revamped storage sales team?
2) Will you be compensating your sales people with higher commissions on long term service and support contracts than you do for selling hardware ?
3) Can you clearly define the efforts Sun is making to align your sales goals with your prospective customers long term storage strategies?

Wednesday, October 03, 2007

Can NetApp Compete with Western Digital and Iomega on the Small Business and Medium Business market?

Data Storage News
24 September 2007
Speed boost for external storage
By Chris Mellor, Techworld

"Western Digital and Iomega have introduced better external storage products for small and medium enterprises."

"The MyBook Office Edition from Western Digital has from 320GB to 1TB of storage in a paperback-book-sized desktop enclosure. It connects to a host server or PC by USB 2.0 and offers automatic and continuous backup. Working files can be set so that any change to them is backed up, thus providing continuous data protection."

"The Pro NAS 150d Server is also a rackmounted product and offers up to 3TB of storage plus the Windows file services support."

"They also offer hot-swap drives and Retrospect backup software. The 200r additionally has CA eTrust Antivirus software and BrightStor ARCserve OEM edition with Disaster Recovery."

"Both products support file access by Windows, Unix and Linux clients. The 150d 3TB Server is shipping now for $1,699 (about £850 at ordinary conversion rates). The 200r 1TB Server will be available later this month for $1,899 (about £950). The NAS 200r 1TB Server with Print will also be available later this month for $2,499 (about £1,250)."

It seems that the price delta on the FAS2050 and FAS2020 for the general SMB marketplace may be too high. But there are specific segments that may need a NetApp solution, but then since they use the Intel Celeron and have very little memory it may be hard to find those niches.

The market or government intervention will determine the winners over time.

Tuesday, October 02, 2007

There may be affordable solutions coming for transporting storage mirrors and archives over longer distances.

From the Wall street Journal

""We can no longer rely on last-generation technology, which has essentially remained unchanged for 40 years, to power Internet performance," says Mr. Roberts, who is 69 years old. Last month, his start-up, Anagran Inc., introduced a piece of gear called the flow router that he says can help modernize the Internet. The equipment analyzes Web traffic to discern whether it is an email, a movie or a phone call and then carves out the bandwidth needed for transmission."

"Mr. Roberts isn't the only networking pioneer dissatisfied with earlier achievements. Len Bosack, the 55-year-old co-founder and former chief technology officer of networking giant Cisco Systems Inc., helped commercialize routers, the core piece of networking equipment that allows computers to communicate with one another. Yet he now terms such gear "less and less adequate" for today's Internet needs. Last month, his company, XKL LLC, unveiled a system that allows businesses to connect to underground cables that have nearly 100 times the capacity of current telecommunications pipes."

Is there a possibility that these companies can work with large storage users to make affordable mirrors possible?

Monday, October 01, 2007

Conventional Wisdom is often wrong, but sometimes it is related to NetApp storage.

In this week's Economist is an article called Advanced biofuels Ethanol, schmethanol ..

"Everyone seems to think that ethanol is a good way to make cars greener. Everyone is wrong

SOMETIMES you do things simply because you know how to. People have known how to make ethanol since the dawn of civilisation, if not before. Take some sugary liquid. Add yeast. Wait. They have also known for a thousand years how to get that ethanol out of the formerly sugary liquid and into a more or less pure form. You heat it up, catch the vapour that emanates, and cool that vapour down until it liquefies.

The result burns. And when Henry Ford was experimenting with car engines a century ago, he tried ethanol out as a fuel. But he rejected it—and for good reason. The amount of heat you get from burning a litre of ethanol is a third less than that from a litre of petrol. What is more, it absorbs water from the atmosphere. Unless it is mixed with some other fuel, such as petrol, the result is corrosion that can wreck an engine's seals in a couple of years. So why is ethanol suddenly back in fashion? That is the question many biotechnologists in America have recently asked themselves."

The article goes on to explain how Dr. Craig Venter is involved in the Biofuel efforts,
"These firms, however, have one other competitor. His name is Craig Venter. Dr Venter, a veteran of biotechnological scraps ranging from gene patenting to the private human-genome project, has been interested in bioenergy for a long time. To start with, it was hydrogen that caught his eye, then methane—both of which are natural bacterial products. But now that eye is shifting towards liquid fuels. His company, modestly named Synthetic Genomics (and based, unlike the others, on the east side of America, in Rockville, Maryland), is reluctant to discuss details, but Dr Venter, too, is taken with the pharmaceutical analogy. Indeed, he goes as far as to posit the idea of clinical trials for biofuels—presumably pitting one against another, perhaps with petroleum-based products acting as the control, and without the drivers knowing which was which."

And Dr Venter's company is a big user of NetApp equipment and often hosts the DC NetApp user group. And so there you see a relationship between Biofuel research and NetApp storage.

Thursday, September 27, 2007

Former Network Appliance Manager Charged With Embezzlement - US Attorney
....Here is the link
Posted on Wednesday, September 26, 2007

LAWFUEL - Former Transportation Manager of Network Appliance Corporation Charged Over $ 90,000 in Personal Expenses to Corporation

SAN JOSE - United States Attorney Scott. N. Schools announced that Bernadette Escue, the former Global Transportation Manager of Network Appliance Corporation, ("Network") was charged yesterday afternoon with wire fraud. According to the Information filed in San Jose federal district court, Ms. Escue, 41, used her position to embezzle over $90,000 by charging personal expenses to her company charge cards.

According to the Information, Ms. Escue was Network’s Global Transportation Manager and worked in Network’s Sunnyvale, California facility. The Information states that between February 2001 and October 2003, Ms. Escue fraudulently charged over $90,000 in personal expenses on Network corporate credit cards, including $12,900 for her son’s tuition at a private high school in San Francisco.

Joseph Fazioli is the Assistant United States Attorney who is prosecuting the case with the assistance of Legal Assistant Susan Kreider. The prosecution is the result of an investigation by the Federal Bureau of Investigation.

Another Link in SF paper.

Tuesday, September 25, 2007

Congressional Earmarks for SAN's.

Nothing should surprise us anymore...

Storage Area Network Earmark

“$1,000,000 to Eisenhower Medical Center for Storage Area Network”


Storage Area Network Earmark

“$3,000,000 to University of California - Redlands for Spintronics Memory Storage Technology”



Sunday, September 23, 2007

What was your favorite OnTap version?

This is an interesting question lately because the multiple releases of version 7 and all the patches remind many users of the updates of MS Vista. According to this article MicroSoft is letting folks downgrade to XP from Vista.

Here is an article on this new MS policy:

"While Microsoft is still pushing Vista hard, the company is quietly allowing PC makers to offer a "downgrade" option to buyers that get machines with the new operating system but want to switch to Windows XP....

"The program applies only to Windows Vista Business and Ultimate versions, and it is up to PC makers to decide how, if at all, they want to make XP available. Fujitsu has been among the most aggressive, starting last month to include an XP disc in the box with its laptops and tablets. "

So what was your favorite OnTap version? Was it stable and secure? Why not let customers choose to stay with an older version of software? Perhaps NetApp can offer older versions for a reduced price, and let the customers who want to be early adopters of new software pay more. Buggy software costs more to support, and therefore NetApp would probably like to charge more for it.

Imagine the conversation over the coffee pot between two storage managers.

Engineer 1 says, " I really liked the old stable versions of Ontap that ran on the Alpha chip systems."
Engineer 2 says, " I really like the challenge of debugging software with NetApp engineering so I just paid more to be a guinea pig testing the new software."

I wonder if a storage manager values stability more than all the new features.