Thursday, October 30, 2008

NetApp Cancels Conference, why not make it a Job Fair?

Everyone seems to have noticed that NetApp has canceled its much hyped Customer Conference. The NetApp folks are blaming the economy. It is interesting that NetApp is saying that their customers are unable to travel to the customer conference, because of travel restrictions caused by the economy.

"NetApp said in a statement that the cancellation was caused by "customer feedback about increasing restrictions on corporate travel," as well as "today's climate of economic uncertainty."

Admittedly Zerowait's customer conference in Reno in September was a smaller event than NetApp was planning. But our customers had a great time and learned from each other how to maximize their NetApp infrastructure and get the most out of their storage investments. At the conference we had frank discussions on how to extend their NetApp equipment's life cycle and get more value from their storage. So by traveling to our conference our customers learned new techniques for saving their companies substantial amounts of money.

In light of the economic situation that caused NetApp to cancel their conference perhaps they can recast it as a job fair for customers who are losing their jobs, or a conference that will show their clients how to save their budgets? At the least a Job Fair would be a great way for NetApp to help their loyal customers that understand their technology find new positions in commercial sectors that are still growing.

Zerowait is still growing, and we are always looking for qualified candidates to help us with the service and support of NetApp equipment around the world. If you are a highly qualified NetApp engineer please send us your qualifications, we may be able to help you and a customer of ours.

Wednesday, October 22, 2008

Correlation or coincidence?

Why is it that so many of the big companies that are getting into trouble in the current economic environment are NetApp customers? Is there a correlation or is it just coincidence? Below are three examples which illustrate the linkage:

First, let's look at Yahoo which is currently experiencing some difficulties....

Yahoo is laying off 1500 employees and they are a big user of NetApp.

"Yahoo is bracing for a deep downturn likely to extend well into 2009 by trimming $400 million from its annual expenses of $3.9 billion. Besides shedding 1,500 workers during the next two months, Yahoo may close some of its U.S. offices and assign more jobs to lower-paid contractors in other countries. "We are going into what is very clearly a recession mode," Blake Jorgensen, Yahoo's chief financial officer, said in a Tuesday interview. "

NetApp has been very proud of its long relationship with Yahoo

"NetApp is proud to be the network file server of choice for Yahoo! e-mail. If you'd like more information about NetApp file servers or web caching solutions"

Would a reduction in NetApp's service and support costs have helped Yahoo reduce its operating costs and saved some employees their jobs?

We could ask the same questions about the situation at Goldman Sachs.

Investment bank Goldman Sachs Group is looking for a way to trim expenses as it transitions to a traditional bank holding company. To 10.0% of its employees, cost cuts spell unemployment.
Goldman Sachs Group (nyse:
GS - news - people ) will cut 3,260 of its 32,569 employees worldwide, according to a Reuters report released Thursday.

An easy way for the folks at Goldman to trim expenses would be to lower their support costs for their NetApp storage. Goldman has not gotten as much press as some of NetApp's other customers on their storage infrastructure, but there is a lot of equipment there.

Third, is the sad affairs that occurred at Lehman Brothers. Lehman was a big user and a fan of NetApp equipment before they ran into big trouble.

"Now, he says sales to finance have fallen even more, to a run rate below 10% of NetApp’s sales. He even notes that Lehman owes NetApp money (“We’ll see if Barclays makes good or not,” says Warmenhoven.)"

Things can change quickly in the marketplace. I wonder if NetApp's CFO knew of any difficulties when he was a featured presenter at this Lehman conference less than a year ago?

Sunnyvale, Calif. - December 5, 2007 -- Network Appliance, Inc. (NASDAQ: NTAP), a leader in advanced networked storage solutions, today announced that Steve Gomo, Executive Vice President, Finance and Chief Financial Officer, will present at the Lehman Brothers Global Technology Conference in San Francisco, CA on Friday, December 7, 2007, at 8:30 a.m. Pacific Standard Time.

Perhaps the NetApp CFO should have tried to collect on their outstanding debt which Mr. Warmenhoven mentioned above prior to speaking at the event? Shouldn't the NetApp CFO have been watching Lehman's deteriorating credit situation, and shouldn't he have mentioned it to the folks at Lehman who invited him to speak? Now NetApp may have a questionable receivable on its books. Coincidentally, Lehman helped bring NetApp public .

Neither Yahoo, Goldman Sachs or Lehman Brothers were ever customers of ours. I wonder if their storage procurement people ever looked into ways in which they could reduce their NetApp support costs? Perhaps now is the time to review their service and support costs?

Our business has been strong these last few months and there seems to be a correlation between the state of the economy and the growth of our independent NetApp service and support business within larger companies . As our growing family of customers knows, Zerowait provides high availability NetApp support at an affordable cost.

Saturday, October 18, 2008

A week in Southern California

I am returning home to Delaware from San Diego today after a very busy week of visiting our customers in Southern California. We met with customers in publishing, entertainment, micro electronics, aerospace and defense. Every customer is looking at how to consolidate their storage to get by without breaking their budget. Maximizing storage to the capacity of their current NetApp systems is one way of making their budget dollars go farther because they can avoid a system upgrade. A couple of customers are looking at Equalogic storage and some were looking into home brewed BSD solutions running ZFS.

The paradigm has changed and high priced arrays are not a priority anymore. The priority is maintaining high availability without breaking the budget. Because of tightened budgets some customers are comparing their quotes from different divisions and have noticed that their pricing was different from NetApp for different divisions within the same company and were sometimes different within the same building for systems and support. One company that I met with that has a European division noticed that NetApp pricing was substantially different and that the Europeans could purchase the identical equipment for substantially less then the US division could. This might have something to do with the opportunity registration that NetApp uses, but with many companies today the lowest acquisition cost is the most important aspect of a purchase, and the vague logic of the pricing that customers are getting seems to be an issue.

This trip was enjoyable. I met with many customers and friends that we have been working with for over 10 years. We discussed the growth and maturity of the networks we have been working on and looked at the new challenges that occur because of rich media and compliance issues. Storing data for compliance can get quite costly and our customers were asking what types of solutions we could provide them that can provide reliability without breaking the bank. And we have some solutions that are a perfect for for today's budget constrained IT environment.

Thursday, October 09, 2008

Helping our local business community

The financial panic has hit Wilmington, Delaware. Many of the companies in the news have offices here - AIG, JP Morgan Chase, Citi, Bank of America, etc. As a member of the Delaware business community we are offering to help the local financial institutions by helping them lower their costs of support and maintenance for their NetApp storage infrastructures. The employees of these companies are our neighbors and friends. If we can help these companies to reduce maintenance costs perhaps these large companies can retain some of their highly trained IT staff who are our neighbors.

Tough times call for creative solutions and Zerowait has been providing an affordable alternative to NetApp for service and support for many years for some of the largest companies in the world. Since the Dot Com bust NetApp has focused on the financial sector, and their business grew over the last few years. But now these financial companies are hurting, and their workers are looking for reliable solutions that they can afford.

We recognize that a lot of local companies are hurting right now, and we have solutions that can help them maintain their high availability storage while they are cutting their budgets. Let's work together to solve today's problems and let other people assign blame. If you work for a financial institution with offices in Delaware, give us a call and we will give you an additional 5% off our already low prices.

Monday, October 06, 2008

Don't Panic! Zerowait has the answer

Today the news reports are all about the financial panic. The great sell off and the doom that is coming. But there are always ways to economize and people are at their best when things look bad. Today people are looking at Zerowait as an option on how they can save money and not sacrifice the high availability service and support that their NetApp storage infrastructure provides. There are always options, and in hard times Zerowait can provide an affordable alternative for high availability service and support for your NetApp infrastructure.

Don't Panic! Zerowait has the answer! Call us and we will calm your nerves.

Wednesday, October 01, 2008

"How come NetApp charges so much?"

Yesterday morning a Purchasing Agent for a big company that we have been working with for many years asked us to review a quote that NetApp sent to them. The Purchasing Agent could not understand how come NetApp's prices were so high.

We were asked if we could provide the equipment and we told her that we could and our price for the equipment would save her about 40%-60% of what the NetApp quote was. Every Purchasing Agent knows that you need to have two suppliers to keep prices down. And Zerowait helps companies worldwide keep their NetApp equipment acquisition and maintenance costs down.

NetApp understands that they need two suppliers for their disk shelves and drives and is forcing Xyratex to accept a secondary supplier. NetApp is doing this to keep Xyratex's prices down. They are forcing their supplier to lower costs through competition.

According to the transcript of the recent Xyratex earning call, NetApp is looking for a secondary supplier of storage shelves.

"My true feeling is at least in the short to medium term NetApp and ourselves have been discussing for a long time their desire from a risk perspective to have a second supplier,so I think it’s driven by that but I think the fallout of it will be to see whether things can be done more cheaply in that way. And I guess to a degree Xyratex should invite that because to the extent that we can get product to our customers more cheaply while not increasing our own production capabilities but by looking to CMs to do more for us, then it should actually be positive for us as well if that is the case."

It is good to know that NetApp understands the reasons to have two sources for parts and services. And their executives validate the business model whereby NetApp customers invite Zerowait in to provide support for some NetApp systems within their storage architecture. Many times companies buy shelves of drives from Zerowait and we support the shelves we sold on a system and NetApp supports the shelves which it sold.

Whenever a company has all its eggs in one basket the purchaser and the supplier are tied together, and that is usually cause for mischief on the suppliers part.

If you are asking the question " Why does NetApp charge so much?" Call Zerowait. We have the the answer. Competitive quotes for NetApp equipment will make NetApp sharpen their pencils. Just like NetApp is causing Xyratex to do.