Wednesday, December 24, 2008

Dell to Manufacture Vordel’s XML Networking Appliances

Dell which has built systems for many smaller companies for years is rapidly expanding the service and support for the appliances it bulds for companies.

Katherine Bennett, Director, Dell EMEA ISG said: “This announcement today with Vordel is another example of Dell’s innovative approach of working with companies to enable them to achieve greater supply chain efficiencies, enhanced global support and ultimately, offer significant value to their customer base.”

What is interesting is that there are companies like Tallmaple that are making it easier and easier for companies to build appliance solutions based on their platform.

Creating an internet appliance typically takes your development team the better part of a year just to design, implement, and test the software elements. Significant time is spent handling the base operating system, build system, packaging, licensing, and manufacturing the product, and as new features are added they further extend the base appliance’s functionality.

It is interesting to see the convergence of these developments, where a company can use a development package to accelerate the development process and use Dell or a similar company to create the marketable product.

It is an interesting time and I think that there will be a lot of storage companies embracing this technology and convergence to create :
NAS and SAN Storage Servers
Database and Data Warehouse Network Appliances

Tuesday, December 23, 2008

Data Security in a Recession

There are quite a few articles in the news today about the vulnerability of corporate data in light of the downturn in the economy. One of the highlights was that former employees may try to use their downloaded information to try to secure a new position.

• More than half the workers surveyed who admitted to already downloading competitive corporate data said they would use it as a negotiating tool to secure their next post because they know the information will be useful to future employers.

This does not surprise me because one of the first things mentioned when a salesman is looking for a job is that he has a "Roladex of information of names and addresses". It is still common that when a Senator or Congressman leaves office, they quickly get jobs with defense and government contractors, because of their contacts.

I recall hearing about a former VP at a big storage vendor that got a new job recently and was using his contact list to sign up new resellers, and also hiring sales people that had a great list so that they could quickly ramp up sales.

When a company hires a new CEO, they typically look for someone who can bring with them the trust relationships that are required to move a company forward.

I don't think this is a new story, perhaps the technology has changed, but when folks leave they take data with them.

Thursday, December 18, 2008

Shrinking storage budgets projected for 2009

According to a press release this morning storage budgets are expected to decrease in 2009. It will be interesting to see what happens with acquisitions and maintenance budgets in 2009.

Fortune 1000 Enterprise Organizations to See 14% Decrease in 2009 Storage Budgets -- New Research From TheInfoPro
Last update: 9:01 a.m. EST Dec. 18, 2008NEW YORK, NY, Dec 18, 2008 (MARKET WIRE via COMTEX) -- TheInfoPro (TIP),, an independent research network and leading supplier of market intelligence for the Information Technology (IT) industry, today announced new findings on 2009 storage budgets among Fortune 1000 (F1000) enterprises. According to this new research, the average F1000 organization is facing a 14% decrease in its 2009 budget.

In addition, 68% of companies expect to spend less in 2009 -- with only 21% of those interviewed planning to spend more than $10M, an almost 10% drop from 2008. Financial Services continues to be a weak sector, with 68% of respondents expecting to decrease storage spending. However, 75% of Technology organizations and 63% of Manufacturers also cite significant declines in 2009 spending levels.

Key Findings include:
-- Thirty-two percent (32%) spent less in 2008 as compared with the amount that had originally been budgeted, bringing the average 2008 spend to $10.7 million.

-- Only 32% of clients expect to spend the same or more in 2009 vs. 2008
-- down from 81% in the 2008 vs. 2007 period.
-- The average 2009 budget cut vs. actual 2008 spending represents a 14% decrease.

Wednesday, December 17, 2008

Bad signs for a 2009 chip recovery

Today's Wall Street Journal has an interesting article on the forecast for the chip business next year, and it is pretty grim.

Many semiconductor makers were suffering from plummeting prices and excess production capacity even before the recession's impact began to be felt in September. Conditions appear to have worsened significantly through the fall.

Gartner forecast Tuesday a 4.4% drop in world-wide semiconductor revenue for the year, based on a sudden drop in orders that it expects to trigger a 24.4% plunge in revenue for the fourth quarter. In mid-November, the firm had projected industry revenue would grow 0.2% this year.
Gartner now expects revenue to decline 16.3% in 2009, marking the first time sales have fallen in back-to-back years for chip companies.

"It's just like falling off a cliff," said Amy Leong, a Gartner analyst, of the shift in order rates.

A survey of 85 semiconductor executives by KPMG, scheduled for release Wednesday, reinforces the pattern. The firm, which provides accounting and advisory services to chip makers, says 52% of those surveyed in November predicted revenue to fall in 2009.

Some 70% of the executives surveyed in November expect their companies to decrease their global work force in the next 12 months, and 48% see research and development spending falling.

Quite a few chip manufacturing companies and chip design companies have been our customers over the years, because modeling chips takes a lot of storage. Therefore, Zerowait has been working with chip companies for many years to support their storage infrastructures. During the last downturn in their market we helped a few of them weather the economic storms. It seems like industry is entering another rough period now, and we are working with some of them to help them through 2009.

2009 may be a hard time to be in the electronics commodity business.

"The key for a recovery in the global chip sector is demand, not supply. Unless the amount of global chip supply is cut to more than half from the current level, it looks hard to expect a turnaround in chip prices without a recovery in demand," said Kim Hyun-joong, an analyst at Tong Yang Securities.

Tuesday, December 09, 2008

NetApp closing Haifa development center

NetApp to close Haifa development center

Shmulik Shelah9 Dec 08 14:39
Network storage solutions provider NetApp Inc. (Nasdaq: NTAP) is set to close its Israeli development center in Haifa, which has 60 employees. The center is based on start-up Topio, which NetApp acquired in 2006 for $160 million in cash.

The following article on the purchase of Topio was published on 11/08/2006. Times certainly have changed.

NetApp Grabs TopioDrops $160 million,
following EMC's recent data protection pickupsNetwork Appliance moved to beef up its data protection software today by acquiring replication startup Topio for $160 million. (See NetApp Pockets Topio.)

Topio is NetApp's answer to EMC's $153 million pickup of replication and CDP startup Kashya last May. (See EMC Coughs Up for Kashya.) EMC plunked down another $165 million on data de-duplication vendor Avamar last week. (See EMC Picks Up Avamar.)
Topio's Data Protection Suite (TDPS) enables replication between different vendors' hardware, a capability NetApp plans to use to let customers replicate and migrate data from EMC, Hewlett-Packard, and Hitachi Data Systems arrays to its own. ......

Apparently, NetApp's management sees an opportunity to grow a promising product line. "We can accelerate the growth of this technology," Rogers says. "What's most important is the development team. They come from the IBM mainframe world, and they're good at doing efficient wide area replication." Rogers says NetApp can put more resources into sales and developing future releases of the product that Topio would be able to on its own.

Regarding the value of Topio, one source with knowledge of the company says it was generating "a few million dollars" in revenue each quarter, mostly through a partnership with IBM Global Services, which is likely to continue under NetApp's management. Topio had $21.1 million in funding over three rounds, with the last round of $8 mllion coming in April of 2005. (See Topio Taps $8M.)

"NetApp paid a lot," says the source. "But they may have been feeling the pressure after EMC got Avamar."
NetApp expects the deal to close in December. Rogers says Topio's 60 employees, including founder and CEO Yoram Novick, will be offered jobs. NetApp will retain Topio's R&D site in Haifa, Israel, and the employees in Topio's Santa Clara, Calif., office will move to NetApp's Sunnyvale office.

I wonder what happened to the promise of the technology, as it does not look like any employees were added in the last two years to the operations in Haifa.

UPDATE -- 12/11/08
NetApp discontinues replication app December 9th, 2008 by Dave Raffo
NetApp today quietly pulled the plug on its SnapMirror for Open Systems (SMOS) heterogeneous data replication software, acquired from startup Topio for $160 million in 2006.

Monday, December 08, 2008

Interesting interview with Sunoco's CIO

Today's Wall Street Journal has an interesting article on how Sunoco's CIO is trying to stretch his budget dollars.

I have cut and pasted some parts of the article here.

THE WALL STREET JOURNAL: How is the economy affecting the information-technology world?

MR. WHATNELL: It's having a huge impact. Basically you've had to throw away any plan you've put together prior to the end of August and start over again. It's caught a lot of people by surprise and now we have to quickly adjust our plans for next year [because much less money is available for new projects], not just for the state of the overall economy but for our individual companies' outlook.
[The Journal Report: Technology] Julian Puckett

WSJ: How do you decide which projects make the cut when you're tightening your budget?

MR. WHATNELL: They tend to be those things that save money rather than those that make money. It's not that you don't want to make money. It's that cost-saving projects tend to be easier to measure and are more predictable because you are not dependent on the vagaries of how a customer is going to behave to a new product or how a distributor is going to react to a new channel. I think that is the reality of working [in] tough times.

WSJ: What is a project that you are cutting?

MR. WHATNELL: We have a standard refresh rate for equipment: every four years for desktops; every three years for laptops. We stopped doing that in May and we won't resurrect that plan again probably until the spring of 2010.

[Refreshing computers] improved our reliability and our ability to have standardized rollouts. It was only when we were trying to tighten our belts earlier this year that we asked ourselves, "What would happen if we didn't get new PCs for 15 months? And was anyone actually complaining that they couldn't deliver a product, that they couldn't get cash to a bank, that they couldn't execute a trade because their computer was too old?" Of course not.

WSJ: How important is it to network with colleagues in the industry?

MR. WHATNELL: I think it is critical. It's where a lot of ideas come from. It doesn't even have to be your industry. You could hear someone from a health system talking about how they use mobile devices to enable doctors to access medical information and you think, "I could use that same approach to help engineers who are working on a refinery site."

WSJ: Are you forthcoming when you talk to colleagues or are you worried about protecting competitive secrets?

MR. WHATNELL: I think there is a realization now that competitiveness does not derive from the raw technology. The competitive advantage doesn't come from having the same set of Lego bricks that everyone else has access to. It comes from taking that set of Lego bricks and understanding how they can be put together to understand specific issues that your business is facing in your industry. And how you put them together will be very different from someone else in a different company, even though they are a competitor.

The source of competitive advantage is knowing how IT can help your business. You should to be able to ask any CIO: Are you able to describe in three minutes or less how your company makes money? To me that's where it starts. And the answer isn't "we're in retail" or "we're in the insurance business" or "we're an oil company," because everyone is in retail or the insurance business or is an oil company.

WSJ: What is your biggest challenge and how are you using technology to do something about it?

MR. WHATNELL: The biggest challenge for us is that we are a commodity business in a mature industry. So the challenge is how we can, over the next 15 months, focus on our core activities so that we can be the low-cost provider in our industry. At a time when people are looking to reduce and to cut, how can we create an environment where the business wants to listen to IT about what we can do to cut expenses, to reduce their cycle time and improve their agility. Rather than just have them say, "You have to cut as well." We have an obligation to look at ourselves to find all the places where we can take cost out of the organization. The instinct in challenging times is to cut, cut, cut. But what is much more challenging is doing that and then leaving yourself in a position to talk to the business about how we can help.

Monday, December 01, 2008

Competition for quality service & support

Providing high quality service and support for NetApp equipment is a hard business. Even the folks at NetApp admit that it is hard.

“There was nothing about this part of our business that was working,” says Rusty Walther, senior vice president of global support for NetApp. “The costs were out of control. The performance was bad. Support training was bad. There were no incentives to do well and no penalties for poor performance.”

“On a daily basis, we would get angry messages from customers telling us what a bad job our TPMs were doing,” Walther says.

NetApp decided that the best answer was to outsource its support to IBM, and it seems to work for them. Meanwhile, our business keeps growing which may mean that there are still some customers not satisfied with the OEM service and support, or the pricing models, that the NetApp IBM team is using.

I wonder how the NetApp resellers feel about having their competitor - IBM - provide service and support to their end user customers. Perhaps it doesn't matter because NetApp has a history of nasty divorces from their partners as is evidenced by their agreements with Dell, Hitachi, Eurologic and so many others. The question to ask is: How long is this marriage going to last?

Zerowait provides outstanding support, as the reference letter below sent by an old customer to a new one shows .

We have been a Zerowait customer for approximately three years and I must say the service is second to none. We switched from NetApp to Zerowait and the differences were stark. Zerowait not only cut our costs substantially, but the talent, knowledge and willingness to assist was superior to NetApp (at least that was my experience). Don’t be suspect of Zerowait’s references as when I checked them out, the feedback was so glowing that I wondered if these were really legitimate customers. After switching, my suspicions were unfounded as I began experiencing what the others were telling me and to my surprise; the service was indeed exceptional. I have used them to go on-site, recover data from drives that was thought to be unrecoverable, training and remote technical support. If Zerowait says they can do something, you can take that to the bank. In my opinion, the switch to Zerowait is not a risk at all. I hope this answers your question.