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There has been a lot of talk about what will happen with NetApp in the face of its failed bidding war with EMC to buy Data Domain. In addition, NetApp may face new competitive pressures if EMC/VMware and Cisco improve their strategic alliance. However, Tom Georgens, who in mid-August became president and CEO of NetApp, said his company is stronger than ever and more than prepared to meet these challenges. He recently sat down with Channelweb.com's Joseph F. Kovar to answer storage solution provider questions about the channel, cloud computing and the competition.
You recently said in a Barron's article that a buyout would make sense for NetApp. Solution providers get concerned when they hear something like that. Could you explain what you meant?
OK, I never said a buyout would make sense, at least not in as simple terms as that. The simple fact of the matter is, NetApp is not for sale, we are not entertaining offers and our overwhelming desire is to remain independent.
I think that the amount of true growth of companies in the IT industry is going to be small. And I think the companies in that category are going to generate a lot of shareholder return.
As long as we think we can gain share, as long as we think that this market will come back someday, then I think that the opportunity for NetApp to be one of those companies is high.
The simple fact of the matter is, if anybody wants NetApp so bad they're willing to overcome all that, this is America, and everything has a price. But our goal is to stay truly independent, and I think we're going to generate better returns for our shareholders if we do that.
There's talk about companies like Cisco acquiring a storage vendor like EMC or NetApp. Are there are any kinds of companies that you think might be interested in a company like NetApp?
At least on paper, there's a handful of companies that certainly could use a storage product in their portfolio and that have the financial resources to do it.
But I'm pragmatic. I mean, if someone loves us so bad that they're ready to make an outrageous offer, we have to pay attention to it. At that point, it's not my decision. It becomes a matter for our shareholders.
I'm not going to say "never." Certainly there's a lot of money splashing around in the system. But NetApp has the wherewithal, both technologically and in terms of go-to-market, to go it alone and generate significant shareholder returns.
With EMC's acquisition of Data Domain, what can we expect from NetApp in terms of future offerings in secondary storage and deduplication perspectives?
Those are two different questions. From a deduplication perspective, I think we feel just fine about deduplication of primary storage. We're really the only viable player. It's a big part of our momentum.
So, what we were really looking for with Data Domain was a disk-to-disk backup offering and, more specifically, a heterogeneous disk-to-disk backup offering. When we sell the primary storage ... the attach rate of secondary storage to NetApp primary is high.
However, NetApp is a company with market share in the teens. There's a big market out there where NetApp [could sell] a disk-to-disk backup solution where somebody else has the primary. And that's what Data Domain was to solve for us.
Of course, our opportunity is someone else's loss. And I think that EMC was concerned that it might be them, and as a result made a more aggressive play for defensive reasons than we were prepared to make for offensive reasons.
Next: Georgens On Cisco, Cloud Computing And The Channel