NetApp Partners: Company Is Primed For Flash Storage, Cloud And The Next-Gen Data Center

NetApp, a company whose sales and earnings have been hit over the past couple years, is navigating through a number of industry transitions and expects to come through a stronger company ready for the cloud and all-flash data centers.

That's the message from NetApp executives to customers attending a series of executive briefings, including one held Wednesday in San Diego that was attended by CRN. The event featured NetApp co-founder and Executive Vice President Dave Hitz and Henri Richard, the company's new executive vice president for worldwide field and customer operations.

It is a message that resonates with the channel, said Scott Miller, director of data center business at World Wide Technology, a St. Louis-based solution provider and longtime NetApp channel partner.

[Related: NetApp Fourth Quarter '16: Down Year Over Year, But New Strategic Technologies Expected To Lead Growth Going Forward]

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"What Hitz and Richard said are completely aligned with what they are telling the channel," Miller told CRN. "It seems like NetApp has sorted itself out. Our business in the first half of this calendar year is much better than last year."

NetApp still has work to do, and it would be beneficial for the company to move into new areas that many of its competitors are in, such as hyper-converged infrastructure, Miller said. "But I like where they are going."

The past 12 months have seen a lot of changes at NetApp, including new leadership and significantly more energy from the company, said John Woodall, vice president of engineering at Integrated Archive Systems (IAS), a Palo Alto, Calif.-based solution provider and longtime NetApp channel partner.

"Dave [Hitz] said in the past that NetApp missed the flash storage market," Woodall told CRN. "But look at the IDC numbers giving NetApp the No. 2 position, and you see they're not missing it now. NetApp is competitive, viable and innovative. I'd say they are very well positioned in the flash space."

NetApp, along with SolidFire, has also done a very good of positioning itself for storage in the cloud, Woodall said. "They're able to meet different deployment models for the cloud."

In this transitional market that all vendors are going through, a lot of companies are seeing more shifts, pivots and trends that need to be managed, Woodall said.

"If Dave and Henri [Richard] are going to stand in front of customers and say they've made a lot of changes, done a lot of innovation, it's because they are as well positioned as anyone can expect any company to be," he said.

At the Wednesday customer briefing Richard said that NetApp has over the past few years had revenue and share price pressures. "There's clearly a need to show where we are and where we are going," he said.

NetApp's fourth fiscal quarter showed where the company is going, with sales of all-flash storage reaching an annual run rate of more than $700 million, and growth in sales of Ontap, NetApp's key storage architecture, growing 80 percent year over year, Richard said.

"We went from No. 5 to No. 2 [in flash storage sales], with a velocity that, without being presumptuous, we can go for No. 1," he said.

Richard said that, when considering IT industry disruption, it is usually caused by either a technology transition or a business transition. However, he said, flash storage is unique in that both are happening at the same time, which gives NetApp a real opportunity to grow.

"When you have these kinds of disruption, you can either be a victim of them, or you can benefit from it," he said. "[Historically with disruptions], people who take a risk will benefit from it. … You have to be comfortable with and lean forward into risk to be a winner."

Richard, citing data from research firm Gartner, said that by 2018, 50 percent of IT spending will be cloud-based, 65 percent of IT assets will be off-site, and 75 percent to 80 percent of public cloud services will be consolidated on six vendors.

For a company like NetApp, it is important to not focus on where customers hold their data, be it on-premise or in a public or private cloud, he said. "We should be concerned about how you get the data there, and how you manage it," he said.

Hitz said that NetApp and its customers are going through several major business transitions at the same time.

The first, which NetApp imposed on itself, is the transition from the older 7-Mode architecture to Ontap, a move that was a big reason for slower NetApp sales.

However, Hitz said, as of the last financial quarter, that transition has been largely solved, leaving NetApp's engineering team to focus on new things such as turning on certain capabilities like compression by default to decrease the amount of storage capacity needed, or changing and optimizing data paths so that high-performance flash does not have to wait for data.

The second transition is to all-flash storage, where NetApp currently has three platforms: All Flash FAS for customers needing the full range of data services, E-series for pure performance without the data services, and SolidFire for full scalability and automation.

Hitz said that, while some in the industry would question why NetApp would have three platforms, that's not an issue.

"I would say the whole data center is going flash," he said. "Is it going in two years, five years, six years? We can have a big fight about that. … But it's important to have the right platforms. We want to be there across all your data center platforms. We don't think three [flash] platforms are too many."

The third transition is to the cloud. Hitz said that, unlike flash storage, where customers are already comfortable with the transition from disk storage, the cloud brings up questions of security, governance and other issues.

Compute is easy in the cloud, but data is hard, which is where NetApp can help, Hitz said. For example, he said, NetApp offers AltaVault, an easy way to move data to the cloud. The company also offers NetApp Private Storage for Cloud, a solution that connects on-premise storage directly to Amazon or Azure public clouds, and Ontap Cloud, which runs Ontap as a virtual machine on-premise or in a cloud, he said.

The industry is also transitioning to next-generation data centers that are highly automated and feature software-defined architectures, which Hitz said plays into the strengths of NetApp's SolidFire all-flash storage technology.

SolidFire offers the kind of automation that lets customers continually add nodes without the need to manually control where data is stored or how it is managed, and offers the ability to provide complete quality of service, he said.

Hitz quoted SolidFire founder Dave Wright as saying, "I've come to realize that our job is to build storage for people who hate storage."

That is a different take than what other storage vendors, including NetApp, has had in the past, Hitz said.

"I'm the guy that designed Ontap," he said. "I love Ontap. But if you want to talk software-defined, you have to say [Ontap] is cable-defined."