back to article Don't like droopy results, NetApp? Develop server-side SAN

NetApp's second-quarter revenue number have confirmed its recent overall decline, with the storage and data management company trying to recover from several recent quarters of revenue falls. NetApp_Revenues_To_Q3fy2015 NetApp revenues to Q2 full year 2015 with polynomial trend line showing decline A curve showing a long …

  1. Steve Knox

    Wrong Trend Line

    While the trend line looks nice, the latter results clearly show a pattern of seasonality, which had likely been previously masked by NetApp's growth. Separate quarterly trend lines would be more appropriate.

  2. Anonymous Coward
    Anonymous Coward

    Doesn't surprise me...

    It amazes me what they sell, and for how much (in terms of "nothing special" feature set, for punitive prices). Some people have been drinking the NetApp cool-aid for far too long; it appears they're starting to wake up and smell the coffee...

    Only the other week I had a customer who was talking about spending $300k on more NetApp gear. I convinced them to go down the HP VSA approach which will be more than sufficient for their needs, and will cost an order of magnitude less. The more money they don't spend with the likes of NetApp, the more money they have available to pay me for real value-added services. Win.

    1. Lusty

      Re: Doesn't surprise me...

      You're clearly missing the point of NetApp. They do actually have a VSA appliance, as well as one for the public cloud, it's just that those of us who understand the value in NetApp never use them. Your HP VSA will definitely not have similar performance to the NetApp hardware solution for a start, but it also won't be able to cover you for backup purposes in quite the same way, so on your bill you will also need to pay for some kind of backup media be it d2d or tape libraries as well as a software suite to go with it. You also need to add to that mix the extra effort required to manage that backup solution and the extra bandwidth required to stream those backups around the place not to mention the strain on your virtual hosts in performing the backups. You're also missing the business benefits such as instant recovery of large data sets such as Echange databases, sql databases and the end user recoverable file data which can drastically reduce service desk calls and hence staffing.

      I too get the money for services when selling NetApp, but it's because I justify my time by properly explaining performance and business benefits which the StoreVirtual cannot compete with.

      1. Anonymous Coward
        Anonymous Coward

        Re: Doesn't surprise me...

        Yes and all of that stuff from Netapp is for free isn't it ?

        Of course not, you have to buy another Netapp array at primary storage prices for the hardware and support to accommodate all of those backups. Being a general purpose array it doesn't even provide a particularly efficient or flexible backup target, typically offering only mediocre de-dupe ratios.

        Probably best not to mention the entirely proprietary nature of the solution and the complete vendor lock-in, Netapp disk only anyone.

        We all know backup just keeps growing so paying enterprise prices for cold relatively static data makes very little sense unless you're a Netapp employee or shareholder. But I don't doubt it's great for Netapp's primary storage market share numbers as these won't be counted separately as a backup to disk appliance.

  3. flashguy

    Not seeing it

    Much as the first commentator noted, I'm not seeing any revenue declines in the graphs. It looks like just pure seasonality. Of course straight line revenue isn't growth, and that admittedly is what the investment types want. But it seems like you're calling for a panic because of a couple of years of steady 6 billion dollar a year revenue and substantial profits. I'm not sure that makes sense.

    Regardless, I would be really surprised to see Georgens lead the company into the server biz. I think they're happy to leave that to Cisco. Besides, from everything T.G. has been saying for the past year or so, it seems NetApp is convinced that data center servers are the more likely candidates to go the way of the dinosaur, with compute going to the cloud while control over their data will remain what the Enterprise really wants. At least that's my read on their direction. And who knows? Maybe they're right.

  4. Anonymous Coward
    Anonymous Coward

    NetApp customers

    In the storage world, NetApp seem to have attracted a base of passionate customers mainly due to their ONTAP offering.

    Nothing is going to persuade them to buy better - and better value - products be these from HP, IBM or Dell. NetApp are safe. Oh, and Gartner Group like them.

    1. Anonymous Coward
      Anonymous Coward

      Re: NetApp customers

      Not in my geo.

      NetApp customers are tired of complex, expensive boxes with hideously overpriced support which isnt justified by its cost. NetApp is too big to fail with too many blinkered fanbois but I predict a rocky ride or at least a period of stagnation.

      1. Anonymous Coward
        Anonymous Coward

        Re: NetApp customers

        Agreed, apart from cDOT, which has been many years in the making following the Spinnaker aquisition, NetApp hasnt innovated in the way it used to. The Azure/AWS really doesnt work properly yet - more of marketing spin/vapourware play to make it sound cloudy. Flash doesnt work well with FAS, whether thats hybrid aggregates or flash cache due to the WAFL OS not being designed with flash in mind, compared to that of the new hybrid players such as Nimble - do a proper comparison with high performance workload and see for yourself. I did and it didnt stack up well for NetApp.

        The costs are too high and culturally they appear to be the new EMC on the block, which isnt a compliment. FlashRay has been rushed to market and isnt finished and from what I understand, doesnt integrate nicely with FAS (someone might correct me here).

        I used to really like NetApp but i think it has lost its way.

        Disclaimer: storage expert at customer with many years of storage expertise from all major vendors and increasingly the newer ones.

        1. Lusty

          Re: NetApp customers

          Not sure why you think the Azure/AWS stuff doesn't work. It's ideal for replicating data to be consumed within the cloud either on dedicated hardware with solid sovereignty for important or large workloads or on a software defined SAN with cloudy sovereignty for smaller workloads. It's also ideal for cloud migrations alongside project shift to reduce downtime during the move since you can mirror data disks to the cloud ahead of time.

          1. Anonymous Coward
            Anonymous Coward

            Re: NetApp customers

            OK, try speaking to someone in the who can help you technically with your solution and actually tell you how this will work. Secondly, try and get a quote and a clear understanding of costs over a, say, 5 year period.

            Please come back and report your findings.

            Unless something has changed significantly in 8 months, which is when I was looking at this, then I suspect you might find a problem with both of those simple actions.

            1. Lusty

              Re: NetApp customers

              I can do both myself since I know how it works and have a partner account to look up pricing :)

      2. P. Lee

        Re: NetApp customers

        Indeed. They seem addicted to "enterprise" pricing. $7k/Tb? Nah, I just think we'll buy a stack of disks and leave them in the cupboard for hotplug DAS systems. No expensive 40G switches (which become a bottleneck) required for that either.

        I wonder if that's the reason they are losing out to server-side SAN?

  5. Trevor_Pott Gold badge

    Meh. Buy Maxta. Marry it to Ontap. Wibble, wobble, pwn.

  6. Anonymous Coward
    Anonymous Coward

    Missing the transition and the competition is getting hot in this space

    I think all of the comments are spot on and the article is interesting in a number of ways:

    1. NetApp missed the transition from a purely storage product player to a solution provider with FlexPod. Partnering with Cisco is a good idea, but everyone else is partnering and differentiating value in this space is a challenge. Look at the dissolution of VCE and EMC taking over full stop. NetApp needs to move to a solution provider and away from a one trick pony shop. The competition in this space is white hot and everyone is playing from Nutanix and Simplivity - the new darlings of the market to Hitachi to HP - the converged space is becoming the next battle field for the enterprise spend. I have to wonder what NetApp is thinking in this space as the partnership with Cisco keeps them out of a good deal of the market. I bet that NetApp is trying to figure out how to run OpenStack on their hardware and deliver a converged solution around the community. It is only a matter of time before they deliver this platform.

    2. NetApp missed the mark with the transition to scale up and out technologies with cDOT. There is no question that the technology is interesting, but NetApp has still not delivered a feature complete platform that rivals the regular DOT - MetrocCluster support is just hitting the market and is a requirement for many clients on a global and local scale. This has been over a decade in the making and the competition is not letting up and clients are afraid of the transition from their beloved dual head cluster to the unknowns of cDOT - FUD time for the competition. I am betting that over 90% of the shipments by NetApp are traditional two head clusters and they have been lucky to keep up with their clients and the Intel processor bump curve. This is starting to end in the market as enterprise clients do not want to upgrade-migrate as it has huge risks associated with the movement of the data, regardless of how simple it is to do - outages are costly and risky. Not to mention that I cannot think of a single acquisition that NetApp has made that has been successful - they still have not learned how to integrate the people and technologies from acquisitions into their culture and core - this is a huge challenge that they need to overcome so they can continue to innovate, which takes us to point #3

    3. Speed and Quality are suffering. Traditionally, NetApp has been quick to market with innovations and delivering value in their features-functions that their clients and the market rallies around, but as of late they have been eerily quiet. Other than an all flash array, which adds yet another silo to a company that prided itself on a single platform (shall we not talk about the LSI Block Storage Acquisition), there has not been any major innovation from the company while the competition has surrounded them and it chipping away at their stronghold - reminds me of The Keep scene in the Hobbit - watch out for those Orcs! Also, the quality of the software and hardware has not been what the enterprise clients expect. There are stories of failures of components and software quality that has caused large clients to lose data and switch to other NAS platforms - the core of NetApp's business is hurting as they try to be everything to everyone instead of true to their core capabilities and integration. This is one place where I still think NetApp shines - the ecosystem of partnerships that they have built and their seamless integrations, but it comes at a cost of more of a mid-market focus versus being a truly enterprise player.

    4. The Internet Of Things and The Cloud. This is an all to apparent reality for the market - everyone is looking at how to put their data in the cloud - maybe not for production today, but for Business Continuity, Data Protection and Archival it is a reality and production is not far behind. There was some market research that I saw that said Amazon did about $2.8B in revenue for their cloud displacing some $15B in infrastructure acquisitions - this is starting to hit home for all of the major vendors and they are running to adapt to stop the bleeding of the cloud. I think there is acid rain falling on the vendors from the cloud and it is eating away at their revenues and profits.

    I look forward to a lively discussion a learning more from everyone's perspective.

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