NetApp layoffs loom as biz 'operationalizes strategy', 'prioritizes investments' NetApp is preparing to layoff employees in the wake of money troubles, The Register has learned. The numbers could run into the thousands. We understand CEO Tom Georgens sent a warning email to all employees in February suggesting redundancies may be necessary for the storage biz to hit its financial targets. NetApp's business …
We are confident in our strategy and product portfolio. As discussed on our Q3 earnings call, we are prioritizing investments to drive growth and differentiate NetApp, within the boundaries of our business model. Our focus is on operationalizing our strategy to take full advantage of the opportunity in front of us.
As one who regards much of PR department statements as BS, this bit of bafflegab is pure unadulterated genius. They should bag this and sell it as fertilizer.
I don't believe the current management is capable of turning it around. In fact, you probably wouldn't want the people who created this mess to try and pull a company out of it because chances are they'll dig in an even bigger hole.
layoffs and huge stock buybacks don't create growth. Investments do.
I am sure Dan Warmenhoven would not approve. Yes, he presided over simpler times and it's probably not fair that Tom has to be measured against him, but he had a clear direction on the product strategy -- customer needs decide what's right.
Unfortunately it seems like this has been a real mess since 2010.
1. De-investing in 7-mode and over investing in what is essentially redundant C-mode. Why? Just because it was going to be the platform for the future -- except it was more expensive and more complicated and more impractical than their competition (why did anyone tell them about their clothes -- maybe they were told, but weren't listening). Reinvention is good, but not if it results in an inferior solution.
2. Missing the flash boat and then adopting a NIH policy and trying to build it yourself (what were they doing for > 2.5 years)? SolidFire looks mighty fine now.
3. Missing the hyperconverged boat and then trying to force a product with VSAN (what were they thinking there).
My advice:
1. Acknowledge your mistakes and look at acquisitions to shore up the product line in the short term -- they need a product portfolio strategy and E-series + ONTAP ain't it. BTW hire some competent folks to make it work (unlike Decru, Topio, Spinnaker, etc). Yoram is running Maxta now which seems promising or Springpath with the ex-VMware & ex-Netapp crew.
2. Clean house -- identify incompetent tenured and untenured folks and put them on plans to shape up or ship out. Rather than looking at redundancies and losing talented folks -- be a little more smart about the re-organization. I am sure this was already being done (do you still have a separate groups doing similar roles)?
3. Stop unnecessary investments -- no pet projects by execs who believe they need these to stay relevant. Operate BUs with potential like start-ups like Bycast?
4. Throw away legacy product constraints -- small investments and pivot. Don't be held hostage with monolithic design decisions. Your competition isn't paying such close attention to $1 of COGS savings at the cost of 30 days of design time nor are they being held hostage by ridiculously long qual cycles.
5. Talk to your customers -- not only your customer council customers (who may be cheating on you with other startups -- you know who you are) or your so called go-to-partners, but your customers that will have the potential to buy. This is tough -- you'll have to look at the markets and margins going forward.
Good luck!
NetApp needs to cull all the hangers on that hide away in middle management and bullshit roles that "report horizontally". Focus on selling, supporting your customers and innovation. Nobody cares if you're the "greatest place to work" in Uzbekistan. Hopefully this time the redundancies will actually get rid of some of the idiots that have made the poor decisions that have hobbled this once great company. Starting with Tom Georgens...
Every well managed tech company turns over a small percentage of it's staff occasionally, but the numbers here, like 30%, have a sniff of panic. Growth requires investment in the right places, if that means sacking a few here to make way for a few there, that's normal business. As a well meaning marketing director once said in a company I worked for (and got the sack for saying it to the CEO) 'no company ever saved its way to greatness'.
It seems Netapp has been losing quite a bit of business due to unclear direction of their cluster mode NAS solution. The company I work which uses more than 500 TB of Netapp storage across multiple filers is in the process of moving away to Isilon and Hitachi. This particularly due to pricing that is significantly higher with Netapp compared to Isilon, and also a more clear direction of cluster NAS technology with Isilon.
Its a wonder that there's never the option of spinning out a few of the internal staff as startups rather than redundancy with the parent company being the angel investor partially funding them. I guess that doesn't fit in an MBA model on how to think, make friends and influence people!
Netapp would get first bite of the cherry if the tech took off and not have to carry so many staff, but give them enough support to succeed. They could then run as a lean company to stop share price tanking, not create long term competition, keep their portfolio fresh and have a talented workforce that is indirectly supporting them with a lower risk model.
Now, where'd my whisky bottle go...
.... Meanwhile People in middle management will be updating their CV's and talking to their friends at Nimble and Pure about their next 'opportuninty' over a business lunch. At the same time the plebs will be told everything is "business as usual" by the very same people.
The ones that don't get hired by the start-up competition, will quickly proclaim their loyalty to NTAP, say they never wanted to leave in the first place - while waiting for the redundancy payout. The ones that do get the jobs will tell you how great it is. "Just like NTAP 15yrs ago - or Sun 20yrs ago."
If redundancy's do happen, HR will have an excuse for Netapp only achieving rank 15 in the Great Place To Work Survey, as redundancies happen to be so disruptive to the culture HR somehow claims ownership of.
Redundancies followed by aquisition is actually the best thing that can happen to NTAP. It's an opportunity to get rid of the institutionalized dead wood first and for the ones that are left an opportunity to be reinvigorated(or sober up).
... And whatever happened to the SUN people at Oracle is only fair after the atrocities following the STK acuisition :)
Show you exactly what GPTW is worth. Basically - nothing.
How can an employer boast being a Great Place to Work when, on an annual basis, they fire 5%-10% of their employees for no fault of their own, and keep the rest of them hanging and insecure, afraid for their livelihood, until next years layoffs?
NetApp is far from being a great place to work... it is a HORRIBLE place to work.
You spoke my mind. There should have been a gradual migration plan or dual support of 7-mode as well as c-mode and not such drastic changes in ONTAP support.
c-mode solves certain problems that couldn't have been solved in 7-mode, but NetApp could have marketed it for the customers who are looking for the solutions to those problems alone and not force the other customers also to move to c-mode.
Tough luck!
"c-mode solves certain problems that couldn't have been solved in 7-mode"
Like what?
Stuck with HA mode headroom pain, and data-locality to -a- controller head...a controller failure/maintenance/disk rebuild/etc still costs you a 50% loss of performance...or ROI if you save 40% of each head for these issues, plus disk overhead per controller leaving you only 65% usable.
I use it, but I would be an idiot no to be shopping around, aggressively as I give Netapp a 50/50 shot at being a backwater inside someone else's company, or being in a support only mode trajectory in 5yrs.
It's a _confederated_ 7mode, but was never anything special after they scrapped aggregate striping.
Knowing NetApp for years I think there's one thing missing over the years: Focussed on only Enterprise Customers is a partly focus and therefore killing, while most of the business is most profitable from the MSB-business.
From a support perspective: not listening to customers when there is an support issue is killing for NetApp to my humble opinion. Sometimes I think NetApp is worse dealing with than the biggest process based laywers firm in the world.
Innovation: C-data ontap, e.g. scale out, is commodity and flash as well, so what is the value from NetApp in delivering datacenter solutions.
Cloud connections: also commodity....
What's the next NetApp innovative disruptive game changer?
The problem really was with the nomenclature...
Data Ontap C-Mode
Data Ontap Cluster Mode
Cluster Mode Ontap
Clustered Data Ontap
WTF
Netapp internal people call it "Custard on Cr@p". And that's no surprise.
With the introduction of "C" and "7" They've literally took customers by the neck, pulled down their heads and shoved the customer's nose right into the "cr@p".
"Here's our new buggy OS, with features you probably want in 5 years time. We've also removed some features you've previously loved...."
That's very reassuring for the Enterprise Customer's NTAP was hoping to attract...
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> 1 yr behind schedule today with 1-2 more yrs req'd given 4 majors: significant challenge with high-availability, cancellation of the single-box controller & shelf platform, the ongoing hemorrhaging of the fleeing team, & a single-source SSD vendor who's EOL'd the first 2 drives qual'd for the project already with the 3rd drive having < 1/2 of the drive writes/day ability and likely to also be EOL'd before it ships. Just my opinion.
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