In a city where “doubling down” evokes images of smoke-filled rooms filled with gamblers donning shades pushing stacks of chips around a green felt table, as I detailed in this column, NetApp used its Insight conference in Las Vegas to do exactly that with a cloud-centric strategy that moves the company further away from its heritage as a storage box builder. It’s ironic that a company whose name derives from the word “appliance” has now firmly planted its flag on the promised land of software virtualization and cloud services, but like other enterprise box builders, NetApp must react to the inexorable advance of commodity hardware and cloud services on the heart of its business. Insight is NetApp’s highest-profile event, featuring the company’s entire C-Suite wooing thousands of its best customers, and of the five main product announcements, four dealt with software and the fifth highlighted new professional services designed to facilitate customers’ move to the cloud. Speeds and feeds are a thing of the past.
After a series of press briefings and individual interviews with NetApp’s top executives, it’s clear the company sees itself “as a provider of enterprise-class data management systems”, not just big storage arrays; and the cloud is the change agent. Storage technologies and products pioneered by the likes of Amazon, Google, Facebook and the OpenStack ecosystem are now seen as safe for corporate use and businesses increasingly question the need to spend 6- or 7-figures on a new storage system when they can get the same or better performance and capacity at a fraction of the cost using cloud design principles. Indeed, NetApp’s revenues have been flat for the last three years while 2014 operating income is 11% below that of three years ago.
NetApp’s answer is what they call a data fabric stitching cloud and managed services, public IaaS and on-premise virtual systems into an information quilt used by all applications, regardless of where they run. The strategy is to evolve NetApp’s storage software and management services into the unifying broker between business applications and multiple cloud platforms. The vision is of a data-centric cloud architecture, built upon a consistent storage layer that facilitates inter-cloud usage and workload movement and eliminates cloud lock-in. It’s an ambitious plan that starts by decoupling NetApp’s sophisticated data management software from the hardware, allowing it to run on third-party disk arrays, directly on virtual servers and now, natively on cloud services.
The column provides more details and analysis, however using storage as a foundation for a hybrid cloud architecture is hardly unique to NetApp, indeed its main competitor, EMC announced a set of hybrid cloud services on the same day. While I like NetApp’s approach of augmenting bulk cloud or white box storage with a rich set of services, I’m skeptical of the long-term business value since it seems to trade one form of lock-in (to cloud services like AWS) for another (to NetApp’s fabric). Indeed, one could argue NetApp would have users in more of a bind with all of their information assets locked within a single storage pool. How the company mitigates or rationalizes this lock-in potential is something I plan to explore in the coming months. In the meantime, the collective rush of IT vendors to embrace (and define) the hybrid cloud is breathtaking and fun to watch.