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EMC is Looking Up and Finding Itself in the Shadow of NetApp’s Cloud

It has been rumored that EMC’s CEO Joe Tucci has said that EMC’s biggest threat comes not from Dell, HDS, HP or IBM but NetApp. It is for that reason that EMC has been looking over its shoulder for some time to see what NetApp is up to in an attempt to stay one step ahead of it from a technology perspective. But after attending NetApp’s annual Analyst Days last week, it is time for EMC to stop looking over its shoulder and start looking up because EMC now finds itself in the shadow of NetApp’s cloud.

Over the last two months I have attended numerous conferences sponsored by what are admittedly the leading storage vendors in the business to include 3PAR, Compellent, EMC and NetApp. During that time I have heard a good deal about each vendor’s respective technologies that include sub-volume optimization, their private and public storage clouds, shared storage infrastructures, replication software, business continuity and disaster recovery solutions as well as the differentiators between their services and support organizations. It is for those reasons that I can say that a shift has occurred in the enterprise storage space with a decided tilt towards NetApp.

Here is what I see happening on a broader scale in the storage market. As organizations standardize on a server virtualization platform, they are coming to the realization that standardizing on a single server virtualization platform is not enough. Rather, they are recognizing (whether they admit it or not) that virtualizing their storage and creating a single common pool of storage is an imperative if they are to effectively manage their emerging virtualized data center.

I realize that the term “storage virtualization” is still a dirty word in some corners of the storage world but you cannot deliver private storage clouds, public storage clouds or shared storage infrastructures without it. In fact, I argue that the only reason that NetApp’s executive management team kept using the term “shared storage infrastructure” at its Analyst Day event last week stems from the negative connotation that is still associated with “storage virtualization” and how it is still politically incorrect to utter that term. (EMC suffers from the same problem which I covered in a blog entry that I wrote back in May.)

Yet regardless of what you choose to call it, the bottom line is that organizations are not only going to want a single storage platform to deliver these storage services, they are going to NEED a common storage platform in order to effectively and efficiently deliver them. These storage services will run the gamut to include storage capacity, file and block services and multiple storage protocols to include CIFS, FC, FCoE, iSCSI, NFS and the emerging REST API that can all be delivered from a single, logical, virtualized storage platform.

It is when all of these features are factored into the equation that it becomes clear that NetApp is the ONLY storage array vendor that is uniquely positioned to
deliver this new type of shared storage infrastructure at the enterprise level
. This is not to say that other major storage providers (EMC, HDS, HP and IBM) do
not own all of these individual technologies that NetApp offers. They do.

The problem they each have is that each of their storage arrays runs on separate platforms with separate management interfaces that require different people with different skills to manage them. While some companies are clearly going to still have a need for these disparate platforms for their specific business needs, on a broader scale enterprise organizations are going to want a single storage platform that can deliver all of these different storage services.

As near as I can tell, NetApp is the only one that has this breadth of technologies and is sufficiently large from a market cap perspective to be in a position to satisfy the concerns that enterprise customers will have.

However what is working even more strongly in NetApp’s favor than its ability to offer all of these storage services from a single platform is the market’s new found
tolerance and acceptance for all things cloud storage related
. The recent economic malaise and ongoing economic struggles has only accelerated the need for
organizations to adopt shared storage infrastructures such as what NetApp offers.

So does this mean that once an organization selects NetApp its whole storage infrastructure “auto-magically” becomes a better place? NetApp certainly wants
organizations to believe that but single storage platforms can also mean single vendor lock-in which it is quick to minimize. So while NetApp does offer some options to virtualize other vendors’ storage using its V-Series, the bottom line is that its storage virtualization platform becomes its method of locking its users in.

Not that I even think lock-in is entirely a bad thing. As long as you understand that up-front, if users can truly become proficient in using NetApp’s software platform for archiving, automated storage tiering, backup, business continuity, disaster recovery, NAS and SAN, they can arguably justify the extra expense associated with its platform because they are getting so much additional value from it.

Further, it is to NetApp’s credit that it has made Dave Hitz its “storage czar” in an attempt to better educate its current and prospective customers on how to get more value from the NetApp storage capacity that they already own or plan to purchase. His challenge (which he and I discussed at length) is to find an objective way to measure and quantify storage efficiency in a storage array when technologies like RAID, storage tiering, deduplication and thin provisioning are employed.

So while I believe he is off to good start, it is also clear he has a way to go but I suspect once he is done, another book about his findings and conclusions will be forthcoming.

I cover a lot of companies from a storage perspective and I know that NetApp does not offer all of the answers. Many organizations are still going to find its
solutions too expensive, too comprehensive or insufficiently optimized for their specific needs.

However when one steps back and looks at the market from an enterprise perspective and where storage infrastructures as a whole are going in those organizations and what they need to accomplish, NetApp offers a very unique and singular offering that its competitors are hard pressed to match. It is for those reasons that I believe that its competitors like EMC are now looking at the cloud that NetApp has built and finding their clouds pale in comparison to it.

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