NetApp's CEO's survival strategy is more than paranoia
Source: searchStorage
Date: 31 Jan 2001
by: Michele Hope, Site Editor
SANTA BARBARA, Calif. A top-selling network-attached storage (NAS) vendor surrounded by a veritable
sea of storage area network (SAN) proponents might have reason to get a little paranoid.
But, that doesn't have to be a bad thing.
Network Appliance (NetApp) CEO Daniel Warmenhoven told an audience of investors attending Tuesday
night's keynote address at the Merrill Lynch Storage Conference that he mirrors Intel's Andrew Grove's
philosophy detailed in his now classic book, "Only the Paranoid Survive." With the likes of EMC breathing
down NetApp's back, who can blame him?
It's certainly not just paranoia that drives Warmenhoven, however. Indeed, his strategy and outlook on
the market and its future takes on a much more proactive position. Warmenhoven isn't moving just
because he thinks someone is behind him.
Warmenhoven, in fact, is preparing for a major storage sector restructuringa change that could have a
positive effect on NetApps growth. "It's the third wave of what's really been going on for the last 30
years," he said. Warmenhoven said storage architectures have shifted from being server-centric to
storage-centric. The third wave of storage is now upon us, he said, which is a more network-centric
architecture that favors NetApp.
Referencing Grove's book again, Warmenhoven pointed out that the market-dominating IT companies for IT
infrastructure today really didn't emerge until they developed a horizontal focus that allowed them to be
used across all main hardware platforms. This is another area where he sees Network Appliance coming out
ahead.
According to Warmenhoven, this wave began with the development of the processor and the horizontal
focus of Intel and Motorola. Adding to the rise of the horizontally positioned IT leader over the years, he
said, has been the emergence of popular operating systems (Microsoft, AT&T UNIX), networks in the 1980s
(Cisco and Nortel); followed by dominating, horizontally focused database applications in the 1990s (Oracle
and Lotus).
Much like the database application focus in the 1990s, Warmenhoven now predicts a new IT focus on data
storage and management for the coming decade. He sees NetApp as one of the key vendors positioned to
become a leader in this space. "When you look at the NT and Unix storage space, there are only two
companies who've gained market share since 1998: EMC and NetApp," he said. "Both are horizontally
focused. The big losers were vertical [hardware manufacturers]."
Recent reports indicate that NetApp captured over 60% of the network-attached storage market last year.
Warmenhoven sees little erosion of this share of the NAS market going forward. "In any case, we expect
not to lose share."
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