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Technology Stocks : Network Appliance -- Ignore unavailable to you. Want to Upgrade?

To: jhg_in_kc who wrote (3298)	5/17/2000 10:45:00 AM
From: DownSouth	Read Replies (2) \| Respond to of 10934

Thanks, jhg. I will take a stab at it. I do not view NTAP to represent a significant competitive threat to EMC. If you listen to the NTAP conference calls it is clear that NTAP management recognizes that their main challenge is scalability. Let me rephrase the second sentence from my perspective: If you listen to the NTAP conference calls it is clear that NTAP is working very hard to increase the scalability of NTAP filers to compete with EMC more effectively at the upper end. In fact, they have alluded to an effort to scale to 6TB per filer very soon. (Dan W once stated that getting filers to scale to 6TB would take that argument away from EMC.) I believe that Dan said a cc or two ago that NTAP has a 75% win rate in EMC competitive situations and, when asked, reaffirmed that in the next cc. Remember, the emerging storage-centric paradigm is not about hardware or software. It is about people and productivity. No argument there, except that an important nuance to this is that the "people" include not only sys admins and IT folks, but also the folks hitting a web cite and/or accessing a database. Web masters recognize that the quality of the web client's experience is very important. So the responsiveness of the web host's infrastructure is critical. NTAP's filers enhance response time and system availability because of their unique internal architecture. The overwhelming need is to scale the productivity of storage administrators as fast as storage demand is itself growing. The reason companies look for solutions beyond traditional processor-attached storage is that this architecture does not scale productivity very well. Be sure to understand that NTAP filers are not "traditional processor-attached storage". They are "storage appliances" which are designed to do one thing--serve data. NAS is an attractive stepping stone, especially for small to mid-sized organizations, because it is "cheap" and provides an immediate productivity boost beyond what can be achieved with processor-attached storage. However, as storage continues to grow the scalability limits of NAS are themselves reached and the problem reasserts itself at a higher level. This limit is currently somewhere in the low terabyte range. NTAP's current top-end product, the NetApp F760, offers up to 1.4Tb of storage capacity. By contrast this would be considered a small Symmetrix configuration. The fact that a single NetApp filer has a 1.4TB storage limit today does not mean that a NetApp customer has a scalability limit. Adding additional filers to the storage infrastructure is trivial (and requires no support from NetApp). An entirely new filer can be unboxed and in production in less than an hour. Adding drives to a filer can be done with no interruption of service (a benefit of RAID 4). Also, the sys admin resources required to keep a NetApp filer running are very small. The machines are extremely reliable and simple, require no file re-orgs or de-frags, allow users to retrieve their own file backups (SNAPSHOTS) with no sys admin intervention, and report soft and hard failures to sys admin (and to NetApp). Facilities for hot spares and soft failover also reduce the burden on sys admin and maximize system availability. SAN/NAS integration for file backups also maximize sys admin productivity and system availability. The large majority of NetApp customers have multiple filers connected and serving data to multiple applications servers (web servers, e-mail servers, database engines, application servers). Usually (especially at ISPs), the filers are on a dedicated LAN (fast e-net, ATM, FDDI) connected to the app servers, eliminating traffic impact on client/server connections to the app servers. So adding capacity to this "filer farm" is as simple as unboxing, connecting to the dedicated LAN, booting, assigning TCP/IP address(es). There would be scalability issue if the customer requires a single file to be in excess of 1.4TB, but this is extremely rare, and the customer has some very difficult problems in any scenario with such a huge file (backup, recovery, etc.) Understandably, the market covered by this storage range is quite large and growing rapidly, which is one of the reasons EMC bought DGN to provide products targeted at this market. The EMC value proposition is that customers can easily integrate CLARiiON and Symmetrix systems and can "grow into" the EMC product line as their storage demands continue to increase. This is a classic solution to the "innovators dilemma". Rather than adapting to the disruptive technology as a solution, the disrupted innovator attempts to create, buy, or OEM products that will migrate customers from the disruptive technology to the disrupted technology. As I have said before, the real result of EMC's NAS strategy will be to greatly reduce erosion of its installed base of customers, but in open competition with NTAP this strategy will not be effective. I certainly agree that there is plenty of business to go around for EMC and NTAP. I also believe that the two solutions have their own strengths--EMC= scalability; NTAP= reliability, simplicity, and speed. EMC would find it difficult (or impossible) to support a large e-mail or news server application; NTAP would find it impossible to support a large mainframe application, for example. I also 100% agree that investors should not see a choice between EMC and NTAP as an either/or situation. They will both make you lots of money, imo, and more than most any other tech investment in the long run, imo. I do contend that NTAP is a competitive threat to EMC. NTAP certainly sees EMC as an obstacle to its goal of dominance of the storage market and is moving its products and its sales force to meet that obstacle aggressively.