NetApp CEO roasts rivals Dell and HPE

NetApp has been the leading independent branded storage vendor for years, with only companies like Dell Technologies and Hewlett Packard Enterprise enjoying higher storage market share due in part to sales accompanying their non-storage system sales.

That independence, combined with an early realisation that business users will eventually look to the cloud as a way to store data in a flexible, scalable fashion, enabled NetApp to be the first major storage vendor to invest in taking data to the cloud.

But NetApp has gone further than storage in the cloud. The company has acquired a number of cloud-native but not storage-focused technologies aimed at giving it a competitive edge not only on the storage side of the cloud, but also on the management side in hybrid multi-cloud technology. Among these technologies are Spot for compute instance management, CloudCheckr for multi-cloud visibility and management, Data Mechanics for managed Spark platforms and CloudJumper for virtual desktop infrastructure.

Leading the charge is NetApp CEO George Kurian, who in 2015 took the reins at NetApp as the company was struggling to overcome falling revenue and product mistakes. He has since applied his operations experience to turn the company into the cloud force it is today.

Kurian, in an exclusive interview with CRN US, said NetApp remains a strong provider of storage technology but today is so much more than that. “As we continue to pursue more and more opportunities, I think it would be important for us to lean into where customers are headed,” Kurian said.

“And I think it doesn’t mean that the places we’ve come from are less important. It just says that the places we’re headed are more expansive than the places we’ve been.”

Kurian also said that, while competitors HPE and Dell have been making moves to tie their storage infrastructures to the cloud, they have been slow to do so and risk being left behind. “I think [Dell and HPE are] doing what we did in 2014,” he said.

The storage industry and the cloud are rapidly changing, and NetApp is at the forefront of that change. Here is a look at the company and its changing role in both businesses


So how are things with you and NetApp? 

We have really seen good success over the last several quarters. You’ve seen us grow revenue at an accelerating [rate] over several quarters through COVID. Both our enterprise business, where product revenue last quarter was up 9 percent, as well as our cloud business, which is accelerating at a really good rate, have driven overall revenue growth into double digits. And that’s a basis for continued alignment with where customers are headed.

How do you define NetApp? 

NetApp is a company that helps our customers move their digital businesses forward with data as the cornerstone asset.

I ask because most people still think of NetApp as just a storage vendor. Yet NetApp, with acquisitions like Spot, CloudCheckr, Data Mechanics and CloudJumper , is more than storage now, right? 

A lot more.

Talk about that metamorphosis.  

I think we’ve seen customers use applications and data to build their digital businesses. And they do that using modern cloud architectures, hybrid cloud, multi-cloud architectures. We started our journey to move beyond storage systems with cloud storage, first as an extension of customers’ data centers, and then as a way to deploy cloud-native applications, both for primary storage as well as for all kinds of advanced data services—data privacy, data security—that complement their storage landscape. We then built out a leadership position in cloud operations with Spot that complements our storage offerings with compute management and optimisation. Our Cloud Insights [cloud infrastructure monitoring tool] now allows a customer to deploy an entire infrastructure on NetApp that’s dynamically optimized to the needs of the application and provides performance reporting monitoring so that you can truly look at your entire landscape in an integrated way. And then with CloudCheckr, you can optimize your estate, both storage and compute, for cost so that you don’t have to waste cloud resources on less-than-useful applications or on idle applications. So we feel really, really good. And you’ll see us continue to push forward far beyond our storage heritage.


Does this mean storage will be less of a core focus of NetApp? 

Storage will be an important part of NetApp, but like all companies that are progressive and growth-oriented, we have multiple growth engines in our portfolio. In the enterprise storage business, we have leadership positions in all-flash storage and now increasingly object storage. We have undisputed leadership in hybrid cloud and public cloud storage. And we’ve built a leadership position in cloud operations. So I feel really good about our innovation portfolio and look forward to serving even more customers in more ways going forward.

Do you think the definition of NetApp next year or the year after will be different from your definition today? 

It should be. As we continue to pursue more and more opportunities, I think it would be important for us to lean into where customers are headed. And I think it doesn’t mean that the places we’ve come from are less important. It just says that the places we’re headed are more expansive than the places we’ve been.

Dell recently introduced its Apex multi-cloud services and Project Alpine. HPE has GreenLake and is now coming out with Electra. These are all aimed at bringing Storage as a Service to the cloud model, similar to what NetApp has been doing. Do you see competitive pressures from these companies? Is it changing the landscape at all? 

I think they’re doing what we did in 2014. So, ‘Welcome to 2014’ is our response. We are way further ahead than any of those alternatives. And we’ve learned from what we did then, and we’ve progressed much further. Clearly, the native services that we have with the hyperscalers are one example of that, but I also think the way that we built an application-centric infrastructure that allows customers to deploy an application that’s now dynamically optimized, not statically, is light years ahead of where competitors are.


Let’s assume that NetApp is the leader here? Is there a chance that they can learn from what NetApp is doing and move faster than you did into this area? 

You should ask them that question, not me.

And do you see Pure Storage as a big competitor given that they’ve been doing probably more than the others in terms of moving toward the hybrid cloud model that NetApp is focused on? 

We respect all the companies that participate in the market. We really focus on our customers and our read on what customers wanted, and our approach to working with the cloud providers to solve those customer needs have been much further ahead than anyone else. We always believed that hybrid multi-cloud architectures were the cornerstone of how IT evolves in the next several years, and that’s proving true. We always believed that public cloud environments would need the efficiency, reliability and sort of capabilities that enterprise data management and storage providers had to offer. And we did that in unique cloud-native ways. And we believed that applications and data work together to be the cornerstones of a digital business, which is why we invested in application-centric infrastructures and cloud operations. And we feel very good about our position, and we’re going to continue to listen to our customers and work closely with the industry ecosystem to deliver on what they need.

Bringing storage to hybrid, multi-cloud environments means a big focus on the software side of storage. Is NetApp still innovating on the hardware side, or is the hardware side becoming just a place to put the software? 

We’ve always had open systems architectures on the hardware side. And our belief is that we will always lead in bringing the more cost-efficient technologies to the enterprise storage market. We continue to innovate, for example, in solid-state storage with partners like Samsung where we allow customers to put even more data into a solid-state device than anyone else in the market. We look at new ways to use solid-state devices in an array more efficiently. So you’ll continue to see us using our software capabilities together with system technologies from industry leaders like Samsung and Nvidia and Intel and others to build better systems than anybody else. But that’s aligned with our long-term perspective. I think where we are innovating in software is taking our software and combining it with the cloud architectures of the future in ways that no one else is today.


Is there a chance that NetApp might someday get out of the hardware business altogether? 

I don’t foresee that. I think we have a really good systems business. We have leadership positions in much of the market there, and I think you’ll see us continuing to support that business going forward.

NetApp has close ties with the top three hyperscalers: Google Cloud Platform, Microsoft Azure and AWS. Will you be making similar moves with any other cloud hyperscalers such as Oracle or IBM? 

We do a lot of work with IBM already. We have a lot of opportunity and we’re going to continue to execute on the partnerships we have and look at other opportunities as they come. Absolutely.

Do you think your customers really understand NetApp’s idea of multi-cloud hybrid environments and NetApp’s Data Fabric infrastructure? Or is there still a lot of learning on their part to do? 

I think broadly speaking we see the technology abilities available in the market to be ahead of where a lot of companies are, which is where there is a real opportunity for our channel, right? In the digital world, there are lots of customers that need help around skill enablement, around IT architecture evolution, application migrations, managed services. These are all really valuable opportunities for our channel to serve customers using our technology portfolio as a foundation stone.


Have all your channel partners subscribed to the idea of this multi-cloud, hybrid-cloud environment, or do you still have a lot of evangelizing to do with them? 

I think a growing number of our channel partners see what’s happening in front of them. Customers today, if you read a variety of industry surveys, 92 percent of enterprises will have a multi-cloud architecture. And you can see especially the three leading cloud providers growing at a phenomenal rate. Cloud services this year for compute and storage, according to IDC, will be a $118 billion business. So it is a massive business. And all of the big cloud providers—meaning Amazon, Microsoft, Google—are all growing at a phenomenal rate, which is further proof that multi-cloud is the de facto architecture. So I think more and more of our channel partners recognize that and recognize that we have a way to make operating a multi-cloud environment easier and simpler, and therefore enabling speed and business outcomes for their customers.

Over the last few years with COVID, we have been able to help vaccine manufacturers bring vaccines to market faster by enabling their multi-cloud architectures that process enormous amounts of data to be deployed much, much faster than anyone else. We’ve been able to take school districts that one day were in class and two days later needed to move tens of thousands of students and hundreds of teachers into remote working environments happen in a matter of 48 hours. We’ve been able to get hospitals to focus on serving patient needs rather than worrying about their IT systems availability because of our digital remote management capabilities. And so I’m really proud of the work that our teams have done with serving customers in new ways.


Do your investors understand the direction that NetApp has taken as opposed to, say, being a traditional storage vendor? 

I think that that‘s a question you to ask them, not me. I think that’s an opportunity for us to continue to talk about the new NetApp. I think we have built a large and scaling pure Software-as-a-Service cloud business over the last few years, serving thousands of customers together with the industry leaders in cloud. That is something that no one else in our industry has done. And so we feel proud of that accomplishment. But I think you should see that as a foundation on which we will build more upon.

What is NetApp’s supply chain situation for 2022? 

We work closely with the industry’s supply chain. It continues to be an area where we focus to meet the demands of our customers. The demand environment’s really strong. And so we continue to work to see whether we can fulfil all of that demand with our suppliers, and that’s a work in progress.

How are geopolitical tensions with between the U.S. and China impacting NetApp’s business? 

On the geopolitical side, we implemented a joint venture with Lenovo to serve the Chinese market, and that was done before the prior administration was sworn into office. So we continue to see China as a large market with a need for local expertise and local scale, which is why we chose to partner rather than go it ourselves. We’re very pleased with the relationship with Lenovo. We’ve seen good results. And with regard to the supply chain, we have always had a diverse supply chain to meet the needs of different markets, and increasingly the need to maintain availability as transportation networks, for example, have been disrupted. So we have a geographically diverse fulfillment and supply network.


NetApp is the leading vendor of data storage products to the U.S. government, right? 

We have a large and very successful business with the U.S. government. We are grateful for the opportunity to serve in meeting our country‘s mission.

So looking at the rest of 2022, what should we expect from NetApp? 

You’ll continue to see us working hard to serve our customers in more and more ways. We’ve got a leading portfolio of price storage services. We’ve got the world’s leading cloud storage and data services portfolio. We’ve got a phenomenal portfolio in cloud operations. And you’ll see us doing acquisitions to continue to expand our portfolio in cloud and software. I think with regard to the way we serve customers, we’ve been fortunate that we have been able to meet customers virtually, like we are doing today, and we’ll continue to meet customers where they are.

We are encouraged by the adoption of NetApp Keystone and the work that we’re doing with our channel. I think we have a lot more ways for the channel to build new business opportunities that are profitable together with NetApp to transform their relationships from more traditional parts of customer environments to cloud and DevOps and the future parts of customer environments together with NetApp. And we’re cautiously optimistic that the world is moving beyond COVID this year. We think that the world has learned a lot from the last couple of years, and we hope that 2022 allows us to build a better world together with everybody in the industry and with our customers particularly. … We feel very good about our progress and we’re humbled that we are able to have the opportunities we have. Especially at this time, it reminds us what’s really important and how lucky we are to be in the places we are.

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