NetApp founder shares tips for storage on a dime

Dave Hitz on how the economy is affecting start-ups and the storage industry

Developments of the week in storage

We continue our conversation with Dave Hitz, founder and executive vice president of NetApp, about his new book ‘How to Castrate a Bull: Unexpected Lessons on Risk, Growth and Success in Business.' Today, Hitz shares his tips on surviving in storage business in this economy.

In this economy, what type of start-ups do you think we will see coming out this year?
 
There is an opportunity both for start-ups and for companies that are already doing something to change their zone of attack. One of the lessons in the book is [NetApp Vice Chairman] Tom Mendoza's lesson that customers only open their wallet when they are in pain. His idea is that people don't buy your technology because it's cool -- they run their spreadsheets and buy your product to solve a problem they have. The interesting thing about economic downturns is they create an enormous amount of problems, which is an opportunity. The one characteristic of all the problems is that you suddenly have less money than you had before.
 
How does that create opportunity?

Maybe the best way is to look at one particular story of how NetApp faced the first economic downturn. In the late '90s, NetApp had been trying to crack the financial sector and investment banks for years. Every time we went to visit them, their message to us was 'everything we are doing works, and we have lots of money. So the fact that your product is cheaper is of no interest to us. Why would we change?' We were locked out. They had so much money that saving money wasn't an issue. Why would they do anything? After the dot-com crash, the banks were in real trouble. The message that NetApp can help you do the stuff you do more efficiently or a whole different way to save money, suddenly changed into a more interesting model.
 
To get more concrete in the tech industry, anyone that has a more low-end approach is likely to be successful. We've been successful competing against EMC's Symmetrix for a long time. Cloud computing is pretty interesting because customers don't even have to buy anything, they just let someone else buy it. VMware and related things are big. Instead of people thinking this is the best possible solution, they will say this solution is good enough considering -- any product that has the characteristic 'being good enough considering,' is likely to be successful in this environment.
 
In storage, what are some of the features or products a vendor might offer given the economy?
 
One of the issues NetApp has been exploring for a long time is the whole idea of storage efficiency -- how you store more stuff on fewer spindles. Even things like using Serial ATA drives, data deduplication, thin provisioning, cloning -- those things are now front and center of what people want to look at -- the whole idea of how I can get all this data I'm storing on fewer spindles.
 
Another area that has been big for NetApp is our linkage with VMware. A lot of people view VMware as 'Is VMware as good as owning a full-time computer yourself?' Maybe not, but is it good enough considering -- absolutely. So it's more like using 'get more for less' technologies, like deduplication … and making more of what you've got. Anything that drives up utilization. A get more for less technology is a good way to put it.

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We continue our conversation with Dave Hitz, founder and executive vice president of NetApp, about his new book ‘How to Castrate a Bull: Unexpected Lessons on Risk, Growth and Success in Business.' Today, Hitz shares his tips on surviving in storage business in this economy.

In this economy, what type of start-ups do you think we will see coming out this year?
 
There is an opportunity both for start-ups and for companies that are already doing something to change their zone of attack. One of the lessons in the book is [NetApp Vice Chairman] Tom Mendoza's lesson that customers only open their wallet when they are in pain. His idea is that people don't buy your technology because it's cool -- they run their spreadsheets and buy your product to solve a problem they have. The interesting thing about economic downturns is they create an enormous amount of problems, which is an opportunity. The one characteristic of all the problems is that you suddenly have less money than you had before.
 
How does that create opportunity?

Maybe the best way is to look at one particular story of how NetApp faced the first economic downturn. In the late '90s, NetApp had been trying to crack the financial sector and investment banks for years. Every time we went to visit them, their message to us was 'everything we are doing works, and we have lots of money. So the fact that your product is cheaper is of no interest to us. Why would we change?' We were locked out. They had so much money that saving money wasn't an issue. Why would they do anything? After the dot-com crash, the banks were in real trouble. The message that NetApp can help you do the stuff you do more efficiently or a whole different way to save money, suddenly changed into a more interesting model.
 
To get more concrete in the tech industry, anyone that has a more low-end approach is likely to be successful. We've been successful competing against EMC's Symmetrix for a long time. Cloud computing is pretty interesting because customers don't even have to buy anything, they just let someone else buy it. VMware and related things are big. Instead of people thinking this is the best possible solution, they will say this solution is good enough considering -- any product that has the characteristic 'being good enough considering,' is likely to be successful in this environment.
 
In storage, what are some of the features or products a vendor might offer given the economy?
 
One of the issues NetApp has been exploring for a long time is the whole idea of storage efficiency -- how you store more stuff on fewer spindles. Even things like using Serial ATA drives, data deduplication, thin provisioning, cloning -- those things are now front and center of what people want to look at -- the whole idea of how I can get all this data I'm storing on fewer spindles.
 
Another area that has been big for NetApp is our linkage with VMware. A lot of people view VMware as 'Is VMware as good as owning a full-time computer yourself?' Maybe not, but is it good enough considering -- absolutely. So it's more like using 'get more for less' technologies, like deduplication … and making more of what you've got. Anything that drives up utilization. A get more for less technology is a good way to put it.

Deni Connor is principal analyst for Storage Strategies NOW and host of both the Masters of Storage and Masters of Servers Solution Centers.