NetApp's new CEO talks about hybrid cloud, customer challenges

kurian netapp
Wendell Davis, NetApp

EMC isn't the only enterprise storage company going through dramatic changes. In June, former storage high-flyer NetApp announced that CEO Tom Georgens had left the company and was being replaced by long-time insider George Kurian, who had previously served as executive vice president of product operations.

In this installment of the IDG CEO Interview Series, Kurian spoke with Chief Content Officer John Gallant about the reasons for the leadership change and how he plans to deal with the financial and product migration issues NetApp has faced. Kurian explored NetApp's 'data fabric' strategy and talked about how the company is positioning itself as the best provider of hybrid cloud solutions.

He also discussed NetApp's flash and cloud storage strategies and talked about how the competitive landscape is changing for established and emerging storage providers. Kurian also explained how the company is encouraging long-time customers to move up to NetApp’s next-gen products.

A great number of our readers are, or have been, NetApp customers. George, what can you tell them about the change in leadership that occurred a couple of months back? What drove that?

First of all, Tom has done many good things for the company. He was the reason I came to NetApp and I respect all of his contributions.

We are a company in transition in an industry in transition. The IT landscape is going through fundamental change, as many of your readers are well aware. To adapt to that changing landscape we have changed the portfolio of technologies we offer customers, changed the way we bring those capabilities to market, the ecosystem of partnerships that we are developing. We have made good progress in the adoption of those new technologies but there is work to be done to further accelerate that progress across the world. The board perspective was that getting a new leader to help accelerate those changes and make faster progress across our customer base was something they were looking for.

I want to dig into some of those things that you're working on, but to clarify, at the time you were named CEO, the company said it was conducting a CEO search. Is this an interim role for you, George?

At the time I was named CEO it was an interim designation. Like all public companies, the board has a fiduciary obligation to shareholders to nominate the best candidate possible to be the permanent CEO of the company. The board, as we had communicated, undertook that search for a period of 90 days and at the end of 90 days I was named the permanent CEO of NetApp. Mike Nevens, who was the lead independent director of our board, is now chairman of the board.

Before we talk about your mission as CEO and some of the things that you’re working on, tell the readers a little about you personally. What should they know about you and what drives you?

I grew up in India at a time when the computing industry did not exist there. I came to college, undergraduate school in the United States. I am the son of self-made, entrepreneurial parents and I have a strong set of values shaped by my upbringing in a Christian household and of immigrant parents themselves. Many of the things that I see in terms of the path ahead for me personally, but more importantly for NetApp, are driven by that relentless search for greatness.

We have had a track record of 20 years of working with the best and leading organizations of the world to manage their most precious asset, their data -- to access it, to derive value and insight from it, both to improve their business performance as well as to better the human condition. At this transition point there is no better opportunity for us than to accelerate what we can offer customers over the next decade.

What are the problems you have to resolve right now and what are the opportunities you're excited about pursuing?

Overall, the leadership responsibility for the company is all about clarifying our value proposition to customers and delivering business results. When I talk to our customers the main topic of discussion is their own digital agenda. Mobile and social and various types of global value chains being deployed by our customers are founded on using data to transform business processes, derive insight about customer behavior and reach and serve new audiences better, faster and more effectively. Data is at the heart of this digital transformation and we are experts at helping people manage data efficiently as well as derive value from it. It's important for us to accelerate those conversations with customers in a noisy and changing IT landscape.

Second, we need to accelerate our growth. We've made progress against the growth of our new technology portfolio, growing it from a small percentage of our business to a large percentage, as I mentioned on the earnings call. We also need to continue to improve the performance of the business from an efficiency perspective so that we can balance growth and shareholder returns and you'll see me focus on both.

In terms of the opportunities going forward, what excites you most?

As I mentioned, customers are using data in new and more profound ways than ever before. The availability of a vast amount of computing resources allows them to both store, as well as derive insight from, the data that they have and our job is to help people navigate the landscape. It's about the technology portfolio that we offer customers, it's about partnering with the providers of capability to customers so that we can offer a whole solution and it's about accelerating our customers' ability to take on these changes both by consulting with them as well as supporting them in new and innovative ways.

Some of the criticisms that technology or industry analysts reports have raised about NetApp, in addition to financial struggles, are that the company has been slow on the development front, it's been slow to get existing customers to move to new products like clustered Data ONTAP, slow to address some market shifts like flash and the cloud. Do you agree with those criticisms?

Our approach to these technology transitions is to enable the mainstream market to adopt these capabilities. For example, in flash technology there have been lots of point products that were created for the early adopting customer. Companies like Fusion-io or Violin Memory built flash-only solutions that did not have feature sets that the mainstream customer would use and they had their run in the early adopter market where the customer only valued performance. As flash media transitions from an early adopter technology to a mainstream customer audience, the mainstream customer actually wants all the features they are traditionally used to -- high availability, replication and so on.

Our focus was to integrate flash media into the world’s best operating system so that you get flash without compromises. We are perhaps a little bit behind in the starting point for flash but we feel we are now well ahead of everybody else in the market because we are the only technology provider that can tier data between flash, disk and cloud, that can offer a rich set of data management and data protection features and allow you to derive maximum business value from flash.

With regard to the cloud itself, we’ve been very successful building on-premises private clouds. We are one of the market leaders with the FlexPod solution that we developed with Cisco for on-premises clouds. IDC has designated us as the market leader for storage for public cloud providers and we have more than 275 public cloud providers -- companies like Terremark and IBM SoftLayer and Dimension Data and T-Systems and so on -- who use our technology as the foundation of their public clouds. We are the only enterprise technology company in storage and data management who are working with the hyperscale providers, people like Amazon Web Services, Microsoft Azure and so on, so that you can build a complete hybrid cloud, seamlessly managing your data across these environments.

Our focus is on allowing the mainstream market to deploy these architectures seamlessly and not necessarily being first to market in every instance because many of those first-to-market solutions are fundamentally challenged for the mainstream market.

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