Two companies on parallel tracks moving like trains offset by time: EMC and NetApp

July 1, 2010 – 3:36 pm

View from VIA Rail Canada taken using Gregs iFlip

I see some similarities and parallels between two competing companies. Those companies happen to be in the same sector (e.g. IT data storage) however offset by time (about a decade or) subject to continued execution by both.

Those two companies are EMC and NetApp.

Some people might assert that these two companies are complete opposites. Perhaps claiming that one is on the up swing while the other on the down path (have heard claims and counter claims of both being on the other path). I will leave the discussion or debate of which is on the up and which is on the down path to the twittervile and blogsphere ultimate tag team mud wrestling arena or You Tube video rooms.

I see EMC and NetApp a bit differently which you can take it for what that is, simply an opinion or perspective having been the competitor and partner of both when I was on the vendor side of the table and later covering the two as an industry analyst.

Without going too far down the memory lane route, in a nut shell, I recall when EMC was still a fledgling startup who wanted to sell me (I was on the customer side then) rebrand Fujitsu disk drives to attach to my VAX/VMS systems and memory for our mainframes. Come to think about it, Emulex was also selling disk drives back then before reinventing themselves later as an HBA and hub vendor.

Later as a vendor, around late 94 or early 95, it was the up and coming small little bay area NAS filer appliance vendor (e.g. the toaster era) that we partnered with including a very brief OEM deal involving repackaging their product which was NetApp or Network Appliance as they were formerly known then. Once that ended after a year or so NetApp become a competitor as was EMC who at the time had as the main act the Symmetrix and about to do the EPOCH backup and McData acquisitions as well as landing the HP OEM deal for open systems.

Ironically NetApp was out to knock off Auspex which happened fairly quickly while EMC was struggling to get its NAS act together with the early DART behemoth while successfully knocking out IBM and other entrenched high-end solutions. In a twist of fate, the company I was working for ended up selling off all of their RAID (initially a few, then later all of them) patents to EMC for some cash and later transitioned out of the hardware business becoming simply a VAR of EMC (that was MTI).

While at INRANGE which later merged into CNT before acquired by McData (I left before that) and then Brocade, both EMC and NetApp were partners across different product lines.

What they have in common

Ok, enough of the memory lane stuff; lets get back to where the similarities exist.

Back in the mid 90s, EMC was essentially a one trick pony with a very software feature function rich large storage system that sold for a premium generating lots of cash from its use of cache. Likewise, NetApp is a vendor that while it has many product offerings and has some acquisitions, still relies very much on their flagship NAS storage systems that are also feature function (e.g. software) rich that leverage cache to generate cash.

Both companies are growing in terms of revenues, installed base, partners/OEMs and product diversity. Likewise each company needs to continue expansion into those as well as other adjacent areas.

Can NetApp catch EMC? Maybe, maybe not, however IMHO the question should be are there other areas that NetApp can extend its reach into causing EMC to react to those, like how EMC took advantage of opportunities causing IBM and others to react.

Here are some other similarities I see of and for EMC and NetApp:

  • Both have great outreach programs where information is provided without having to ask or dig in a proactive way, yet when something is needed, they give it without fanfare
  • Both are engaging at multiple levels, from customer, to financial and investors, to var, to partner, trade groups, to trade and other media, to analysts to social networking and beyond
  • Both are passionate about their companies, cultures, products, solutions and customers
  • Both can walk the talk, however both also like to talk and see the other balk
  • Both lead by example and not afraid to tell you what they think about something
  • Both embrace social media in connection with traditional mediums for communication with people as opposed to a giant megaphone for talking at or spamming people (when will other vendors figure that out?)
  • Both also are willing to hear what you have to say even if they do not agree with it
  • Neither is scared of the other (or at least not in public)
  • Both cause the other to play and execute a stronger game
  • Both are not above throwing a mud ball or fire cracker at the other
  • Both are not above burying the hatchet and getting along when or where needed
  • Both compete vigorously on some fronts, yet partner (publicly or privately) on other fronts
  • Both have been direct focused with some vars and some OEMs
  • Both started somewhere else and now going and moving to different places and in some ways returning to their roots or at least making sure they are not forgotten
  • Both are synonymous with their core focus products and background
  • One comes from an open systems focus working to prove itself in the enterprise
  • One comes from the enterprise establishing itself in SOHO, SMB and other spaces
  • Both have many solutions, some would say long in the tooth, others would say revolutionary
  • Both are growing via organic growth as well as acquisition and partnering
  • Both have celebrity leaders and team role players to support and back then up
  • Both also have deep benches and technical folks in the trenches to get things done
  • Both have developed leadership along with rank and file employees internal
  • Both have gone outside and brought in leadership and skilled players to expand their employee ranks
  • Both are very much involved with server virtualization (Microsoft and VMware)
  • Both are very much involved in storage virtualization and associated management
  • Both are involved with cloud solutions for enabling public or private storage
  • Both are independent storage vendors not part of a larger server organization
  • Both have interoperability programs with other vendors servers and software and networks
  • Both also get beat up about their pricing models for extensive software feature function portfolios associated with respective storage solutions
  • Both get criticized by customers or the industry as is often the case of market leaders

What I see EMC needing to do

  • Articulate where their multiple products and services fit and play into their different target market opportunities while worrying less about the color hue of logos or video backgrounds
  • Avoiding competing with itself or becoming its own major or main competitor
  • Clarify cloud (public and private) cloud confusion transitioning into cloud cash and opportunity
  • Minimize or cut channel contention and confusion internally and across partners
  • Remember where they came from and core competences however avoid a death grip on them
  • Look to the future, leverage lessons learned that helped EMC succeed where others failed
  • EMC needs NetApp as a strong NAS competitor as each plays stronger when against the other. This is like watching world-class athletes, artists or musicians that step up their games or works when paired with another

What I see NTAP needing to do

  • Doing an acquisition in an adjacent space, perhaps even a reverse merger of sorts to move up and out into a broader space that compliments their core offerings. For example, something outside of the normal comfort zone which arguably Datadomain would have been close to their comfort zone. Likewise acquiring a software player such as Commvault would be similar to EMC having acquired Legato, Documentum and so forth. That is NetApp would have to do a series of those. So why not something really big like a reverse merger or partial acquisition of say Symantecs data protection and management group (aka the old Veritas suite including backup, management tools, clustered file server software, volume managers etc).
  • In addition to adjacent acquisition, opportunities plays such as the recent Bycast move makes sense however then those need to be integrated and rolled out similar to what EMC has done with so many of their purchases.
  • Minimize or cut channel contention and confusion both internal across products and with partners.
  • NetApp started at the lower end SMB, grew into the SME and now enterprise place, however they tried with the StorVault and backed out of that market leaving it to EMC Iomega, Cisco, HP, Dell and others. Maybe they do not need a low-end play, however I rather liked the low-end StorVault story as well as where it was going. Oh well, needless to say I ended up buying an EMC Iomega IX4 as the StorVault left the market. Hmm, does that mean NetApp should acquire SNAP or Drobo or some other low-end SOHO play? Only if the price is right and there is an existing customer base and channel in place otherwise it would be a distraction from the core business. BTW, did I mention EMC Legato, oh excuse me, Networker came from the desktop and SMB environment however grew to the enterprise (yes I know, that is debatable) however now is difficult to put into SOHO environments.
  • Does NetApp need a stronger block storage play, perhaps a 3PAR acquisition? Maybe, perhaps not depending on if they are competing for today’s market or tomorrows.
  • Does NetApp need to be acquired? I think they can stay independent; however they need to expand their presence and footprint from a product, partner and customer perspective.
  • NetApp needs a strong NAS competitor in the likes of an EMC as the competition IMHO makes each stronger as well as providing competition which should play well for customers. Not to mention the back and forth mud ball and fire cracker tossing can be entertaining for some.

What is your take?

Are EMC and NetApp two companies on parallel tracks offset by time and perhaps execution?

Cast your vote and see what others have indicated in the following poll.

View from VIA Rail Canada taken using Gregs iFlip

Ok, nuff said.

Cheers gs

Greg Schulz – Microsoft MVP Cloud and Data Center Management, vSAN and VMware vExpert. Author of Software Defined Data Infrastructure Essentials (CRC Press), as well as Cloud and Virtual Data Storage Networking (CRC Press), The Green and Virtual Data Center (CRC Press), Resilient Storage Networks (Elsevier) and twitter @storageio.

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