Q You reported very strong third quarter results this week after posting a net loss last year. What did the company do to turn the business around?
A The results were very positive and well received. A year ago, we and the market were in a different space and we so made some organisational adjustments, including job losses.
Two things happened to change the situation: the market stabilised and that began in the second quarter of 2009, and we also moved into the area of storage efficiency – helping customers understand how to use their storage more effectively. We’re helping companies save money and part of that was to introduce the 50% virtualisation guarantee, where we said that customers would see 50% savings in their storage costs using things like deduplication and other key technologies.
We also started talking differently about ROI and payback. In the recession many companies saw decision-making layers evaporate. Instead of people with a technology bias, operational budget went away and everything went through the CFO who was interested in the commercial value.
Q Where do you fit in with the world of cloud computing?
A Our strategy for cloud comes back to the core values of driving storage efficiency and cost savings. Our proposition to service providers is one of storage efficiency and therefore power cost efficiency.
Companies won’t suddenly rip out their infrastructure and go to the cloud, but they will start to “rightsize” their infrastructure .If you look at the public and private cloud, I think companies will want to retain critical applications in in-house. But over time they will want flexible services – using the public cloud occasionally when demand requires.
Q Apart from cloud computing, what other trends are happening that effect the storage market?
A The public sector will be interesting to watch with £70bn savings to be made. I think central and local government bodies will issue a challenge to industry. If you’re the owner of a large outsourcing contract customers may start looking for more cost effectiveness from you. Our proposition is strong here.
Consolidation is also a key area and the whole utilities piece is a huge driver towards costs savings. One customer BT found that by creating a dynamic desktop and data centre environment predicated round VDI VMware and NetApp, it was able to save 221/2 tonnes of equipment. reduced racks from 660 to about 60 and made power savings of £11/2 to £2m a year.
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Virtualisation is of course a trend and we’ll see much more around solid state and how to use memory caching to accelerate applications.
The demand for data is still growing and there’s a huge amount of information out there that has yet to be digitised. NetApp can help companies manage that data growth and reduce the need for further assets. But as data is growing and needs to be put on storage, the challenge is that customers say: we don’t want you to sell us more, but we want to get more out of what we’ve got.
