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Network Appliance has a spectrum of NAS products to cover various market segments and specific functions. The line spans from the FAS250 which is an entry level NAS targeted at workgroup and small department environments, to the mid-tier and higher. The F800 series which includes the F810, F825, and F880 covers a broad range from the mid-tier to high end. The FAS900 series with the FAS960 and FAS940 models is targeted at the high end or the market with greater performance and connectivity than other models. The NearStore series of products (currently the R100 and R150) use less expensive ATA disk drives and is focused on reference data, regulatory compliance markets, two-stage backup solutions and less demanding NAS applications. The gFilers are gateways that are the NAS controllers (or heads) without the disk storage attached to allow usage with SAN or external shared storage. All Network Appliance products use the same base software (Data ONTAP) and provides commonality of function. New capabilities introduced recently, in addition to NAS functions support NFS and CIFS of NAS, block I/O through fibre channel is available in some models as well as block I/O with iSCSI. While Network Appliance does have wide coverage of the market with multiple products, the most distinguishing value of Network Appliance comes from their add-on software. There is an extensive software set to provide advanced capabilities in the areas of point-in-time copy, two-stage backup, aggregated management, exploitation for databases and email applications, remote replication, and failover. If any, which products should NetApp think about discontinuing?
Network Appliance will probably reduce the number of models and eventually retire the F800 line in favor of the FAS900 (with an additional model). This has been the history when new generations are announced. The FAS250 will replace the F87 and probably get additional models with incremental differences. Having the same base code gives Network Appliance great flexibility to introduce new models and retire those that drop off in sales. Which of NetApp's products do you think will still be around in 3 years?
Network Appliance has very smartly built it's product line around the Data ONTAP operating system and additional software that runs on it such that the actual devices can change relatively quickly as long as the software will execute on the new platform. This has given NetApp great flexibility in introducing new products with very low risk from new technology. In three years, the physical models will probably all be changed but the underlying software and the advanced features will be basically the same (with improvements and new functions). What has NetApp done this year to make themselves a stronger company?
Network Appliance has made it clear that they don't want to be a player in a specific segment but want to cover the broad spectrum. They haven't insanely touted one technology that's going to take over the world like some companies (only to be embarrassed when it doesn't). They have been pragmatic in providing solutions to cover multiple segments to allow them the greatest breadth of coverage. This gives them opportunities in more than one area. How should storage managers approach buying from NetApp? Are they offering deep discounts..? Is now a good time to buy...3, 6, 12 months from now...?
Storage purchases need to be part of an overall storage strategy. Buying from NetApp should be no different than any other storage purchase as long as it's part of that strategy. We always recommend buying from more than one vendor and using that to get the best price and best terms. Storage should be purchased when needed with enough lead time for effective deployment. Postponing it may lead to severe company impacts is very unwise and risky.
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The biggest threat is still the distribution model where resellers can provide less expensive products to customers -- especially in vertical markets. The competition at the lower end is brutal -- there are many products to choose from. It's necessary to be there from a volume standpoint so that overall prices can be driven down. What direction is NetApp headed? Do you think it's the right roadmap for their future success?
Network Appliance has certainly moved towards targeting the enterprise data center as well as offering entry level products. Covering the spectrum is a great strategy. Moving towards the more demanding high end is good for them because of the higher margin it commands. As long as costs can be controlled (SG&A), they should continue to do well.