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Strategic Vendor Series: Network Appliance

NetApp is placing its bet on grid storage, Linux and iSCSI for 2005. Will it be lucky?

Grid storage, Linux and iSCSI are Network Appliance Inc.'s (NetApp) big bets for 2005. But can it continue its lucky streak?

Founded in 1992, NetApp beat the storage market's older giants, EMC Corp. and IBM to build the first NAS box in 1993. NetApp still leads this market today, although its competitors are slowly catching up.

NetApp prides itself on being an innovative company. Other notable firsts include NearStore, its nearline disk system for backing up data for quick recovery, a unified operating system that supports Fibre Channel (FC) and IP storage in the same system, support for file virtualization via its VFM software and iSCSI support across its product line.

One of the next big trends NetApp is gambling on is grid storage, more easily understood as scalable storage. Almost two years ago, the company acquired Spinnaker, which makes a distributed file system called SpinOS that can spread files and file systems across multiple NAS boxes. NetApp's own file system, Write Anywhere File Layout (WAFL), is limited to a single system and therefore doesn't scale well. To fix this problem, NetApp is merging SpinOS and WAFL into a single file system. The new product is not expected for at least another year.

Next on the list is Linux. The company plans to drive NetApp's storage technologies as far into the Linux marketplace as possible, according to Rod Matthews, senior director of strategic marketing at NetApp. The firm has hired Trond Nyklebust, right-hand man to Linus Torvolds, the head honcho of the Linux community, to help ensure that all NetApp's current and future products support Linux.

ISCSI connectivity is the third major area of focus for NetApp, followed closely by databases and Microsoft Exchange on the application side. All in all, the company has its work cut out busting down the doors of these relatively new markets. To get more of an insight into NetApp's chances of success, check out what Tony Asaro, senior analyst with Enterprise Strategy Group and Randy Kerns, partner and analyst with the Evaluator Group have to say about the company.

In which areas is NetApp strongest?

Asaro: NetApp is the clear leader in NAS. It has pulled off a coup and has been basically unchallenged until today. EMC is getting its act in this area, but the other leading storage vendors are still stumbling. NetApp has also done an excellent job of adding more and more software value to its solution set including functions like Snapshot, SnapValut, SnapLock, FlexClone and FlexVol. They have been successful in the backup to disk market with NearStore and addressing the compliance market with SnapLock. NetApp is also the leader in iSCSI and has done a great job integrating it with its existing NAS offerings.

Kerns: NetApp is very strong in leveraging their base software into new products and across multiple hardware platforms. Indeed, the software is a continuation even when there are significant hardware changes. This allows for great stability and very judicious use of R&D investments. With this philosophy, NetApp has been able to gradually expand the product portfolio without great risk. They now have expanded their market coverage and have adapted their base software architecture to support both block and file access. Being a storage-only company allows them to have concentrated focus.

In which areas is Net App weakest?

Asaro: NetApp does not have an enterprise-class storage system and cannot compete at the highest end of the market. While the high-end market is not growing substantially, it still gives NetApp's competitors a strategic foothold that NetApp cannot go after. There are a handful of startups that have very compelling NAS products with distributed clusters, enormous scalability and a single file system that can grow to 100 terabytes and above. These solutions are very competitive to what NetApp has and customers are buying these products. While these startups don't pose any immediate threat to NetApp, one of the large storage vendors could buy one of the emerging NAS vendors and create some issues.

Kerns: The presence and even the understanding of the high-end enterprise datacenter is new to NetApp. They certainly are moving in to this market -- it will take some time to establish a significant presence in the very high-end.

What is NetApp's strategic direction?

Asaro: NetApp offers any protocol to its storage, including NFS, CIFS, iSCSI and FC -- which was the smart thing to do. They were one of the first to offer SATA drives, giving users another tier of storage. NetApp positioned its products for primary, archival and B2D. And they have shared their future vision of a storage grid -- a single pool of storage that has different tiers of storage and the intelligence to manage that data seamlessly. And since NetApp understands file systems, they realize what they can do to achieve this through this level of intelligence. Further, having a single platform that could easily manage the various data within an enterprise gives them a real competitive advantage.

Kerns: NetApp will integrate the Spinnaker technology to provide grid storage in the future. They will be one of the early significant players in the market. As stated earlier, they are expanding their breadth of market coverage and are aggressively moving higher into the enterprise.

Where does NetApp have an edge over its competitors?

Asaro: Leading NAS provider and the only storage vendor that really gets NAS. Having an understanding of file systems, and the intelligence and ease of use they provide for managing lots and lots of data. A multi-protocol storage system that has been extremely well integrated.

Kerns: By leveraging the same software, NetApp can provide the same feature capabilities such as snapshot and remote replication across all their platforms in all markets allowing customers to use the same procedures and management techniques. Their roots are in providing storage with the most simple of installation and management -- which is an absolute must for customers now.

What challenges does NetApp face in terms of growing its market share?

Asaro: NetApp has to become known as more than just a NAS company. They are doing this but has more work to do. While they are the leader in iSCSI, they should be even further down the road -- add another zero to the end of the number of iSCSI installations they have. They also need to have more scalable storage systems and a larger file system.

Kerns: The competition is still fierce, and there are other vendors that have better customer relationships in the high-end markets. The NetApp products may appear to be more expensive, and the block storage capabilities may not have the same performance as products that were natively designed as block storage systems. NetApp can address these issues over time.

Additional NetApp news:
EMC chases NetApp with cheaper NAS devices and iSCSI support
Storage Clips: BlueArc smashes NAS IOPS record
Veritas, NetApp tighten integration to battle EMC
Users crack NAS scalability problems
NetApp, McData simplify SAN management
Storage Clips: NetApp, Red Hat partner on iSCSI
Bank picks Permabit for compliance; rejects EMC, HP and NetApp
Fast Guide: iSCSI
Thought Cache: Grid gobbledygook hits storage
Learning Guide: NAS
How to roll your own NAS cluster

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