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Former NetApp CEO joins Cohesity board, discusses Dell-EMC

Dan Warmenhoven says Dell-EMC could lead Cisco to make a move, sees Amazon cutting into business from large storage vendors, and Cohesity challenging EMC's Data Domain.

Dan Warmenhoven re-entered the storage business this month when he joined startup Cohesity's board of directors.

Warmenhoven, NetApp's CEO from 1994 to 2009 and its chairman until Sept. 2014, said he will advise Cohesity CEO and founder Mohit Aron on strategies for running a storage company. Cohesity came out of stealth in June with an appliance designed to handle all secondary storage functionality.

We caught up with Warmenhoven to ask him about Cohesity's role in secondary storage, why it is a threat to EMC's Data Domain, and how the cloud is affecting large storage vendors such as NetApp.

What prompted you to get involved with another storage vendor, and why Cohesity?

Dan Warmenhoven: Now that I'm no longer with NetApp, I felt free to get involved with a storage company. I don't want to compete with NetApp, I still have a ton of friends there, and it feels inappropriate for me to lead the charge against them. But Cohesity is complementary. Even though it's in the space I know and understand, it's really all about secondary storage. The real threat is more towards [EMC's] Data Domain and those kinds of [disk-based backup] products than it is to NetApp.

What is Cohesity doing differently than others in the market?

Warmenhoven: Let me contrast it to Data Domain. Data Domain devices are not networked, and that's a big issue. You fill one up, get another one, and put them side by side. It's like tape volumes. Cohesity is trying to build an index of all objects you have stored and it allows you to network all devices, find objects anywhere, and mirror them across the wide area. You can use it for business continuity. I don't think Data Domain does that at all. Cohesity represents a much more advanced view of the role secondary storage could play in the enterprise, and the functionality that would be required. It's next-generation. When you get down to it, there hasn't been much innovation in that space in 10 years, and it's time. I think they have a great vision on how to address it.

How active will you be with Cohesity?

Warmenhoven: Most of my activity will be as advisor to Mohit. He's a really bright, aggressive young entrepreneur, but he's never been a CEO before. There is nobody else on the board who is a former operating executive, they're all venture capitalists.

Mohit certainly doesn't need my help on product issues, he's quite capable in that regard. He doesn't have a lot of background in sales and marketing, or things like pricing, financing, what should the business model look like over time, and so on. Those are the areas where I can have the biggest value.

How much has the storage industry changed since you were NetApp's CEO?

Warmenhoven: Enterprise IT infrastructure in general is contracting. You can't lose $7 billion [in revenue] to Amazon and not feel the effect.

Vendors like EMC and NetApp are certainly challenged with their storage businesses. The buying pattern of enterprise CIOs is to buy more services as opposed to assets. Every CIO has the objective of going asset-light and buying less and less each year. That has an effect, not just on storage but on servers and everything else.

I think the growth rate of the storage market has been negative for several years, although I'm not sure the IDC data has shown that. There are all kinds of new issues. What is the risk to a storage vendor like NetApp from Amazon? And not just Amazon, there's Microsoft Office 365, Google Apps and a variety of other cloud-based alternatives to on-premise storage and data management. That's changed the landscape a great deal.

Technology has also had an effect. You look at flash storage, at one point here were 16 companies that did flash [array] storage. Pure just went public, Violin had another tough quarter, Nimble had a challenge recently, there's a shakeout in progress. A lot of those 16 are no longer around. There's a combination of technological change and business change. The mega-service providers -- the Microsofts and Googles and Amazons -- are having their effect.

Were you surprised to see EMC get bought out?

Warmenhoven: For years there was the rumor that used to alternate every six months between Cisco buying EMC and Cisco buying NetApp. IBM was going to buy NetApp [according to rumors], and on and on. So I'm not surprised EMC was acquired. I guess I'm surprised it went to Dell because Dell has so much debt.

Now the pressure is really on Cisco to do something. It used to straddle relationships between EMC and NetApp, play both ends. Now that EMC is gone, Cisco has to make a decision about what they want to do. I'm not involved, I have no visibility into it, but if I were Cisco, I'd be making a move about now.

What about your old company? What does NetApp have to do to make it through all the changes in the industry?

Warmenhoven: They have their own series of challenges. They're going through a conversion of the old architecture to the new cluster mode. That's a challenge even moving their own install base. This is the first time in 20 years that the customer had to reformat the data on the disk to do an upgrade. That creates some significant operational challenges.

They're still working their way through that. I also think they were slow to focus on partnering with some service providers like Verizon and AT&T; they didn't bring enough focus to that early on. ServiceNow used to be customer and NetApp never felt that was a big enough customer to warrant a direct relationship. That was a bad decision. They've been slow to move to new markets, and that caught up with them. It's not too late but that makes it harder.

They have their own internal problems with the migration to cluster mode and they've got some market position issues they have to address. But I have a lot of confidence in George Kurian to sort it out. George is a very smart guy and he'll figure it out. I think he'll do well.

How do you see Cohesity's competition in the secondary storage market?

Warmenhoven: I wonder about [backup software vendors] like Veritas and Commvault: Are they friend or foe to Cohesity? I think they're mostly friend. There's an opportunity for Cohesity to be the back-end and provide great value for the customer. I don't view them as a threat as much as a potential partner.

The real opportunity here is to associate with next-generation replacement products for Data Domain. That product line has not evolved much since it was acquired by EMC, and there's a big installed base that I think is susceptible to a new approach.

Cohesity is not the same type of product as Data Domain, but it would fit into the same type of use case. Data Domain is dense but not vertical. It has no wide area mirroring capabilities and things like that, which are all designed into the Cohesity product. I think this can be not only an alternative to Data Domain but a step forward to the Data Domain customer.

Do you think about becoming a CEO again?

Warmenhoven: I'm over it. I had an almost 20-year run at NetApp. I felt like I achieved a great deal. I'm done. I just turned 65, I'm not about to start something new now. I'm having too much fun advising the younger crowd that has more energy.

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