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NetApp Debuts Multiprocessor NAS Devices: Page 2 of 3

Taneja says NetApp does have some large corporate customers but notes that the biggest clients typically use NetApp’s appliances selectively within certain divisions or workgroups rather than throughout the corporation. This product release, he adds, could lead to more widespread market respect for the company.

Taneja notes that prior to the current financial downturn, NetApps was selling its products at 30 to 40 cents per megabyte while EMC’s prices were much higher. But that’s changed. “Now, with the new economy, EMC is fighting tooth and nail on pricing,” he says. “It’s become a battle of the giants within the NAS space.”

EMC claims to be the NAS leader this year with its Clarion IP4700 appliance. But thanks to this year’s slump in information technology spending, neither company is going gangbusters. EMC’s overall sales (EMC doesn’t break out NAS sales in its earnings reports) for the most recent quarter were off 6 percent from a year ago while NetApp’s fell 13 percent.

That downturn should not last long, however, if Taneja is correct in his assessment of the industry. He expects the market for NAS and SAN products to grow tremendously over the next few years. The return on investment is attractive for IT managers, he says, because “fewer administrators are needed per terabyte and demand for storage administrators is unabated.”

He also expects that in the near future competition for high-end sales will come out of the blue from the startup BlueArc Corp. “On paper (BlueArc’s) product looks extremely good and early indications from customers look good as well,” he says. “But they still have some proving to do.”