NetApp's Next Move

Well, possibly the long dance is finally over. It looks like NetApp is taking its break up fee of $57 million and leaving the party. EMC for its part is paying over $2 billion for the privilege of staying. So now what is NetApp's next move?

The good news for NetApp is they have about $2 billion dollars in money to spend and they were prepared to. Data Domain is a great company and obviously has a technology that is valuable, but not winning the Data Domain bidding war may be the best thing that ever happened to NetApp. It was a big gamble, now they don't have to take it. Here is my humble opinion of what NetApp ought to do, in order of preference.

First, do nothing, at least with secondary storage. Invest that $2 billion in yourself. In OnTap you have a great operating system and in WAFL (Write Anywhere File Layout) a great file system. Leverage these assets and own the primary storage space. When your customers need a secondary storage solution partner, don't OEM or resell with those that have best of breed secondary storage offerings. Grow revenue the old fashion way, earn it. Yes, customers want complete solutions, but they also want the best of breed. Integration does not mean that all the logo's match, it means that the parts work together. Create and extend architecture with an API set much like Symantec has done to NetBackup with Open Storage Technology (OST). NetApp has much of the groundwork there already, they can make it better.

Don't become like other manufacturers are becoming; a "reseller" of a bunch of unrelated solutions where integration is matching logo's. Instead return to your roots, innovate and make the best darn storage platform possible.

My guess is there is too much outside pressure to just be a great primary storage supplier and they will need to or want to get better at the secondary storage tier. If so do so by investing in secondary storage internally with just a little external help. What they have works fine but obviously it is not where they want it to be. They could invest additional development dollars in Open Systems SnapVault (OSSV) and their various dedupe technologies, make a few small purchases to get them there faster; Ocarina, Permabit, Exagrid or Sepaton and maybe even SyncSort who makes an excellent block level incremental backup solution similar to what OSSV does. This route would be far less expensive, quicker to market and offer robust capabilities.Reality is that NetApp probably won't go either of these routes. What I fear is a major and expensive acquisition of a major backup software application that already has dedupe built in. This path will work OK but it will be the least desirable, it won't solve the real problem and it will cause conflict not only within their supplier to supplier relationships but also in their partner relationships and they will never get out of it what they are prepared to spend for it.

Whatever NetApp's next move is, it is a critical one. That's why I feel that the best solution is to invest in something you know you are good at; ONTAP and WAFL. NetApp, take your time and do it right.