NetApp Steers for the Cloud

NetApp Cloud Highlights

• Has adapted its strategy, moving from being a horizontal to integrated system player
• Focuses its strategy on the Cloud – introducing Dynamic Data Portability
• Has a strong and growing relationship with AWS, Azure and other public Clouds
• Is building relationships with MSPs across Europe
• Does not offer competing Cloud services of its own
• Stands to gain from a major shift towards the adoption of Cloud services in 2014

Notes: total revenues from NetApp and VMware and Cisco’s ‘data center’ revenues included above

NetApp’s arrays have been particularly popular in data centres using VMware’s hypervisors and management software for virtualisation – so much so that a number of much bigger storage system suppliers became resellers. Perhaps because x86 server virtualisation was new NetApp overcame the usual reticence users typically have in new vendors to store their corporate data assets. All of its arrays sold today are ‘unified’, supporting
NAS and SAN implementations.
However being a small horizontal data centre player became a challenge as the major suppliers began to become fuller range suppliers through acquisition and integration. NetApp addressed this in a number of ways. In particular:

• By building its V Series arrays to allow heterogeneous attachment of arrays from EMC, HP, HDS, IBM and Fujitsu
• By partnering with Cisco for FlexPod – creating a CIandIS platform supporting VMware, Citrix, OpenStack, SAP, Microsoft, Oracle and other software/applications
• Shifting its product focus away from hardware with its Clustered Data ONTAP software – it now offers FlexArray for instance as a software-only version of the V Series

It still has good business from IBM (N series), Fujitsu (vShape) and others. However it is now sees Cloud Computing as the next phase of development and wants to become a major supplier to Managed Service Providers (MSPs). It recently became the first partner to provide private storage to Amazon Web Services (AWS).  It invited a number of other analysts, CIOs and MSPs to London to share experiences and discuss its strategy. You’ll be interested in the implications.

Elephant Racing and Dynamic Data Portability

NetApp sees the Cloud as the new reality of IT delivery. Its approach is to help the development of seamless services, where a user will be able to dial in and out of private and public Clouds. However it recognises a number of challenges making the adoption of hybrid Clouds difficult – in particular issues of performance, access, availability, governance, security and data protection. It insists that the Cloud is not just about fast access to compute resources, but recognises that data is currently the slowest element – analogous to trying to race elephants. It sees its role as an infrastructure (rather than service) provider, with a desire to work with as many third parties as possible.
Back in September 2013 it announced a strategy to use its Clustered Data ONTAP software to extend data management to hybrid Clouds, building what it terms a Universal Data Platform and to create Dynamic Data Portability through extending the functions of its SnapMirror data replication software. It believes that ultimately the Cloud will become a Data Platform alongside its role as a new form of application delivery.

The CIO Experience – Any One for Data Stewardship?

However one of NetApp’s other strategic views that CIOs will eventually become ‘data stewards’ was not one held by the small CIO panel, which addressed the meeting. These 2 end-user companies demonstrated the growing maturity of Cloud usage in the UK, which NetApp believes is more advanced than most of Europe, but behind the US. In particular:

• The first is a media company with 37k employees. It built 3 new data centres 2 years ago and runs an on-premise private Cloud to 170 locations across the globe. Already using Cloud services from Amazon, Rackspace and others, its found that its users don’t really care where the service is run from. It has to work on separating core from potential Cloud applications, but doesn’t see Cloud as an IT issue, more a question of SLAs and costs. It would put more applications out to the Cloud if the contracts were easier, but finds its hands are often tied on issues such as data privacy and the right to audit. Therefore its main obstacles to Cloud service adoption are legal and contractual rather than technical. It sees all the major vendors offering public Cloud services, but is particularly interested in management tools, single pane of glass consoles and orchestration with a view to immediate consumption. It suggest that you can make things easier by aggregating as you go along when adding a lot of other people’s data to your own in certain applications. It sees EU legislation changing in the next 12 months to allow it to leave personal data in other EU countries rather than just in the UK as it does now – a hybrid Cloud strategy should allow you to move data from one place to another.
• The second is runs case management systems for Government social care and is expanding to offer its services to the legal profession. Its 3 main challenges are handling the information governance issues, working out the software licensing issues and ensuring availability for services which can’t fail. In the social care area it has to comply with the same rigorous legislation mandated by Central Government as its customers, so knowing where the data is very important. In the legal area compliance issues have made public Clouds a ‘no no’ – it has to provide a full audit trail and is involved in providing a community Cloud, data backup services and Microsoft services on a private Cloud linked to public ones. Shifting the applications can be difficult – it reports that one of its internal applications ran on 12 separate servers, so it can reduce the TCO significantly by re-engineering the software. It notes that Microsoft licensing becomes very expensive when providing service to more than 100 people. At the moment it runs everything from its own dual data centres and isn’t able to make use of other Service Providers yet.

It was impressive to see the extent to which these 2 companies had embraced the Cloud in their operations, although there are clearly still legislative and cultural barriers to adoption for both. For them there are clearly fewer technical barriers than before.

The MSP Opportunities

We also heard from a number of MSPs keen to tell us about their business, use of the Cloud and NetApp offerings. In particular:

• Fujitsu UK provides Cloud services with UK specific requirements to government, defence accounts and others. It hosts application on IBM Power and Sparc platforms as well as those on x86 servers. It sees huge data sets still prevalent for the Disaster Recovery and High Availability services, while a hybrid between public and private Clouds is more typical for new workloads. As an MSP it wins customers by taking the investment risk and offering customers a different commercial model to investing in their own data centres. It noted that understanding the limitations of product licensing is an important consideration in choosing which platform to use.
• Unitt – an MSP based in the Brussels, has a number of High availability and Business Continuity projects in place based on its Zero Data Loss Service. It sees technology, economics and knowledge as the main drivers of its business and believes it has better people than its customers. In the Benelux he sees a lot of differences in attitudes towards hybrid Clouds with everyone being very hesitant in Belgium (where Amazon and Azure are not big), a huge interest in Holland, while Luxembourg remains very local. It tries to fit is services to each, allowing auditing to show where files are located if necessary. As a smaller MSP NetApp is helping it make propositions.
• City Of London Technology (COLT)  – provides partner management over fibre networks linking 20 data centres across Europe. Unlike the CIOs its business will be better if the data residency laws stay as they are. It’s stopped using the word ‘Cloud’ – preferring ‘agile infrastructure’ and sees public Clouds as a massive beast lacking the flexibility Enterprise customers need. It provides hybrid Cloud services, extending workloads off-site while providing appropriate security and governance. Its seen changes since 2010 when media companies, Spain and Italy (because of the economic troubles there) were early adopters; nowadays finance and insurance companies as well France and Germany are starting to get into ‘the innovation curve’. It reports that its business in local government, Cloud VDI and Workspace as a Service are its fastest growing services. It sees big changes in the way business its business is done with business outcomes and workloads – not technology being the main subject. It often sells to Line of Business concentrating on business agility rather than selling arrays to IT managers as before. Rather than offering a public Cloud it offers physical data residency from European-based resources.
• Adapt – a UK-based MSP with 8 data centres connected via dark fibre and expanding its business into Asia Pacific. Its business includes on-boarding before offering applications back to its customers as a service. It doesn’t really have a vertical market strategy, but tends to do well when the economy is bad. In the last 2-3 years it did very well from Retail customers, although it sees them investing in their own data centres increasingly today. It notes that customers can have a more intellectual conversation about Cloud adoption if they can strike off some of the cost, security, compliance, disaster recovery and High Availability issues. Understanding the customer’s data centre is key to its business in the early phase of building its services.
• Deutsche Börse Cloud Exchange – having successfully set up its Energy Exchange it has now launched its Cloud broker business aiming to create a spot market between providers and consumers of Cloud services. It offers services on standardised legal and product bases through simplified Cloud orchestration software, which promises to save consumers a lot of time and money. Its settlement software, based on Open Stack and CIMI APIs, gives service providers a new channel to market and access to complimentary services. Its initial target is the middelstadt companies in Germany and intends to expand into the rest of Europe and the US later. It believes that users and purchasers of Cloud services are best separated, which can be done through standardisation

In Europe many of the 33k MSPs will go out of business as the large vendors – old and new – launch their own public Clouds. NetApp – like Dell – doesn’t compete against them as it has no regional data centres of its own. However it needs to be agile in meeting their needs, making sure that its Enterprise users value its offerings enough to seek out NetApp-powered MSPs when turning to the Cloud. It also needs to provide a rationale for ISVs to continue to support its arrays and software as their software and licensing regimes shift into SaaS models.

Some Conclusions – It’s not What, but When with Cloud

The conference demonstrated NetApp’s shift in focus towards the Cloud and was an excellent opportunity to discuss the current state of play with a number of customers, MSPs and analysts. For me there are a few key messages I’d like to pass on. In particular:

• CIOs should not be afraid to embrace the use of public and hybrid Clouds. Like the 2 customers on our panel they need to focus on understanding which applications are core and outsource those that are not
• CIOs, vendors and MSPs need to keep abreast of changing legislation – especially in the EU, where its seems likely that country-specific data jurisdiction laws will be relaxed, opening up a wider continental business
• Most of the barriers to Cloud adoption are now about cost, culture and politics rather than technology – although we need storage experts like NetApp to focus on getting the elephants to race effectively

I’ve been impressed with NetApp and its ability to shift emphasis as the market changes. It succeeded to move from a horizontal to integrated approach through its partnership with Cisco and VMware for Flexpod, which now have over 2,400 customers worldwide. For around 5 years Cloud Computing has promised to be the next step in IT and its most important since the introduction of Client/Server computing in the early 1990s. It’s no longer a question of what it is, but when it’s going to be adopted that will make a break supplier fortunes. 2014 is proving to be a critical year and NetApp seems keen to take advantage.