NetApp continues its reinvention into a cloud services portfolio company, which is still very much a work-in-progress.
In many ways, the inertia of NetApp’s traditional enterprise customers has helped it stay relevant. There’s a lot of investment in public cloud infrastructure, yes, but there’s still an awful lot of on-site infrastructure out there. The public cloud market is coming back to meet the on-site market to create the modern hybrid cloud market that just happens to be quite close to where NetApp already is.
A lucky break, to be sure, but NetApp still has plenty of work to do to adapt to the changing market conditions.
NetApp has found, much as VMware discovered, that developers prefer cloud systems that look like cloud systems, not like traditional on-site systems. Yet as storage people go into the cloud they tend to be disappointed by the lack of data services in cloud offerings, particularly the in the world of cloud-native and Kubernetes. Yet AWS (or Azure, or GCP) is what developers want to use, and that’s why we see AWS making friends with the traditional infrastructure companies that it once decried. The public cloud is no longer the One True Way of doing everything because the customers that AWS wants to sell to have changed. Those who use a mixture of technologies to solve their more complex problems need more than a single hammer in their toolkit, no matter how fancy that hammer may be.
And this is where NetApp has struggled. It was, for a long time, very good at doing one particular thing: file storage. It was less great at block storage, but still pretty good as this wasn’t too far away from the main business that it was very good at. NetApp was a storage company, and it has found it difficult to be stay as just a storage company in a cloud world.
NetApp is in a tricky position, as all successful incumbents are: it needs to keep its existing customers happy while enticing new customers who want something different. If it changes too fast, it risks alienating the people who keep the lights on, but if it changes too slowly, there will be no new customers to take over when the old ones die.
The previous attempts at keeping ONTAP relevant (such as the Data Fabric idea from around 2014) haven’t really worked out. NetApp has changed tack, and been on a buying spree, snapping up a variety of acquisitions such as SolidFire, Greenqloud, Stackpoint, Cognigo, Spot, Talon, and CloudCheckr. This has created a proliferation of services, many of which are quite different to NetApp’s traditional storage focus.
For now, NetApp appears to be trying to appeal to everyone all at once but without a coherent story for how all the pieces fit together into a whole. The idea of “ONTAP Everywhere” doesn’t really work when many of the pieces simply aren’t ONTAP, particularly for newer developers who have never heard of ONTAP and for whom it has no brand appeal.
The individual pieces can be quite enticing: the storage arrays are fine. Spot looks excellent. Amazon FSx for ONTAP is cool. NetApp boasts that it has “a variety of offerings to serve every use-case” but this variety is part of the problem. It’s hard to navigate the portfolio. It’s hard to see how each piece fits into the larger puzzle.
NetApp marketing seems unsure if it wants to be a house of brands or a branded house, and until it makes a decision it can’t commit to one story and so tries to tell all of them all at once. That makes it very challenging for everyone out in the field (or at Cloud Field Day) to tell the story because they have to try to tell seventeen of them simultaneously.
My impression is that this is a bunch of tenuously related products thrown at customers to see which, if any, will stick. There’s nothing inherently wrong with this stochastic innovation approach (it’s what the whole idea of VC-funded startups are based on, after all) but if you’re going to take a portfolio approach then I’d like to know why each component is there.
I may well want to solve the problem NetApp says it has a solution for, but so do lots of other vendors. I still need to answer one fundamental question: why NetApp?