Innovation distinguishes between a leader and a follower


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The title of this blog post is a quote from the late Steve Jobs. In highly competitive and mature markets, this quote is very a propos. In the enterprise infrastructure market, I am often asked about the long term rivalry between EMC and NetApp.

On February 13, 2013, NetApp very quietly acquired ionGrid, a small privately held company that brings enterprise Dropbox-like capabilities to the iPad specifically. When I thought about this acquisition, I immediately thought of EMC’s “EMC Enterprise Online File Sharing Service from Syncplicity with On-Premise Storage Options”. The product was made available through an announcement on January 15, 2013, almost a month to the day earlier than NetApp’s acquisition of ionGrid.

For companies like NetApp, being seen to be reactionary can be a bad thing. It conjures up perceptions of a lack of innovation, a level of desperation to be seen to be on equal ground with its rival (cementing the perceptions of being second best). In fact, this is not

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the first time that NetApp has trailed EMC on either announcing or delivery technology. Here are some examples:

  • Neuralytix research shows that NetApp was the clear front-runner in terms of delivering compression capabilities to enterprise storage systems, but it held off its announcement until October 1, 2010, over a month after EMC announced its intent to deliver compression to the VNX platform;
  • With respects to scale-out NAS, NetApp was seven to eight years late (depending on how one counts the dates) with delivering scale-out capabilities to its platform. In the meantime, EMC acquried Isilon two years before NetApp made general availability of DataONTAP 8 with cluster mode; allowing EMC to build its Isilon unit into a division that delivered $1B run rate in revenue;
  • NetApp passed over Rainfinity 2002-2003; instead Rainfinity was ultimately acquired by EMC in 2005;
  • IN 2005, NetApp announced it’s OEM agreement with Kazeon, but Kazeon was also ultimately acquired by EMC in 2009; and
  • More recently, NetApp’s quiet acquisition of CacheIQ in November 2012 was undoubtedly in reaction to EMC’s acquisition of XtremIO six months earlier.

NetApp is an outright technology leader. Its DataONTAP operating system should be lauded and applauded; yet it is often put down by its competitors as being archaic and without recent innovation. The challenge I see with NetApp, is that it has consistently been let down due to its incapacity to evangelize its achievements, and most importantly its technology leadership.

It has over-invested in ideas such as the FlexPod reference architecture, which ultimately is not an integrated solution (such as those offered by Dell, EMC, HP, IBM and Oracle). Instead, it is a highly-tested set of recommendations for customers to acquire technology from three disparate companies – NetApp, Cisco and VMware, and three separate service contracts from each respective vendor.

NetApp’s focus on FlexPod is an attempt to demonstrate that it has a more powerful grip over Cisco and VMware than EMC. The former, having a joint-venture partner of EMC, in VCE Corporation, that has reached (or very close to reaching) a $1B run rate in revenue; and the latter, a company in which EMC has a significant majority ownership.

I believe that NetApp needs to invest in demonstrating to the industry how it has taken its market share from low single digits to the teens, not by being an also-ran, or a “me too” company. Instead it should demonstrate that the maturation of the company and the successes it has achieved is a result of being a technology leader and a visionary company.

NetApp, show that your innovation is truly leading the market to new heights, not following others to get there.

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