NetApp adapting storage and software business unit to Cloud First requirements

All-flash led NetApp’s climb back from the brink to profitability, and all-flash remains one of NetApp’s strategic priorities this year. However, while Joel Reich’s business unit delivers most NetApp revenue, its development priorities have transitioned to the new Cloud First approach

Joel Reich, Executive Vice President of Product Operations at NetApp

SCOTTSDALE – NetApp has been emphasizing the new at their Channel Connect Conference [C3] here this week. The big theme for partners has been the need to lead with the cloud. A second theme has been the need to take NetApp’s new HCI offering to market strongly. But while the fruits of NetApp’s other two business units have been specially singled out for love, the storage systems and software business unit still pulls in the large majority of NetApp revenues. Moreover, their ONTAP software continues to innovate, and their all-flash business, which CEO George Kurian made the initial focus of his strategy to turn around the company, continues to do well. The need to continue to drive the all-flash business was the third of NetApp’s three call to arms for their channel at the C3 event. It was, however, the third of the three. Joel Reich, NetApp’s EVP of Product Operations, who also runs the storage and software business unit, and who has been with NetApp for most of the century [2002 actually] took the stage after the heads of the Cloud and Cloud Infrastructure Business Units, neither of whose unit existed scant more than two years ago. That’s cool with Reich, however.

“This has all been about transformation,” Reich said. “It’s about survival. We transformed the company, and repositioned ourselves as The Data Authority, telling a distinct story. Now we are leading with the cloud, and simplifying and automating with Cloud Connect and flash and Cloud Data Services.”

This transition was necessary to remain relevant, Reich said.

“We are being very emphatic in our messaging here,” Reich said. “It’s change or be transformed. One of our messages today to partners is that the writing is on the wall. It’s up to their ability to read it – and to make money off it.  Our competitors are cloud deniers. They say they have hybrid strategies, but what that really means is they don’t want customers to move to the cloud. They want them to keep buying their stuff. If you say your definition is hybrid cloud, that’s dragging your feet. You are not getting to a strategic destination. That’s why if you talk hybrid cloud to a cloud architect, they write you off as a trusted advisor.”

Reich also stated that cloud allows digital transformation to create new opportunities and new buyers –  not to fight over the same old opportunities. He showed the audience a slide of a large lion lurking inside the entrance to his cave, and said that trying to take out competitors on their turf, in conventional data centres where they know every inch of their turf just as the lion knows every inch of his cave, just works to their advantage.

“Don’t fight the lion in his den!” he stressed. “Lead with our strengths. Lead with the cloud.”

A key part of the transition is the shift away from just talking to the CIOs responsible for legacy infrastructure.

“The most important thing on the go-to-market is how successful we are in finding and selling to new buyers,” Reich said. “You have to start the dialogue with the customer at the right level. Don’ just keep going to the same place and asking for the same old thing. There are now new opportunities and new buyers.”

Reich emphasized that the focus on cloud doesn’t mean that his business unit folds up their tent, and he highlighted their major announcements last month.

“We announced several firsts,” he said. “With our new AFF 800 array, we announced the first NVMe end-to-end all flash to actually ship, the first all-flash with 100GbE, and the first all flash to support 30 TB SSDs. We also aren’t done with our flash road map. We have a lot of things coming beyond end-to-end NVMe.” One of these, which they have already pre-announced, comes from their acquisition of Plexistor a year ago.

“It will allow us to add a high-speed low-latency host-based flash to our NVMe fabric,” he said.

Reich also emphasized that the cloud business has very real synergies for the on-prem business unit.

“There’s a technical reason and a business reason for this,” he said. “The technical reason is what we do in the cloud is mainly ONTAP. The orchestration and some other stuff is not, but all the other functionality is, so we get a ton of leverage. The ONTAP commonality is one aspect, but tools from one environment also connect to the other. SnapMirror, for instance, is used to move data from cloud to on prem and to an HCI system. So what we do on-prem has applicability in the cloud and vice versa. There is more NVMe in the hyperscalers than there is in enterprises. I can deploy that in volume on-cloud before on-prem, so we get a ton of development leverage.”

As a result, NetApp has a cloud-first mentality throughout Reich’s business unit.

“When my developers and product managers come up with ideas for ONTAP, the expectations will be ‘how do we make this useful in the cloud.’ Cloud-first is the internal guidepost for my development teams. I’m cloud-biased because I know that’s how we differentiate.”

The business reason, Reich said, is much simpler.

“I don’t care if the customer buys on-prem or off-prem as long as we make money, so there isn’t any strategic dissonance,” he said. “It doesn’t matter whether we are 50-50 on-prem to cloud, or 90-10 or 30-70.

So what should partners be doing this year in Reich’s bailiwick? Continue to migrate customers to flash to enable new SAN and machine learning workloads. Deliver diverse solutions to expand deal size. Show customers legitimate hybrid cloud options, with Cloud Connected Flash, which emphasize NetApp’s strengths in the cloud and allows them to modernize their architecture.

“Our focus for this year is becoming number one in flash and number two in SAN,” Reich said.