Feeds

NetApp says no one wants to buy NetApp

Warmenhoven on who could, but won't

The essential guide to IT transformation

No-one really wants to buy NetApp. There are five possibles but none of them has a problem that buying NetApp would solve better than any alternative. Really. That's NetApp CEO Dan Warmenhoven's view.

He listed the five possible suitors in a question and answer session at NetApp's Sunnyvale HQ this morning. In reverse order, beginning with the least likely candidate first, he named EMC, NetApp's foremost competitor, to gasps from the gathered employees and customers. He said EMC would love to consolidate the storage industry but anti-trust concerns would pose an insuperable obstacle with every EMC competitor making anti-trust complaints. Exit EMC.

Next up was Dell. He said Dell was struggling right now and it doesn't have the market capitalisation and market fire power needed. It's doing well with its EqualLogic acquisition. It's committed to that. And anyway, its problems are bigger than its storage product line. Drop Dell.

Then Warmenhoven named IBM as a more likely acquirer. But IBM already has pretty full access to NetApp products and technology through its OEM and reselling deal. It's also got too many storage product lines already. Ignore IBM.

Fourth on the list was HP. Mark Hurd has said he's pretty happy overall with HP's storage products and any development would probably be organic, so HP gets the heave-ho.

Which leaves...Cisco. It needs a storage product line to fill out its unified computing system but a likelier buy is EMC, because Cisco would get a broader set of businesses and a jewel in EMC's crown that it also needs for servers: VMWare. Count Cisco out.

Warmenhoven said: "I like being independent." And he and vice chairman Tom Mendoza both said NetApp would would be similarly bold and decisive in the future as it has been over the Data Domain acquisition. The signals are that NetApp wants to grow from a$3bn corporation to a $5bn one, and then on to a $10bn one. The way it's decided to do that is to buy complementary businesses to NetApp and win two ways.

The first way is by selling the bought company's products to NetApp's customers, getting a larger share of their spend. The second is by selling NetApp's products to the acquired company's customers. With the bulk of the top 5000 global storage buying customer accounts not yet NetApp customers, there is plenty of market headroom for growth.

What about EMC? Warmenhoven said EMC was vulnerable. It's main strength is its incumbency in accounts and that's not sustainable. Watch out Joe Tucci, Dan and Frank (Slootman) are starting out on a crusade to eat your lunch. ®

Boost IT visibility and business value

More from The Register

next story
Pay to play: The hidden cost of software defined everything
Enter credit card details if you want that system you bought to actually be useful
Shoot-em-up: Sony Online Entertainment hit by 'large scale DDoS attack'
Games disrupted as firm struggles to control network
HP busts out new ProLiant Gen9 servers
Think those are cool? Wait till you get a load of our racks
Silicon Valley jolted by magnitude 6.1 quake – its biggest in 25 years
Did the earth move for you at VMworld – oh, OK. It just did. A lot
VMware's high-wire balancing act: EVO might drag us ALL down
Get it right, EMC, or there'll be STORAGE CIVIL WAR. Mark my words
Forrester says it's time to give up on physical storage arrays
The physical/virtual storage tipping point may just have arrived
prev story

Whitepapers

Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up distributed data
Eliminating the redundant use of bandwidth and storage capacity and application consolidation in the modern data center.
The essential guide to IT transformation
ServiceNow discusses three IT transformations that can help CIOs automate IT services to transform IT and the enterprise
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.