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Georgens bags top NetApp job

Warmenhoven steps aside after 15 years

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All change at NetApp as dominating long-term CEO Dan Warmenhoven steps aside and hands the CEO spot to his well-groomed successor, Tom Georgens.

Dan Warmenhoven became NetApp CEO in 1994. As NetApp co-founder Dave Hitz tells it on his blog: "When he joined NetApp in 1994, we had forty-five employees and less than $10m a year in revenue. Fifteen years later, we have eight-thousand employees and $3.4bn in revenue. "

That could have been more, but we'll get to that in a minute.

NetApp recruited Tom Georgens after LSI, where he ran the Engenio storage operation, cancelled the plan to hive it off as an independent business with Georgens as CEO. With Engenio sucked back into LSI, Georgens looked for alternative work and joined NetApp in 2005 to run product operations. He was promoted to president and chief operating officer in January 2008, at which point Dan Warmenhoven took on the board chairmanship.

This was a sign that Georgens was being groomed for the top spot, and 18 months or so later he got it; a CEO at last. Ironically he also got Dan Warmenhoven reporting to him, as Warmenhoven has picked up a new job looking after relationships with NetApp's major partners. We wouldn't describe Warmenhoven as an executive chairman though, because the executive role is narrowly defined.

Why is Warmenhoven looking after such relationships and not Georgens? Who are the major partners? Cisco must surely be one, but Brocade or QLogic? Looking after them would be a senior sales job, surely.

Dan Warmenhoven has imposed his stamp and his personality on NetApp. The company has won a reputation as a great place to work, winning a Fortune Magazine award as the #1 Best Company To Work For. He has great presence and a fair amount of charisma, and won the respect and loyalty of two of NetApp's founders, Dave Hitz and James Lau, who reported to him. Warmenhoven came in to NetApp originally because a third founder, Michael Malcolm, was not making a good job of being CEO and needed replacing. That was not a happy time.

Now Warmenhoven is enormously wealthy, being able to afford a private jet. He can look forward to using it to fly to golf courses and other destinations, as Hitz hints he will retire from NetApp next year.

Clearly Warmenhoven has done good for NetApp - $3.4bn revenues is not to be sneezed at - but he could have done more. The acquisition history at NetApp is not that good. Intent on keeping NetApp a pure storage play Warmenhoven confined its horizons and prevented it going the EMC route of expanding into allied fields by acquisition.

The Spinnaker buy resulted in a tortuous five-year effort to assimilate Spinnaker's clustering technology and integrate it into NetApp's own Data ONTAP operating system. Only now, with ONTAP 8 expected later this year will the separate clusterable GX ONTAP variant be integrated into the mainstream ONTAP 7G.

The Topio buy brought any-to-any replication to NetApp. The technology was effectively dropped because NetApp misread the market - not enough customers wanted it.

The Decru security appliance buy has been a so-so success. The Alacritus acquisition in 2005 got NetApp a Virtual Tape Library (VTL) product separate from its ONTAP boxes. It subsequently added de-duplication to this. However, the attempt to buy Data Domain earlier this year indicated the market limitations of NetApp's de-duping VTL.

Another smudge, if not actual black mark, on Warmenhovens's record is StoreVault. This was a separate low-end NetApp storage product for the channel. Leonard Iventosch ran the channel business for NetApp and did great things. But mainstream NetApp people didn't like StoreVault, seeing it cannibalising low-end sales from NetApp's FAS products. In the event StoreVault was canned by being assimilated into NetApp's mainstream products. Today Iventosch runs world-wide channels at NetApp competitor Isilon.

Warmenhoven took NetApp in hand and rode the filer wave. The company added iSCSI and Fibre Channel block access to what is now a unified storage product. A measure of his success is NetApp's size and lack of similarly-sized competitors; a measure of his failure is EMC's much greater size and scope.

To rub this in, EMC entered the filer market with Celerra and has a bigger market share in NAS than NetApp. If Warmenhoven had not had a strategy of trying to mainly buy companies whose technologies would fit into ONTAP, then NetApp might be a very much larger company today.

The timing of the change is good. Warmenhoven has moved the company on from the failure to buy Data Domain. A cloud storage strategy is about to emerge. The Spinnaker acquisition may finally come good. The recession appears to be bottoming out. The good ship NetApp is in reasonable if not good shape and so it's a good time to switch bosses.

But why is Warmenhoven getting this major partner relations role? A story in Gestalt IT suggests that EMC is going to bring out its own unified virtualised server and storage stack deliverable as an Atmos Cloud Compute facility competing with Amazon's EC2 and S3, and also with Cisco.

Could Warmenhoven be scenting a great prize, that of replacing EMC as Cisco's storage partner? That really would be something to make retirement worthwhile. ®

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