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Flash cheaper than disk? 'Customers aren't buying that', says NetApp CEO

Tom Georgens puts the boot into NAND hype

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NetApp's CEO Tom Georgens philosophised about flash storage in the company's latest earnings call with analysts. The top boss said non-volatile NAND memory isn't the be-all and end-all in storage: what matters is where active and inactive, hot and cold, data is stored, and how dear each of those holding pens are.

“Flash, on a capacity basis, is more expensive than disk,” said Georgens. “From an I/O per second [perspective], it's actually a lot less expensive than disk. The task at hand … is how do you get the random I/O workload on flash and how do you get everything else on raw drives?”

“The data placement component of this matters a lot,” he continued. “You can't afford to have idle data on flash.”

Georgens doesn't believe that flash storage is more cost-effective than disk storage in the long term – and he thinks NetApp's customers don't believe that, either.

“I think the argument that flash is cheaper on the total cost of ownership basis than disk, particularly SATA disk, that argument doesn't wash. I don't see customers buying that. I don't see the trend favourable in that dimension either.”

He also talked up NetApp's ONTAP storage operating system:

“Managing the data placement across a multimedia storage hierarchy, some flash, some disk, some tape or some cloud... that problem has to get solved and that is just as important. That's really where ONTAP gives us a key long-term advantage.”

“In addition to the FlashRay technology,” continued Georgens, “being able to integrate that into a unified enterprise-wide data management framework like ONTAP, I think it's a really, really key advantage for us in the long run.”

He concluded:

I see flash as part of a data storage hierarchy. And the data placement, how the data resides on the most cost-effective, performance optimised component at any point in time, that is ultimately going to be the intellectual property that's going to drive this to be a mainstream technology.

As for the earnings in NetApp's first fiscal 2014 quarter results; they were seasonably down on the final 2013 quarter.

Revenues were $1.52bn, a nicely steady 5 per cent year-on-year increase but 12 per cent less than the previous quarter. Profits were $82m, 28 per cent higher than a year ago. They would have been higher still but for a $48m restructuring charge.

NetApp's outlook for the next quarter is for revenues to be between $1.56bn and $1.66bn. This was less than Wall Street generally was hoping for. ®

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