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After keeping a low profile for his first few years on the job, NetApp CEO George Kurian spent more time in the...
spotlight in 2017.
NetApp celebrated its 25th anniversary in 2017 -- the year it became the largest storage-only vendor following Dell's acquisition of EMC. NetApp's strategy of moving from its legacy storage products to mainly flash and clustered systems paid off, with four straight quarters of solid growth. In late 2017, NetApp belatedly entered the hyper-converged market with the NetApp HCI product built on SolidFire flash technology.
The NetApp CEO really stepped into the spotlight after the vendor found itself in the center of a mass shooting in Las Vegas on the eve of its Insight user conference. Kurian established himself as the calm amid a tragic storm, as the conference went on after a one-day delay. Attendance was reduced, and the mood was somber. Kurian called for a moment of silence to acknowledge the victims, and he closed his remarks on data mobility with a moving story about his young son's battle with eye cancer.
"That was a set of extraordinary circumstances," Kurian said. "We appreciate the support of everyone who stayed to help us through it."
Kurian took over as NetApp CEO in 2015, following the ouster of Tom Georgens. At the time, the NetApp cloud fabric was in its infancy, and it was struggling to address a rocky Clustered OnTap rollout. After misreading the flash market, NetApp also had fallen behind all-flash competitors.
Now, NetApp's all-flash FAS platform is outgrowing the market, and its cloud strategy is taking shape around its integrated Data Fabric. A 2017 partnership with Microsoft reinforced its cloud progress, as NetApp started to sell OnTap-based NFS file storage as an on-demand service via the Microsoft Azure cloud.
The NetApp CEO still faces challenges. Flash, cloud and hyper-converged are among the most hotly contested areas in storage -- and perhaps in all of IT. We recently spoke with Kurian about NetApp's plan to narrow its priorities to fast-growth areas.
"We want to avoid spreading ourselves a mile wide and risk becoming mediocre," he said.
What has been the biggest factor to reversing NetApp's revenue slump?
George Kurian: We have good momentum in all-flash arrays and [FlexPod] converged infrastructure. We introduced NetApp HCI and started shipping it in October. We've also done a lot of integration work with NetApp cloud providers to enable customers to build an infrastructure that allows them to maximize the value of their data.
There's no question that the storage market is undergoing fundamental changes. Many of the traditional players in the market are having tough times. We have succeeded because of three elements: We [have] an overweight portfolio in growth areas and are winning shares in each of those segments. We have a well-developed cloud roadmap, and we are executing against those strategic priorities.
How are your priorities different from former NetApp CEO Tom Georgens?
Kurian: When I took over, the most important priority was to spend time with customers to understand how they plan to use their data and the technology platforms and capabilities they needed us to provide. As a result of those discussions, we quickly pivoted our investment from technology hardware platforms into fast-growing areas of flash and the hybrid cloud.
Those areas generate about 70% of our net product revenue, and revenue growth is north of 20% year over year. That stabilized our business and helped us return to growth.
The essence of our strategy is to be clear about not only what is most important, but also to say 'no' to things that are no longer relevant to customers. We are more disciplined about the bets we make and more rigorous about inspecting our progress against those bets.
NetApp has a history of being late to market, notably in all-flash and hyper-convergence. How do you expect to gain ground on established contenders?
George KurianCEO, NetApp
Kurian: We don't feel badly about not being the first to market. If you watch market transitions, the first company to reach the market is not necessarily the big winner.
In the all-flash business, you had companies like Fusion-io and Violin Memory and others that were early to market for a key use case, but when the market transitioned to mainstream use cases, those companies got left behind.
With hyper-converged, we are following the same path to market we did in the all-flash array market. We think we offer a very strong value proposition to customers with NetApp HCI. So far, we feel good about our progress. We're going to have the same recipe: Stay humble, stay focused on the customer and compete like hell.
NetApp snapped up startup vendors Greenqloud and Plexistor in 2017. How will those technologies show up in NetApp storage platforms?
Kurian: You'll see Plexistor technology in FAS and SolidFire roadmaps. Plexistor has a file system for 3D XPoint memory technology, which allows customers buying our all-flash array to have an integrated ultralow-latency tier. For example, our all-flash FAS [latency] is in the range of 200 to 300 microseconds. Plexistor latency is in the range of 10 to 20 microseconds. It is an ultrafast tier that's integrated with OnTap and SolidFire [Element operating systems].
Greenqloud will be integrated into our Data Fabric architecture. It will help NetApp cloud customers manage their data seamlessly between on-premises environments and the public cloud providers. Greenqloud is the way we manage and orchestrate our NFS as a service in the Microsoft Azure hybrid cloud.
How is NetApp flash supporting nonvolatile memory express flash (NVMe)?
Kurian: NVMe is integrated into our platforms to support lower-latency caching. We've integrated NVMe over Fabric to make customers be able to deploy NVMe over a proven operational model. For example, we announced NVMe over InfiniBand being available as part of our EF570 product that was then shipping ... and we have investments in NVMe over Fibre Channel coming in our all-flash FAS.
Is NetApp looking to make additional acquisitions?
Kurian: We are a pretty disciplined acquirer. We are, however, constantly on the lookout for new ideas. Our broad perspective is to help our customers manage their data for a strategic advantage in a hybrid cloud-hybrid IT architecture. We've certainly had a good start in delivering things we promised to the market, but we keep our eyes open for things that add value to help customers manage their data more effectively. We are not a company that buys overlapping assets. You won't see us buy another technology to compete with the portfolio we already have in the market.
What storage trends do you see emerging in 2018?
Kurian: The NetApp cloud discussions that we are having with customers are getting more real. You probably will see [NetApp's] early investigations into the use of artificial intelligence and machine learning to help customers simplify their infrastructures. We're making some investments in those areas. Our systems know a lot about what's going on automatically. Combining some of that intelligence with machine learning is an area of promise that could help our customers. We'll share more as those plans become more real.