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Sun 2 Aug 2009 04:00 AM

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Applications to the next level

NetApp recently recorded revenue of US$880m for Q4 of its 2009 fiscal year, down from US$938m on the same period last year. Regional boss, Martin Molnar, explains why this region has been bucking the trend.

Applications to the next level
We’ve got some interesting technology around thin provisioning and deduplication and we are bringing 100% SLA with SANscreen. - Martin Molnar, regional director, NetApp.

NetApp recently recorded revenue of US$880m for Q4 of its 2009 fiscal year, down from US$938m on the same period last year. Regional boss, Martin Molnar, explains why this region has been bucking the trend.

"I think we have seen a slowdown in some areas of enterprise," explained Martin Molnar, regional director of IT applications vendor NetApp, in an honest assessment of how the regional networking market has reacted to the downturn.

He says that in the enterprise and mid-sized market spending has not completely dried-up, but is being drawn out over longer periods. "We are seeing buying cycles move from three months to six months, people tend to be pushing them into new fiscal years and new budgets," he added.

Despite this candid assessment of how enterprises are approaching IT investments, Molnar is adamant that the Middle East is a strong and prominent market for the vendor and indeed one that is performing very well within its own corporate setting as mature markets across the world feel the downturn's brunt.

"Overall I can say here we are outstripping corporate growth and market growth considerably and whilst I can't give stats, not only the market, but in terms of growing faster than the market, if I compare our storage attach rates to that in the rest of our organisation, we are growing significantly," asserted Molnar.

Although it is uncertain as to how much growth this equates to and what sort of market share that NetApp currently commands in the Middle East, Molnar points out that there are a few solid areas where the firm's portfolio remains an important point of investment for CIOs in this region.

"The software initiative for us is key; the ability to drive more with less, it is fairly unique and we have got some interesting technology around thin provisioning and deduplication and obviously we are bringing 100% SLA with SANscreen. These are our flagship software technologies which I see a very strong uptake on," said Molnar.

Also the firm is looking to innovations in the field that will drive the market and hopefully provide comprehensive ROIs that will mean CIOs will have to free up investment capital. Storage is a very important category for the vendor and one which it is looking to capitalise on as developments in solid state take hold and NetApp starts to integrate that into its enterprise-facing portfolio.

Also, as already mentioned, Molnar is looking to make some serious traction in the market with the SANscreen solution, which improves the management and efficiency of storage infrastructure and assists with aspects of storage such as migration, capacity planning and availability improvements. At the moment however, Molnar could not name any end-users that have carried out full SANscreen implementations, but to ensure this happens certainly seems to be an important priority for Molnar over the rest of this year and into the next.

"We have got a number of customers that are involved in pilots in the Middle East at the moment. Also most of the customers that we have got around SANscreen are Fortune 50 organisations and are actually running SANscreen, for instance a lot of telcos are running it," said Molnar.

"So it is already industry hardened, this is something that we want to take to market in the Middle East and we want to make sure that we come out to regions such as the Middle East and such as Africa where this already has a test-bed with some of the top firms."

Similar to most vendors operating in the Middle East enterprise sphere, virtualisation is something that Molnar is keen to support as an important market trend and one that he sees may be investigated to a greater extent during the difficult times.

"Virtualisation is a very strong lead for us in terms of the discussion, the efficiency play for us once we start talking to clients, they have the ability to design the infrastructure north of 100% and in terms of utilisation that is a very strong leader for discussion with the client and I think they are always looking at how they can optimise," continued Molnar.

He also concedes however, that although discussion around virtualisation has been rife in the region over the past few years, adoption is not yet at the level it could be.

"We have got a number of clients on the virtualisation front in the Middle East, but it tends to follow probably a year on from what we have seen in the mature markets such as the UK," explained Molnar.

"But across the Middle East and Africa some of our more mature clients have worked on everything from the ground up, on consolidating their infrastructure, we have had some substantial projects where we have worked on consolidation and now we are working through virtualisation to drive efficiency."

At the start of last month NetApp pulled out of a bidding war with market rival EMC to purchase Data Domain, after more than a month of fighting for the deduplication and back-up vendor. The company's head office said prior to the result that if it had come out victorious it would have promoted Data Domain as a product line as opposed to a separate company all together.

Owning Data Domain would have meant NetApp would have been able to beef-up its deduplication credentials and offer back-up that centres around the disk and that works in conjunction with primary storage. Although it did not go through in NetApp's favour - NetApp was awarded a cool US$57m termination fee from Data Domain - the fierce nature with which the two firms sparred for control of Data Domain, mirrors the rivalry the two companies have in the market. The fact that NetApp was making a beeline for Data Domain also indicates the importance solutions like deduplication hold to it and the prominent position that storage occupies in its portfolio.

So what is NetApp doing in the Middle East to challenge EMC's dominance? Molnar feels that efficiency and increasing the utilisation of customer's infrastructure are NetApp's significant advantages over the competition.

"It comes back to efficiency, the ability to sit down with the client and talk about how we can run infrastructure at a higher utilisation and get more out and actually build on the SLA; efficiency and virtualisation are big investments for us," emphasised Molnar.

"There are some serious capital advantages that we can bring to the table through deduplication, through thin provisioning and through the ability to manage data a lot more efficiently. It is not just about bringing cheaper products to the market it is about bringing a different strategy to the client, so that they can offset major capital purchases, so that they can sweat assets - that is the first thing," he added.

As a vendor in the high-end IT market NetApp has had to take a long hard look at how it has positioned its solutions to ensure it answers the needs of the modern CIO and most importantly conforms to their delicate budgetary concerns.

"We are working in areas that we can convert CAPEX to OPEX and trying to be more fiscally responsible with how we approach clients from a technology perspective," promised Molnar.

But having said this he is keen to point out that, although budgets are tight, dropping the price and competing for contracts solely on price points is not a tactic that NetApp is giving much consideration to.

"It is not about selling them cheap stuff," he said. "It is about understanding where the pain is from a financial perspective, and working with them on a technology solution."

Over the rest of the year the Middle East arm of NetApp harbours plans to expand the business into new countries and Molnar is confident enough to claim that this will be accompanied by an incremental increase in head count.

"We have got some strong growth objectives that we have to achieve, so we will be expanding into some new geographies across Africa and the Middle East, we see a lot of potential," said Molnar. "We are increasing head count by about 25%, and still going into some areas that we feel we can add some development to."

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