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No. of Recommendations: 17
They really haven't done anything new they have just done it better than most.

I strongly disagree with this statement. What NTAP did that nobody else did was to recognize that higher bandwidth within local area networks was going to allow storage appliances to be connected directly to the network, as opposed to a separate, complex and costly SAN, and to develop hardware and software to develop a market that nobody else was really promoting. Since most of the big enterprise storage networks were very committed to SAN, NTAP attacked by promoting their product in the internet space, populated with companies with lean IT staffs and IT budgets that placed great value on low cost (initial and ongoing) and simple deployment. Other major storage companies like EMC and IBM dismissed NAS as a niche, inefficient category, and the NAS concept would have never been deployed broadly if NTAP had not come along with the vision and the focus to implement the solution. They have entrenched themselves in the internet space, and as the hardware and software progressed toward increased scalability, NTAP are making great inroads in enterprise storage systems and will continue to do so.

NTAP's product is not just the storage appliance. It is a system that includes software to make it easy to implement and operate, as you admit, and this "package" IS a discontinuous innovation in storage markets, which heretofore consisted of proprietary, complex and costly solutions.

NTAP's greatest "barriers to entry" are: (1) they have become THE company to go to for quick efficient deployment fo storage systems for internet operations. First-mover advantage has become one of the great cliches of our time, but it does make a difference when introducing a disruptive innovation from below, and (2) the large storage companies, in order to advance their NAS operations, will have to do so at the expense of their highly proprietary, complex, and expensive storage solutions. It is very difficult for these large incumbents to make the decision to cannibalize their existing business in order to attack NTAP in its own turf.

If EMC and others are going to attack NTAP, it's going to have to be within their established customer base where they enjoy the benefit of a relationship; an internet company not currently doing business with EMC is unlikely to go with EMC when NTAP has become THE place to go for NAS solutions. And attacking within their customer base means cannibalizing other business.

If the established players wanted to attack NTAP, you are probably right that the barriers to entry are not insurmountable from a technology point of view. But I just don't see EMC promoting cheap NAS solutions at the expense of their high-margin, expensive storage solutions. They are not really gaining ground on NTAP.

If your argument is that NTAP is not currently a pure gorilla, I probably agree. In fact, I'm not sure that they will ever satisfy all the traditional metrics of such a creature. But to say that they have done nothing new is stretching it, a lot. Don't think that the only value in the business world is creating proprietary enabling technology and becoming a full-fledged gorilla.

--fox


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