NetApp's new CEO talks about hybrid cloud, customer challenges

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Speaking of the software, why are existing customers not moving to the next version of the clustered Data ONTAP as quickly they might? What's holding them back and what are you doing to accelerate that?

First of all, every technology company at some point in its life reinvents itself and reinvents its core technology for the next decade of IT. We reinvented, rearchitected and built clustered Data ONTAP for the next generation of IT. We have seen strong adoption of clustered ONTAP for new workloads as well as new customers. As I mentioned on the earnings call, we have been up triple digits year on year for 13 consecutive quarters and the numbers that we're talking about are several billions of dollars' worth of new revenue to NetApp.

That being said, the install base of 7-Mode systems needs to ultimately also convert to clustered Data ONTAP, at least a portion of it for those active workloads in the 7-Mode install base. We have work to do to enable the customers to accomplish that migration. About 15% of our install base has moved but there is more work to be done.

Let me tell you what we're doing about it. The first is providing full consulting to help customers design their blueprints for migration as well as enable them to have cost-effective migration gear and other things like that. The second is to enable our resellers with the training needed so that they can accomplish these migrations. We continue to improve the tool sets that allow people to migrate more effectively and cost-effectively.

That being said, ultimately, upgrades from our 7-Mode environments to clustered Data ONTAP will be paced as part of the customer's own IT priorities. These are IT projects that get scheduled alongside upgrades to other parts of their infrastructure. For example, many of these transitions occur during upgrades to application environments like SQL Server or Windows Server. So what we're doing is to allow our customers to be ready to migrate their storage environments at the time that they want to do so.

I've grilled you about things that have happened before you took over and some of the issues you face. Let's talk about some emerging things. Tell readers about the data fabric vision. What does it mean and how are you bringing that to life for them?

The data fabric idea is to allow customers to build hybrid cloud architectures that take advantage of the flexibility and efficiency the cloud provides while maintaining seamless control of your data. I'll give you an analogy. In the early days of the new Apple, when Steve Jobs introduced the iPod, you had songs on your iPod. Then he introduced the iPhone and you had photos on your iPhone and then he introduced the iPad and people wanted to have the songs on their iPod to be played on their iPhone and similarly, the photos that were on the iPhone to be now displayed on the iPad. Apple enabled people to do so by introducing iTunes and the App Store that made the ecosystem of Apple devices just work seamlessly together.

Now imagine the equivalent problem for enterprises with their storage and data management challenges of the hybrid cloud. Today, every cloud provider has a different way to manage your data. If you've got some on-premises environments, you've got some environments that are service providers, for example, for disaster protection, and if you've got an application development environment on a public cloud, they look much like the early days of the iPod, the iPhone and the iPad. You can't share information across them, you can’t protect your data the same way, you can't measure usage of the data across all of these environments.

What we’re doing is much like Apple did for personal computing and the personal user, stitching together all of these different cloud environments under a common storage and data management model. We bring the world's best data replication and data management technology to the problem. SnapMirror and SnapVault have been built for the hybrid cloud, being storage efficient and WAN transport efficient. We are taking the number one storage operating system, Data ONTAP, and making it available to virtualize not only our systems on premises but also competitors' systems, white boxes and public clouds.

We're excited about the path ahead. The data fabric concept is strongly resonating with our customers and we have seen strong adoption of the technology. We have a few hundred customers now building data fabrics with us, which is a strong increase from even a year ago.

We are moving from a world of monolithic applications running in private data centers -- a world in which NetApp storage appliances were very successful -- to a world of highly distributed applications made up of virtualized services that might or might not be running in a private data center. What's your formula for success in this new world?

A component of the data fabric is the same idea of seamless data management for born-in-the-cloud applications. We have made strong progress on two fronts. For example, using our E-Series platforms we have succeeded with new-age analytic applications like Hadoop and Splunk where we bring a set of performance, availability, density characteristics and cost efficiency to those environments that is historically run on direct-attached storage. You’ll see continued adoption of those use cases.

For customers building the Internet of things, where they require distributed technology in a public cloud for preprocessing data and a back office -- on premises or in a service provider data center -- for their operational environment, we are able to build a combination of capabilities using the data fabric.

Then for object-type applications, we've delivered to market a technology called StorageGRID Webscale that provides the only concept of a seamless data fabric where you can build a name space for a distributed application that combines public cloud with on-premises clouds. We're starting to see good customer wins in that area as well.

I want to talk about some specific product areas and give people some insights into what NetApp is doing in each of these areas. Let's start with flash storage. Help people understand the flash strategy at NetApp.

Our perspective is that flash is transformational. It offers businesses value in dramatically improving storage and I/O performance. There are three different use cases within our customers and we are positioning platforms for each of them.

Let me start with the performance use case. This is one where the customer wants extreme performance out of their flash storage system and most of the data management features therefore run on the host on the application tier. We have the EF-Series platforms able to do that. I was in India a couple weeks ago and we met with one of the largest public-sector banks. In India, credit is not available to the vast majority of people. The percentage of people who have bank accounts is actually fairly limited and so there are lots of prepaid debit cards and things like that that enable people who don't have bank accounts to get access to credit. One of the things that creates challenges in the Indian economy therefore is fraud and credit checking.

Prior to us working with this bank, their fraud detection and fraud monitoring systems were all non-real-time, meaning they had a system that would accept transactions from the merchants and then they had a separate analytics engine that would run analytics at the end of the day against those transactions and notify merchants about fraudulent transactions. That's complicated in a country like India where merchants' lines of credit are very small. We worked with this bank to enable a world-class, real-time fraud detection system combining high-performance transaction processing with real-time analytics. Now, rather than wait for the end of day, as soon as the [fraudulent] transaction is detected, it is automatically rejected.

The second example is where people want to build a tier of flash, for example, within a private cloud architecture. They want to build a private cloud that is a combination of virtualized computing, a range of different applications and consequently a range of different datasets. Those could include extreme performance environments, mixed workload environments and archival.

In the core of the data center we think that the right way to use flash is combining all flash configurations with hybrid flash, disk and the cloud and allowing seamless data management across all those tiers rather than have wasted flash-only silos. We would like to combine all three of them. That’s where the All Flash FAS product is targeted.

All Flash FAS has been on a very strong ramp once we introduced 8.3 and 8.3.1 versions of our software that improved the performance and efficiency of those systems. It provides what we believe is the only enterprise flash solution that combines the performance and efficiency of flash with the mature feature sets of Data ONTAP.

Finally, for new workloads that are emerging, for example, some types of analytic workloads, we are developing the next-generation flash technology called Flash Array and you’ll hear more about it as we bring that to market.

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