Storage is perhaps the most complex as also the most dynamic component of the IT infrastructure of any growing organization today. Without doubt, storage has come to signify much more than the literal sense of the term. CIOs can't have a good night's sleep just by storing and backing up data safely somewhere. They must also ensure that the data is always managed in a way that makes it is available all the time without any disruption to whoever its users are, whether inside or outside the organization. What makes the job of a CIO tough is the pace of growth of data. In every growing business organization, data is growing at a hitherto unimaginable pace and is also acquiring new dimensions. In this backdrop, organizations face the challenging task of planning and deploying a storage system that takes care of current requirements, simplifies management, and provides them with the capability to scale up at will and also continuously achieve cost-effectiveness. More than all this, they need a storage system that not just integrates well with their core business strategy but also keeps pace with changes in the business. Unfortunately, not many storage systems can ensure this.

California-based storage solutions company Network Appliance appears to realise all this well and that is the reason why it is working on to eliminate some of the key problems-low capacity utilization, lack of transparency, slow processing time-that most storage systems face today. Building unified storage solutions and eliminating islands of storage, which make manageability difficult, is also one of the key goals of the company.

The Growth Strategy
Addressing an analyst conference in New York last December, CEO Dan Warmenhoven emphasized that the company's growth strategy is built around anticipating customer needs, innovation, partnership with industry leaders, world-class support services and investments in people, processes and systems. Warmenhoven stressed that these would be the key to Network Appliances growth. "We aspire to be the fastest growing company in storage,'' Warmenhoven said.

Among other things that Warmenhoven emphasized was the Network Appliance's strategy of providing unified infrastructure for storage that would facilitate better economies of scale. This is what customers are looking for, he said and added that unification will fuel growth. Warmenhoven also said that virtualization would be another key component of Network Appliance's strategy. "The goal of virtualization at Network Appliance is to solve multiple problems with the same storage infrastructure and drive utilization up and management costs down," Warmenhoven emphasized.

Betting on Data ONTAP 7G
Network Appliance's latest version of enterprise storage software - Data ONTAP 7G is a manifestation of what Warmenhoven said. Data ONTAP 7G provides a dynamic virtualization engine, capable of aggregating physical storage components into intelligent, self-optimizing capacity pools, while enabling data management functions to be tailored to individual application datasets.

According to the company, customers using Data ONTAP 7G and its advanced virtualization capabilities can double their storage utilization, dramatically increase I/O performance for enterprise-class applications, and significantly reduce storage management costs for multi-application environments. "Data ONTAP 7G simplifies data management, and delivers what our customers are asking for a flexible storage infrastructure that offers high performance, massive and rapid scalability, and minimal management overhead-all to achieve maximum value from enterprise data," said Paul Albright, senior vice president of marketing at Network Appliance. "It is also the first storage software to provide dynamic virtualization, a real breakthrough and industry achievement in not only virtualization but also in laying the groundwork for the world's most powerful Storage Grid architecture," Albright claimed.

Winning the Numbers Game
That the company's strategy is paying off is clearly reflected in its growing market share. According to IDC's Worldwide Quarterly Disk Storage Systems Tracker, year over year Network Appliance grew revenue in the FC SAN market 95 percent, versus the market growth of 16.3 percent. The company also grew revenue in open systems networked storage or FAS market with 24.6 percent y-o-y growth, versus overall market growth of 17.5 percent and 2.9 percent sequential growth, versus an overall market decline of 1.2 percent. IDC said Network Appliance maintained a strong lead in the iSCSI SAN storage market for the third quarter of 2004 (3Q04). In its core NAS market, the company demonstrated continued leadership in NAS hardware for 3Q04 in both revenue and terabytes shipped. Also according to IDC, the company posted a 36.3 percent revenue market share, with a 13.8 percent increase in revenue y-o-y (vs. the third quarter of calendar 2003). "Customers are increasingly turning to Network Appliance to solve complex data management issues for their tier one, data center, and mission-critical applications. IDC's market figures confirm that trend," said Suresh Vasudevan, senior vice president, product management, Network Appliance. The company claims that the market share figures demonstrate that customers continue to demand simple, scalable, and affordable technology for their networked storage requirements.

Source: Network Appliance

Analyst firm Piper Jaffray recently said, "The company's unmatched organic revenue and earnings growth profile, continued market share gains, strong alignment with almost every positive industry trend (iSCSI, storage software and services growth, virtualization, small and medium business opportunities) and probably the most elegant product design (common file system, operating system, and architecture across all of its products) in the markets that it serves."

The company, which entered Indian in 2000, has gained a strong position in the Indian external storage market. 2004 was a good year for the company. It gained several large customers including Aviva, GE Capital, HDFC Standard Life, and Sasken Communications. The company attributes this growth to strong partnerships.

Network Appliance is looking forward to a 36 percent increase in revenues to $1.6 billion. Dan Warmenhoven, CEO believes a revenue goal of $7 billion in FY 2007 is possible. Given the way the company is currently growing and its strong positioning in all the fast growing storage segments, Warmenhoven's optimism isn't unreasonable.

Ravi Shekhar Pandey in New York