NetApp - Dave's Blog

Scattered Clouds

I outsourced this week's blog entry. I've been a bad blogger lately, because I'm finishing the manuscript of a book about NetApp -- a sort of biography of the company from childhood to adulthood -- and the last thing I feel like doing after a long day of writing is ... more writing. A typical blog is five hundred words, and a typical business book is maybe forty or fifty thousand, so at a blog a week, that’s about two years worth. (No wonder my fingers are sore.)

Fortunately, a whole team of NetApp people recently started blogging (see here), so help is on the way if you are missing your weekly NetApp fix.

Our Chief Marketing Officer, Jay Kidd, is the most recent addition to our blogging team, and his blog this week is about cloud computing. What does it mean, and why does it remind Jay of an alien abduction? To find out, follow this link...

Server Virtualization Trend: Just Starting or Almost Done?

Something has been bugging me about the market share numbers for server virtualization. Is the trend is just getting started, or is it almost finished? The numbers I’ve seen say that under 10% of all X86 servers have been virtualized – maybe 7-8%. By that measure, the trend of converting physical servers into virtual ones seems to be quite early.

Things look very different when I look at the percentage of total servers (physical plus virtual) that are virtual. Most customers seem to run at least 8-12 virtual servers per physical, and some are pushing past 30 towards 50. Let’s use 10 as a conservative number, and do the math: For every 100 physical servers, 7 are virtualized, for a total of 70 virtual servers. That makes a total of 163 total servers (70 + 93), and almost half are virtual. If we are half-way converted, then the virtualization trend must be very far along, because the second half will probably convert much faster than the first half.

It sure seems to me that looking at total servers is the right thing to do, as opposed to just counting how many physical servers are virtualized, because to a user, it shouldn’t make any difference whether their server is virtual of physical. (That’s the whole point!)

On the other hand, it doesn’t feel right that server virtualization is so far along. Most customers I talk with are just getting started. Only a few have seriously converted. My math must be busted, because there’s no way that we are half-way converted.

I think the problem is that the math assumes that there is a fixed-size pool of servers that people are converting from physical to virtual. It seems more likely that cheap and easy-to-provision virtual servers will lead to a massive increase in the total number of servers. That is always what has happened when a computing resource gets much less expensive. We didn’t just replace workstations with PCs, we gave PCs to everyone, instead of just development engineers. Likewise, the cost per gigabyte keeps dropping every year, but instead of buying fewer gigs, people keep storing more and more, and their budgets stay roughly flat.

Given the history of the computer industry, it seems unlikely that server virtualization will drive costs down in the way people think. Instead, it seems much more likely that costs will stay roughly flat, but there will be a radical proliferation in the number of virtual servers. They are just so fast, easy and cheap to deploy, it seems likely that most IT shops will hand out scads of them.

I’m not sure whether to think of this as a prediction, or a warning. I guess if you get value from all those virtual servers (just like we did from mini-computers, workstations, and then PCs), then there’s no problem. But if IT shops really want to use server virtualization to save money, then they had better be extraordinarily disciplined.

Design Requirements for NetApp’s New Logo

I love our old logo, and I’m going to miss it. NetApp has been an important part of my life, and I’ve built up many positive associations with that logo over the years. Part of what’s fun is the way some lines are missing; for many people, it takes a while before it “pops” as a 3D image – almost like an optical illusion.

So I’m sympathetic to people who wish we’d kept the old logo. I’ve been asked: Do you like that new logo? What was wrong with the old one? What does the new logo mean?

I’ll answer these questions, but to me they miss the most important point, which is: How do you design a logo that helps drive higher awareness? It’s okay to ask whether you like something, but when you consider a designed object, you should also ask whether it meets the design requirements. Here were ours:

1. visually distinctive
2. memorable and easy to get
3. foundation of a visual system (not just a stand-alone symbol)
4. can absorb meaning and feeling over time

The first two requirements are subtly different. Our previous logo was visually distinctive; I’ve never seen another one like it. But it was hard to remember or describe. Also, the 3D-optical-illusion thing was a problem, since some people never did get it. One person asked, “Why is your logo an arrow pointing down to the left?” Another asked, “Why do you have a forward C and a backward C next to each other?” Perhaps technical talent correlates with 3D visualization skills, because it was mostly non-technical people who saw a confusing 2D image, but that was a problem for our goal of driving awareness in business people.

Visually distinctive does not mean “unique in all the world”; it just means unique within the tech industry. So it’s not a problem that there is a Dutch automotive supply company with a similar logo. Apple Records and Apple Computer had similar names and logos for decades without trouble, until Apple got into the music business. (I love the closing comment from The Register article on this: “Lawyers for the Arc de Triomphe and Stonehenge were last seen kicking the dirt dejectedly.”)

The idea of a visual system is to create a common look and feel that lets you easily spot material from the same company. This before-and-after comparison shows the difference. Individually, the before materials are fine pieces of work, but it’s hard to see that they all come from NetApp.

Notice how we use the logo as the foundation of our visual design. Sometimes we use fragments of the logo, or shapes that are reminiscent of the logo, as in www.netapp.com. Other times a large logo interacts with other images, as a platform to hold them up, or a gateway for them to step through. The complex shape of the old logo was hard to use as anything except a stand-alone symbol.

It’s funny how logos absorb meanings and feelings. Why would two arcs painted a particular color represent food? There is no logic to it, but when I drive down the interstate and see those golden arches, it definitely means hamburgers and french fries. I know that the golden arches don’t inherently “mean” hamburgers, and I won’t argue that they are an artistic triumph, but over time this simple symbol has built up powerful associations.

The Arc de Triomphe inspired our “blue gateway” logo. The triumphal arch is a symbol of victory and progress going back thousands of years. I understand that there’s nothing inherent in the shape that means “innovative enterprise storage that helps you go further and faster toward your goals,” but if we continue helping our customers to succeed, then it will absorb those positive associations over time, just like the old logo did. I don’t know if the new logo is artistically better than the old one, but I think it’s a better symbol for NetApp.

As I said, I loved the old logo, but after 16 years, it no longer met NetApp’s logo requirements. It’s no surprise that I like the new one, since I helped chose it. More importantly, the new logo meets the design requirements much better than the old. And I love the flexible way we are using it as the foundation for our visual identity.

NetApp is a Well-Kept Secret. Time For That To Change.

Today, NetApp is launching a new “brand identity”. This includes a new logo, a new tagline, new messaging framework, a completely reworked corporate website -- the whole shebang. We are even changing our legal name from Network Appliance to NetApp. (For more details, see our new web site, this press release, and this podcast on the research behind our new brand.)

To understand our motives, you have to understand the relationship between brand and awareness. Awareness is about how many people are familiar with your company, and brand is about the stuff that you tell them in order to increase awareness. The new brand is the first stage of a new awareness campaign. Over the next few years, NetApp will spend tens of millions of dollars on awareness. Before we spend all that money, it only makes sense to get very clear about what -- exactly -- to tell people in all of those advertisements and customer programs!

At its heart, branding is about making promises. If you explain to people how your company can help them, the “brand promise”, then they can figure out for themselves whether to buy from you. (I wrote this blog entry about the idea of a brand as a promise.)

Based on past experience, I expect many readers -- especially technical ones -- to view this as so much marketing bullshit. Ironically, NetApp has never spent much on branding and awareness because our engineering-centric executive staff largely shared this view. We were skeptics! Other skeptics might like to hear why I’ve changed my view.

Since the goal of developing a new brand is to increase awareness, the most obvious question is why we think awareness is important. NetApp’s unaided awareness is less than 10%. Unaided awareness is when you ask potential customers to name all of the vendors that they would consider to solve a particular problem –- storage and data management in our case. Less than 10% of potential customers list NetApp. That means our unaided awareness is very close to our market share, which is also about 10%. Pretty much everyone who knows about NetApp is buying from us. Think about it: Everybody knows about EMC, but only a third of them choose to buy from EMC. Ten percent of people know about NetApp, and almost all of them choose to buy from us. Apparently, pretty much everyone who knows us likes us. Just imagine how well we could do if the other 90% knew what the 10% know!

One barrier to increasing awareness is that people call us so many different things: Network Appliance, NetApp, NetApps, Network Applications, Network Associates. What’s worse, our own material said both NetApp and Network Appliance. How can people remember you if they don’t even know your name? More people call us NetApp, and it’s shorter and easier to remember, so we decided to reduce confusion by legally changing the company name. Now we are NetApp. (FedEx did a similar rebranding in 1994.)

“Okay”, I hear the skeptic saying, “that makes sense, but did it really take expensive consultants to figure out that you need a single name and that you should start advertising?”

That’s fair, but other aspects of branding are trickier to get right. I said earlier that if you tell people what you do, then they can figure out for themselves whether to be customers, but it’s tricky to get the details right. Your explanation must be honest, clear, and relevant. If you aren’t honest about what you can do, customers will figure that out, and you’ll have a nasty backlash. If you aren’t clear, then people won’t understand what you are trying to say. Also, you must take a variety of audiences into account. Historically, we focused on the technical folks who use our products, but the higher-level business people who write the checks and make final decisions on vendor selection are equally important. Finally, you must be relevant. There are many true things that we could say about NetApp, but we want to share the true things that customers care about, that will make them want to buy from us. (Just to be clear, there is a profit motive here.) For our top level messaging, we also want to say true things that are of interest to both technical and business people.

Getting all this right takes careful research. We interviewed customers to hear why they buy from NetApp. We worked with industry analysts to validate customer input and to express the messages as clearly as possible. We did test marketing -– complete with one-way mirrors -– to see whether potential customers understood our messages, and whether they cared. (As an engineer, this whole process surprised me. It felt more like an engineering development project than I expected, complete with requirements, development, testing, debugging, milestones and everything.)

As part of the launch we are changing many things –- the logo, the tagline, the messages –- but we are not changing NetApp itself. Since we began, NetApp has changed from a small startup to a major IT vendor in enterprise data centers. The brand launch is not about driving more change; it is about introducing people to what NetApp has matured into, after fifteen years of successful growth.

NetApp has been a well-kept secret for too long, and we intend to change that.

Management Tip: To Defend a Decision, Highlight Its Flaws

Sometimes the best way to defend a decision is to point out its flaws.

Let’s say you have decided to pursue “Plan A”. As a manager, it is part of your job to defend and explain that decision to folks who work for you. So when someone marches into your office to explain that Plan A sucks, and that Plan Z would be much better, what do you do?

My old instinct was to listen to Plan Z, say what I don’t like about it, and to describe as best as I can why Plan A is better. Of course, the person has already seen these same arguments in the e-mail I sent announcing the decision, but since they don’t agree, they must not have heard me clearly, so I’d better repeat them again, right? I can report that this seldom works very well.

It works much better if I start out by agreeing: “Yep. Plan Z is a reasonable plan. Not only for the reasons you mentioned, but here are two more advantages. And Plan A – the plan that we choose – not only has the flaws that you mentioned, but here are three more flaws.” The effect of this technique is amazing. It seems completely counter-intuitive, but even if you don’t convince people that Plan A is better, hearing you explain its flaws, and the benefits of alternate plans, makes people much more comfortable.

Here’s what I think is going on. When a decision comes down from on high, it can be scary, because people wonder whether management understands the consequences of their choice. If you understand the pitfalls of your plan, it reassures them that you didn’t make the decision blindly. If you knew all that stuff, and still chose Plan A, perhaps it’s not as they thought. Ideally, being open about pros and cons leads to a conversation in which you can convince them that Plan A really is better. But whether that happens or not, they’ll definitely leave feeling better than if you simply pretended that your plan was perfect and that the alternative was completely stupid. (Of course, if the person raises flaws or alternatives that you hadn’t considered, then you may need to reopen the decision. When to reopen decisions is a whole nother topic.)

This is part of a larger philosophy. I want an environment where it’s okay to openly discuss the pros and cons of ideas and plans. Every idea has advantages and disadvantages. I shouldn’t take it as a personal attack when someone points out a flaw. When you choose a plan, you choose it flaws and all. The best way to succeed is to be open about the flaws, and work to avoid them.

It helps to avoid a strong link between ideas and people. If I think of an idea as mine, then when you insult it, you are insulting me. If I think of an idea as a hypothesis that we can investigate together, and maybe modify together, then we can discuss flaws and alternatives without making it personal. When ideas are a joint project with multiple people contributing, you end up with something better than anyone would thought up on their own.