Ten Years of Vision, From IPO to Fortune 1000

NetApp went public a bit over 10 years ago, so that makes it about 10 years from IPO to Fortune 1000.

I just stumbled across an internal e-mail that I sent to all of NetApp in 1996, shortly after the IPO. I thought you might be interested to see what our goals were way back then. It's amusing to see that Sun still had 35% share of the NFS market. We were just starting to branch out from UNIX and also target NAS for Windows. SAN and iSCSI were so far in the future that I didn't even mention them. Still, I think you can see how these goals laid the foundation for what we have become.

When Tom Mendoza, president of NetApp, gives talks to our new employees, one of the things he tells them is that they should write down their goals. Something about putting your aspirations in writing makes them more likely to come true. I think the same is true for company aspirations as well.

Here is the e-mail:

From: Hitz, Dave
Sent: Wednesday, February 21, 1996
Subject: What's next for James and Dave

We've had several people ask "what's next for you," both inside the company and outside. I've had VCs and head-hunters call with the "next great startup". In some ways, this may make sense. Many people do view an IPO as an ending point. During most of our time at Network Appliance, the IPO was a distant target that we mostly ignored as we aimed at nearer goals, like fixing the next bug or shipping the next product.

So having reached the IPO, maybe it does make sense to ask, "What next?" And yet, when James and I think back to what we thought we could do when we first started Network Appliance, we realize that we've barely begun to accomplish our original goals:

(1) Convince the industry that network file service should be handled by filers, and that NetApp filers are the ones to use.

We believed that filers and the appliance philosophy could change the way people view network file service in the same way that Cisco routers changed the way people viewed network routing.

For people to understand the appliance philosophy, they must hear about it. For people to choose NetApp, we must design and ship the best filers possible, and fix problems when they do occur.

(2) Become the market share leader of network file servers.

This goal follows from the first. Unless we lead the file server market, we obviously have not convinced the industry that filers in general, and NetApp filers in particular, are the best solution for storing network data. (Right now we've got 1 to 2% percent market share in NFS. The leader, Sun, has 35%. Moving into the NT space will grow our target market and decrease our market share!)

Note that the goal is not to be the market share leader in filers. We accomplished that goal back in 1993 when we shipped the first NFS filer to Patrick Mulrooney at Tandem!

(3) Become a Fortune 1000 Company.

Please understand: GROWTH FOR THE SAKE OF BEING LARGE IS NOT A WORTHY GOAL.

We must grow to meet the objectives above. We cannot change the industry and lead the market as a small company.

Even though growth can sometimes be confusing, stressful, and painful, it can also be exciting, especially when growth is what allows us to make a real difference in the industry.

It should be obvious that James and I have not achieved our goals. From where we started, we've come less than half way. The challenge ahead is at least as large as the challenge from founding to IPO.

What we have accomplished is to build a foundation for the real mission. The people here now will, over time, become the core that holds NetApp together as we grow.

Thank you all so much for joining us!

James and Dave

Just to put things in perspective, let me point out that we had about 100 employees at that time, and maybe $50m in revenue per year, so becoming a Fortune 1000 company was an aggressive goal.