NetApp - Dave's Blog

Three “Cloud Strategies” Every CIO Should Consider

NetApp launched a collection of cloud initiatives today, but I want to step back and ask what cloud means to CIOs. Every CIO I meet seems to want a “cloud strategy,” but the words mean different things to different CIOs. I have discovered that cloud strategies fall into three broad categories:

1. Cloud Provider: Sell IT services over the Internet. Companies often consider this strategy when they have especially strong IT capabilities. Telephone companies, for instance, know how to run large, reliable data centers, so providing IT services to others is a natural fit. Data centers that provide cloud services typically use virtualization to host many customers in a single shared infrastructure.

2. Cloud Customer: Buy IT services over the Internet. These CIOs don’t necessarily want to eliminate existing data centers, but they wonder whether—for at least some of their IT services—it would be possible to let someone else build the data center, buy the hardware, and run the applications.

3. Internal Cloud: Build shared, virtualized infrastructure for internal users. These CIOs want to continue operating their own data centers, but they would like to use the same virtualization techniques as cloud providers to make IT more efficient.

In some ways cloud providers have it easy, because most are designing a new data center architecture from scratch. In fact, much of today’s launch focuses on what we’ve learned from working with large cloud providers like Oracle (for its Oracle On Demand business), Yahoo! (for email), and T-Systems (for its hosting business).

Most CIOs don’t have the luxury of redefining their IT architecture from scratch—they must make incremental changes to an existing strategy. A hybrid model often makes sense. They build an internal cloud and begin migrating less mission critical applications onto it. Or they identify a set of applications that can move to the external cloud. These strategies are not mutually exclusive. It’s perfectly reasonable to build an internal cloud to host the random “garbage applications” that most business seem to accumulate while at the same time outsourcing Oracle infrastructure to Oracle’s On Demand cloud.

 

As I described in this blog entry, NetApp’s goal is “to be the storage technology partner of choice for companies building cloud-compute environments,” and our launch today describes how we do that. There are many technology components, like Data ONTAP 8 and NetApp Data Motion, but to me what’s most important is that we have defined an effective cloud architecture (the NetApp Dynamic Data Center) along with workshops and services that help customers transform their data centers.

 

We have learned an amazing amount by partnering with many of the largest cloud providers in the world, and our goal now is to help others take advantage of this experience.

Tom Georgens, NetApp's New CEO

Today Dan Warmenhoven, our previous CEO, announced that Tom Georgens is our new CEO. Dan will continue as Chairman of the Board, and he will also have a new role, reporting to Tom, focusing on relationships with major partners. His title is Executive Chairman since he's an executive of the company as well as a board member. 

Dan has had an astounding run. When he joined NetApp in 1994, we had forty-five employees and less than $10 million a year in revenue. Fifteen years later, we have eight-thousand employees and $3.4 billion in revenue. For all that we’ve achieved, though, Dan told me that the accomplishment that meant the most to him is being selected as the #1 Best Company To Work For by Fortune Magazine. He has always believed that a healthy culture is just as important as healthy financials.

If Dan is so great, why do we need a new CEO? Dan has had a long-term personal goal of retiring by age sixty – about a year from now. In fact, his original goal was to retire by fifty, but running NetApp was so much fun that he pushed his goal back by ten years. The general timing came from Dan's retirement goal, but this particular quarter felt right because the economy seems to be leveling out. Things certainly aren't back to normal, but the crazy freefall appears to be over and a collapse of the banking system is no longer imminent. It’s best not to change CEOs when a crisis is in full swing.

It’s hard to imagine – after fifteen years of working for the same person – that as of today, I have a new boss. Fortunately, I’ve had plenty of time to get used to the idea. The board didn’t take their final vote until just this Monday, but we’ve been planning this transition for quite a while. When we hired Tom four years ago to run Product Operations – engineering, manufacturing, and product management – we knew that he was a potential successor to Dan. There was no guarantee, but it was something we discussed in our interviews with Tom, and part of what attracted him to join us was the opportunity to become CEO. I’ve gotten to know Tom pretty well over the years. I like how he thinks, but perhaps more important, I like how well he fits our culture. He is a great choice for this role.

To people who know how to read tea leaves, it became clear that Tom was the heir apparent when we promoted him to President and Chief Operating Officer (COO) and Dan became Chairman of the Board as well as CEO. Not only did most of the company report to Tom at that point, but Dan also asked him to run our planning process to develop annual goals and budgets. That combination of moves is a pretty strong signal of what's coming next.

For NetApp this is obviously a major transition, but in fact, the entire IT industry is in a period of transition. Trends like industry consolidation, server virtualization, and cloud computing are shaking up the IT landscape, and everyone needs to respond. With so much change all around, it feels somehow appropriate to have a new CEO. I've loved working with Dan – I have so much respect for him and I've learned so much from him – but it's also exciting to have a new leader. Here's to a new era at NetApp!