NetApp - Exposed

Building an Admirable Billion Dollar Company - The Recipe Book

"It's easy - All we have to do is sell products we haven't developed yet, to customers we haven't met yet, with people we haven't hired yet" -- Tom Mendoza in 1994 upon receiving a billion-dollar quota after booking $40M the year before.

I've known Dave Hitz for almost 11 years now, and I still marvel at his story-telling abilities. It's not just that he can repeat a story well, or that he can craft a compelling original one with the same ease. Dave has this rare talent for distilling complex scenarios of all kinds (technology, business, life, etc...) into simple analogies which even my immigrant grandparents could understand. The final subtle yet critical distinction is that he does it without insulting their intelligence. Add a disarming wry sense of humor and you've got the formula for what makes Dave truly exceptional.

Venture Capitalists are highly paid professionals who focus full-time on identifying the next "great idea" and then molding it into an enterprise which will hopefully reward their efforts handsomely. They've each developed their own proprietary formulas for success which understandably remain closely guarded secrets in their community.

This is the book for the rest of us.

In it, Dave applies his highly approachable story-telling skills at exposing critical lessons learned along the way towards building the very special company that NetApp has become. Executives and business leaders will naturally absorb many key elements from this book, but the real magic of it lies in the long-term observations that every employee of a young, ambitious, successful company can take away.

NetApp's Secret Competitive Advantage

Over a year and a half ago when I still ran our competitive team, I was asked a relatively straightforward question by our CEO (Dan Warmenhoven) during the taping of a company-wide radio (podcast) interview.

What is NetApp's Competitive Advantage?

Both of us were probably thinking I would build my answer starting with our cool technology, or maybe some exciting upcoming product announcement. Perhaps I would regale in a sales anecdote about how we displaced a direct competitor in a major account.

But as I was formulating the response in my head, I quickly navigated to the source of it all.

If Billy Connolly were a storage guy

The blogosphere just got richer today, and our competitors have one less place to hide their flawed logic.  NetApp has unleashed our very own Big Yin, Alex McDonald with his new blog:

http://blogs.netapp.com/shadeofblue/

The profoundness of his observations is matched only by the sharpness of his wit.  I'd love to embed some clever Billy Connolly YouTube clip here to drive the point home visually, but I couldn't find any that were SFW, so you'll just have to amuse yourself :)

Welcome Alex!

The force is also strong with Chris

Chris Mellor that is, from Blocks & Files.

I summarized the Zen of NetApp in one of my first blog posts, and despite the mixed metaphors, Chris did an outstanding job in his opinion piece on us the other day very much in the same vein.

If you want to *really* understand NetApp, it's definitely worth a read!

Of Cockroaches, Antibodies and Corporate Culture

This past summer I was asked by Dan (our CEO) what I thought the essence of NetApp’s competitive advantage is. I surprised myself a bit by resisting the urge to cite our technology or the people that make it happen. The underlying answer is best told by exposing a recent anecdote about my team.

Segmenting Competitors

Like most competitive groups we segment our competitors into various categories. Major competitors include the usual suspects who also sell storage either as a core competency, or by happenstance as part of an overall systems business. This is a short list. The far more speculative and therefore intriguing ones however are those smaller competitors from below. That is a much longer list and considerably more dynamic, which courtesy of a vibrant VC / M&A market also seems to grow almost every week. Of that group we naturally we pay the most attention to those competitors who have demonstrated market traction.

Nicknames

At one point we also gave them a catchy nickname. It was a carefully selected double-entendre. On the one hand, we wanted to recognize their success via a measure of respect, yet on the other hand we wanted to assert some antagonism into the nickname since this is after all a very competitive industry. So we elected to go with “Cockroaches” as our nickname for emerging competitors. As a species, Cockroaches are renowned for their endurance  in the face of various real and potential predators far higher up the food chain. That takes care of the flattery. Humans’ general revulsion by that same species also neatly satisfies the antagonistic requirement.

Getting Carried Away

Quite proud of this nickname, my team & I started using it liberally in our discussions of deserving emerging competitors. And that’s when the trouble started.

You see, NetApp as a business has been at the forefront of establishing a strong & positive “corporate culture” as an asset. We’re actually the only focused storage vendor to even have a page dedicated to it on our web site, and one of a precious few in the IT industry to emphasize the topic at large. We’re quite proud of it and as per my earlier “Zen” posting on this blog, we’ve received numerous industry accolades as a result.

Corporate Antibodies

Strong corporate culture also means developing a proper immune system to help us set and maintain a higher standard. Those “corporate antibodies” actually kicked in as my team & I started abusing the privilege of the cockroach metaphor. Although never intending to use the term punitively or publicly, it nevertheless inevitably leaked out to our partners, customers and even some of  those emerging competitors as well. A while after my team introduced the term and just about when we started abusing it, some very thoughtful NetApp colleagues chimed in and passionately argued in defense of respect for our competitors. Their forces quickly grew in numbers and became the prevailing opinion.

As you can imagine, this is a perspective that is an affront to the emotional side of any team dedicated to beating the competition at every instance. Yet try as we did to deny the truth, the rational side in us acknowledged that those colleagues of ours were indeed right. Moreover, they are the embodiment of NetApp’s Corporate Culture and they acted properly as the corporate antibodies that sustain it.

Our True Competitive Advantage

So then, what is the essence of NetApp’s competitive advantage ? Our corporate culture of course. Coming back to my answer for Dan, fundamentally our strong and positive corporate culture is what attracts and retains the top talent in our industry to plan, develop, market, sell, service and support the innovative solutions NetApp is renowned for.

Zen and the Art of Enterprise Storage

Almost a decade and counting now, my time at NetApp has been a career oxymoron.  You see, I've never been at a job (or contract) longer than 3 years before I joined NetApp (known as Network Appliance then) back in 1998.  Those who know me well often ask me why I'm still here, because they're keenly aware of my tendency to get bored easily and look towards the next challenge after the inevitable multi-year itch comes around.

I plan to expose many things in this blog, so in the spirit of fairness let me first expose myself a bit and explain the Zen of NetApp that not only keeps me here, but has me looking forward to my next decade @ NetApp.  To do that, I had to look waaaay back to my formative years when I read Robert M. Pirsig's Zen and the Art of Motorcycle Maintenance.

Robert's book title and text is widely quoted on the Internet, but it's his exploration of the spirituality of quality regarding how things are made and how they're used that always stuck with me.  Interestingly, that Zen seems to resonate increasingly over time during my career at NetApp.  So let's break that down a bit.

INNOVATION

Innovation is probably at the heart of it all.  This covers the "how things are made" part of the Zen in question.  My inner geek is still drawn to cool technology.  Our core DNA (summarized here by Bruce) is what attracted me to NetApp a decade ago, and our engineers continue to re-capture my imagination every few months with each new product release cycle.  I will no doubt post countless blogs on this topic alone, so I won't belabor the point here, but click on the graphic above & to the right for a short flash overview of but one great example of NetApp technology innovation widely used today.

APPLICATION

Layered on top of innovation is the "how it's used" part of the Zen.  The application of our innovation knows few limits today, being used across all industry verticals spanning the globe.  We help Main Street make and sell things, and we help Wall Street trade.  We help move people by land, sea and air.  We help provide energy, offer cost-effective services and after a good day's work we also help people play, but I personally believe there is no more noble application of technology than helping people heal.

SATISFACTION

One of my proudest moments at NetApp was seeing my initial storage customer in 1998 be awarded the inaugural NetApp Award for Individual Innovation several years later .  In and of itself that would have been cool.  But what took it to a higher plane was that Mark's organization was the first to decode the SARS virus applying NetApp innovation!

Seemingly many others enjoy a high sense of satisfaction with NetApp.  We are not only one of the highest ranking storage suppliers to be selected by Fortune Magazine in their Best Places to Work surveys, but we are actually the only tech company other than Google to crack the top 10!  Fortune also lists NetApp as one of the most admired tech companies.  Cross reference those two Fortune Mag lists and we humbly find ourselves in some pretty heady company!

Pulling it all together for me, "Zen and the Art of Enterprise Storage" is really about a heightened sense of personal satisfaction from the broad application of NetApp's unique innovation.

P.S. Ironically my day job running our competitive team is conversely related to this Zen, where my team and I work hard to make sure our competitors sing the blues, specifically the Rolling Stones' (I Can't Get No) Satisfaction.  I'll have much more on that later, so stay tuned!