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1/23/2003
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CEO Visions: How To Win At The Storage Game

Storage vendors must deliver rapid return on investment and a low total cost of ownership, Dan Warmenhoven of Network Appliance says.

The past 24 months have been brutal for information technology, and the outlook for 2003 doesn't provide much hope for growth. Despite this, there's encouraging news for the storage and data-management industry, which can expect to see a larger portion of IT budgets. But the competition for those dollars will be fierce, as CIOs and IT managers have become markedly risk averse.

To succeed in 2003 and beyond, vendors must deliver rapid return on investment and a low total cost of ownership. Storage companies that thrived in an environment in which customers were almost forced to purchase overpriced systems can no longer succeed against competitors offering more-efficient and cost-effective grow-as-needed modular systems. In these tough economic times, managers must leverage their organizations' information assets to yield more value without compromising availability, access, or performance.

So what exactly do IT managers want? Simpler and better management solutions. The amount of information companies need to access, manage, and distribute is growing every day, and they need to have fast, secure access to their data in order to become more competitive. Add in the fact that most companies have systems from multiple vendors, and the result is that heterogeneous storage management is key. They need ways to seamlessly integrate all vendor systems within their infrastructures.

IT managers also want to work with companies that will be around for the long term, companies that provide the highest level of service and confidence. They want to work with companies that sell them what they need, not a list of technologies and products. CIOs are tired of hearing about the alphabet wars, and they need to solve real business problems.

To satisfy these requirements, vendors will need to focus on several key factors to achieve success. Partnerships will become critical for any storage vendor since IT managers recognize that one vendor can't adequately meet all needs. Vendors also must work to develop and implement standards to ensure that today's storage infrastructure will be the building blocks for tomorrow's networked storage.

On the technology front, exciting things are happening. The trend away from direct-attached storage and to network storage will continue unabated. It's also clear that most companies need both network-attached storage and Fibre Channel-based storage area network systems that will let them easily access, manage, and distribute their information. The emergence of networking technologies such as iSCSI, an Ethernet/IP-based storage networking standard for linking data storage facilities, will offer even more flexible, cost-effective options as companies migrate to network storage. Also, look for the continued proliferation of ATA drive-based systems, which enable new ways to perform data backup and recovery. The low cost of ATA drives (equal to tape costs) will allow less-expensive disaster recovery and will let such recovery efforts be applied to more applications and data types.

One of the few certainties in the IT world today is that the amount of information will continue to grow rapidly, creating an accelerating need to efficiently store, manage, and provide access to that information. Despite the lagging economy, we see a tremendous opportunity for companies focused on providing data management and storage solutions. At Network Appliance, we've always built our products to be simple, flexible, and manageable, and to offer low total cost and rapid return on investment. These qualities combined with a focus on the network storage industry are a must in today's environment.

Dan Warmenhoven is CEO of Network Appliance Inc. He was one of BusinessWeek's "Top 25 Managers for the Year" in 2001.

Photo of Dan Warmenhoven by Sacha Lecca

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Do tech stars like Michael Dell, Steve Ballmer, and Carly Fiorina see the future clearly? Check out what our complete panel of 32 visionaries have to say here.

Columns By Other Hardware Company CEOs
Craig Barrett, Intel Scott McNealy, Sun Microsystems
John Chambers, Cisco Systems Inc. Sam Palmisano, IBM
Michael Dell, Dell Computer Joe Tucci, EMC Corp.
Carly Fiorina, Hewlett-Packard Dan Warmenhoven, Network Appliance Inc.

Is the author right? Or out in left field? Have your say on this column and the rest of our Future Visions package at informationweek.com/forum/informationweek

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