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8/30/2010
08:55 PM
Bob Evans
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Global CIO: NetApp In Ascendancy: An Exclusive CEO Interview

The CIO surge toward virtualization and NetApp's "50% guarantee" are driving the company's powerful growth, says CEO Tom Georgens.

One of the most chilling IT-related comments I can recall came out in a conversation yesterday with NetApp CEO Tom Georgens as he was relating some of the challenges his CIO customers are facing.

And the knee-knocker Georgens related should serve as a 2x4-across-the-face reminder to all CIOs and to all IT vendors that most of yesterday's tech strategies and approaches and products are woefully inadequate for today's high-velocity online global economy and will consign change-resistant companies to mediocrity and then irrelevance and then ruin.

Here's what Georgens said: "One CIO—and he's with one of this country's best-known and best-run companies—said that at his company, IT is regarded as the single biggest threat to the future of his firm.

"And he has one—and only one—chance to change that."

The change he's looking for is most certainly not more of the same: more complexity, more integration, more tinkering and tuning, more isolated silos of infrastructure supporting more isolated islands of applications requiring truckloads of new storage systems interconnected with to tens of thousands of fiercely independent (translation: a mess) end-user computing devices.

So Georgens is spurring NetApp into the breach with the audacious promise to CIOs that his company can meet their storage needs with 50% less physical storage infrastructure than competitors will require. The secret is NetApp's unshakable belief that the future of storage will be based on the central role of virtualization in the ongoing transformations of IT systems in general and data centers in particular.

Storage strategists might want to split hairs over that philosophical position, but lots and lots of CIOs seem convinced: NetApp just announced its third straight quarter with revenue increases of more than 30% and is now on an annual run rate of almost $5 billion.

Asked if he feels like the leader of a band of revolutionaries, Georgens laughs and says no, it's just a matter of applying the right tools for a brutally complex job.

"If you go into some of these big installations that competitors have, and we tell them that we can match or beat that performance with only half the physical number of boxes—well, in today's environment, people have to listen," Georgens said in a phone interview Monday.

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"At first we lay off some of the tech talk but in general make sure they get a sense that we've got all sorts of technology capabilities that yield very compelling cost of ownership for them.

"We struggle constantly with the issue of awareness, and in spite of our success and our growth, a lot of people still don't know who we are. And as we grow, more and more of the deals we're competing for involve companies that are much better-known than we are," he said.

"So when we go in and explain what we can do and how we can do it, a lot of time the customers say, 'Well, that's interesting, but I don't hear that from the other guys—if you can really do what you say you can do, why aren't the other guys doing similar things and talking about similar approaches?' "

But nine out of 10 of Wall Street's biggest firms have dropped such skepticism and bought into the NetApp approach, Georgens said. And as for the 10th:

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