NetApp speaks of 'new era' of consolidation

Some words of advice this week for companies unsure of the next step in the evolution of their IT systems.

Dan Warmenhoven, chairman and chief executive of California-based global storage and data management giant NetApp said moves towards a more virtual IT infrastructure could facilitate far better business results. Such moves involved consolidation, a virtual infrastructure and dynamic transformations to enable the removal of fixed infrastructure.

Providing an example, he said British Telecom, which had eight data centres last year, had rid itself of truckloads of equipment and moved into just five data centres. The scale of this consolidation, together with server virtualisation, achieved dramatic transformations in terms of reducing of the amount of equipment required to achieve a particular business objective. The smaller amounts of power and cooling required achieved substantial savings.

"I believe that most IT organizations swing back and forth between two primary modes," Warmenhoven said. "Primary mode number one is expansion - new business applications for business enablement, scaling up, growing the business. The other is about how they can reduce the cost of their IT operation. They want a fair amount of expense out because business conditions are such that the pressure is on."

He said that in many ways, businesses were going through a kind of reengineering process, essentially to try to expand their revenue in the face of declining opportunities. This pressure is being applied to companies' IT operations at the same time as the need to cut spending.

He said data centres had always been regarded as places to assemble assets; on which to provide for depreciation. But within most data centres there are huge opportunities to cut spending through consolidation.

"[The focus now is on] consolidation and squeezing a lot of the infrastructure cost down," Warmenhoven said. "You need an infrastructure that can handle all kinds of applications, is very agile, efficient and focused on cost. NetApp has developed a lot of technologies that try to improve utilisation and the whole idea is this: your budget's not going up, but the amount of data you've got is. How are you going to close that gap?"

NetApp, which has more than 130 offices around the world, has annual revenue of US$3.3 billion (Bt115.43 billion) and 8,400 employees. The company offers 138 business applications covering the design, development and delivery of products to market.