NetApp's Backup Plan

Network Appliance Inc. (Nasdaq: NTAP), in search of new sources of revenue, is prepping a new family of products. Dubbed NearStore, the systems represent NetApps first foray into the backup and recovery market.

NetApp says NearStore systems, which will be loaded with a baseline of 12 terabytes and range up to 100 terabytes of storage capacity, are aimed at filling a gap between NetApp’s traditional network attached storage (NAS) and offline tape backup.

NetApp is presently the market leader in NAS, which provides high-end storage in server form that attaches directly to a network that needs backup (see Storage Networking Glossary). Despite the vigor of the sector, companies have been experiencing the pinch of the recent economic downturn, and they're looking to squeeze new opportunities wherever they can find them (see NAS Goes Mainstream).

NetApp says companies have been seeking products that offer faster access to data than is offered by tape storage gear (hence the name "NearStore"), while falling below the cost of full-blown NAS appliances.

“I really think this is a new market for us. It gives people a new option for what they do with less frequently accessed data,” says Mark Santora, senior VP of marketing at NetApp. "I believe this will lead to more people using IP networks for backup globally."Isn't NetApp risking the loss of some potential NAS business at the low end? Not at all, Santora says. The price/performance differential betweenNearStore and the vendor's existing NAS filers is such that NearStore would not be asattractive to use as a primary storage box, he maintains. NetApp hopes to sell NearStore to customers who would have otherwise optedto back up their near-term data on tape.

The major technical difference between NearStore and NetApp’s NAS filers is that NearStore uses IDE (Integrated Drive Electronics) drives, which are less expensive per megabyte but less reliable than Fibre Channel storage. IDE drives are the standard drives used in PCs.

The products will be priced at roughly 2 cents per megabyte; the entry-level 12-terabyte model will list at $250,000, NetApp says. The vendor is using Maxtor Corp. (NYSE: MXO) IDE drives in the new products.

Santora admits that NetApp hasn't ironed out all the wrinkles involved in the new design. For instance, he acknowledges NetApp is still figuring out the right number of IDE drives per parity drive in the system’s RAID (Redundant Array of Inexpensive Disks) configuration. (A parity drive is the drive in a RAID system that mirrors the bits on the primary drive; it's there in case thefirst disk fails.)

The current test unit has seven drives per parity drive. “That may be too high or too low -- we don’t know,” Santora says.Jamie Gruener, senior analyst at The Yankee Group, says that while the details so far are slim on the NearStore, it’s a promising concept. “It may be close to being a new category,” he says.

But Gruener adds that NetApp needs to clarify the details about how the NearStore system plays with other backup storage management systems.

NetApp’s Santora says it’s “fully compatible with backup vendors,” including backup management tools from Legato Systems Inc. (Nasdaq: LGTO) and Veritas Software Corp. (Nasdaq: VRTS).

Nevertheless, the NearStore product isn’t fully baked just yet, so actual interoperability remains unproven. NetApp expects it to ship NearStore in the first quarter of 2001, and the vendor is currently beta testing the system.

According to Santora, Cisco Systems Inc. (Nasdaq: CSCO) is testing out an 18-terabyte NearStore unit that is mirroring the data on 500 NetApp filers around the world.The new push into backup won’t turn the company around single-handedly (see NetApp Takes a Nap) but it is clearly indicative of its desire to find new areas of growth, says Yankee’s Gruener.

“It’s a very aggressive time for all the vendors,” he says. “NetApp is a market leader in the NAS space, and they’re neck and neck with EMC Corp. (NYSE: EMC) in terms of trying to control that market in the long term.”

NetApp also announced other new products and services:

— Todd Spangler, special to Byte and Switch
http://www.byteandswitch.com