Is the beginning of the new NetApp diversification?

If you think about diversification within an investment portfolio, it becomes imperative. If you are leveraged too much in a single industry or company than you become imbalanced. Imbalance becomes risk very quickly, which is why diversification is so important. Diversification from a product company is also important, no one wants to run or work for a company that only has a single widget to sell, or only one customer to sell to, it’s far to risky. You then draw parallels with the hammer company analogy, if all you sell are hammers everything becomes a nail. I dislike that analogy in a lot of ways because it implies that sales people care more about themselves than doing right by their customers which while true of some isn’t true of the majority. The other issue is single product companies face issues with market saturation or market space losses when they can’t pivot to meet the new challenges that arise in their industry. Determining product release cycles or acquisition strategies to meet gaps and needs is an exercise in risk management. (WTH Mike are you trying to teach intro to economics?) No, no I am not, I am trying to work through some stuff.

NetApp is making a transition to a portfolio company, to do so you basically have to slog through a lot of mud to get there. There are several challenges to get to a true portfolio diversification, the first step is determining product line differentiation and swim lanes (woot woot PM lingo included). The reason you get your swim lanes in order is so you can help the field sales team position the portfolio around business use cases. Which is important because when you are dealing with portfolio through acquisition when you were previously competitors requires a re-programming of the corporate kool-aid. Organizationally you have folks that have gone whole hog and bleed the corporate approved hex colored blood, they have read the FUD docs on their newly acquired family members, and know how to position against them. The issue is now they have to see the value of this new tool in their toolbox and when it overlaps which solution makes more sense.

Part of this retraining is getting your head around what the industry looks like today, hence the Storage Archetypes posts, because you have to name something to know it. So we bucketize things and put a name to them so that we can begin to better understand where and why it fits someplace. Then we build onto that understanding the of what organizations need to do, essentially what are the problems that need to be solved. Once we get those laid out we can overlay based on our swim lanes which products with-in a portfolio cover which business needs.

There are so many data driven decisions that have to happen in this process, and it’s not always a clear decision. At EMC there was an approach of “eat your young” where if a product in the portfolio was succeeding more at one use case than another than the losing product’s business prop could be cannibalized by the newer successful product. But that doesn’t need to be the case, that is almost a forced reaction when there is too much product overlap. If the portfolio is more complementary and grown with forethought than there is less of a need for that. I believe the NetApp portfolio today has that forethought, yes there are still gaps that need to be addressed, and yes there is some overlap but I think it’s far more addressable than what I have witnessed in the past.

This week is NetApp’s SKO, this process will this week begin to bare its fruits, but there is still so much left to do. Both the education and re-education of the sales force will take time, the proof being born out that one solution has more fit for specific circumstances takes time. Time is not something the market likes to give, so there may appear to be missteps or overlap at first, it will get better. We will get better. We have to in order to be successful.

My sole request is that everyone be willing to open their minds from what they know, and be willing to listen and learn about the new paradigm and the new capabilities that the new NetApp can bring. Transformation is the life of IT, we have to push forward and change, it’s time for NetApp to transform into a true portfolio company.