Wishful Thinking

Many of you noticed NetApp's recent rebranding push this week.

Since I'm sort of a marketing guy, and NetApp is sort of a competitor, I watched with considerable interest.

Simply stated, it didn't seem to go so good for them.

And I think there are some lessons to be learned for all IT vendors.

What Happened

I don't think this was a really good week over at NetApp.

The first thing I saw was Dave Hitz' blog post last Sunday detailing what they were doing, and why they were doing it.

What jumped out at me was Dave's statement that less than 10 percent of people surveyed didn't associate NetApp's name with "storage and data management".  He then concluded that not enough people knew what his company did, and therefore they needed to spend "tens of millions" to get the good word out.

I think they asked the wrong question.  Maybe if the question was "name a vendor that does NAS for tier 2 applications", I bet they would have scored much, much higher.

I can only imagine what what other vendor names did better ;-)

My impression?

NetApp doesn't like what they're known for.  They want to be known for something different.

Dave Explains Branding

I found Dave's take on branding interesting, but I think he missed one key point.  In our industry, brands are built from the inside out. 

You want to be known as a trusted partner to large enterprises?  Then you should focus on being a trusted partner to large enterprises.  No amount of web spam is going to do that for you.

During their analyst day this week, Dan Warmenhoven explained that not enough people knew who they were. 

My initial reaction?  He's mistaken.  Everyone knows who NetApp is.  And maybe that's the problem.

Don't like your reputation?  Become somthing better.

Rather than spend time and effort on marketing, perhaps the better investments would be in improving your products, enhancing customer support, offering consulting, and so on. 

In our business, brands are built one successful customer at a time.

The Logo Snafu

New corporate logos are largely a subjective matter, but the criticism here has been brutal.  Not only did they inadvertanly pilfer another company's logo, but it's now open season for snide commentary.

More interesting was their "beating heart" web campaign, designed to create the impression that NetApp products are at the heart of the enterprise.

Again, maybe this is true in a few cases, but not in the general case.  Not only is this out of touch with market realities, but it's inconsistent with past actions as well.  Over the years, a few NetApp execs have repeatedly commented that they want to target the "tier 2" environment in large corporations. 

Sure, that segment is important, but it's not exactly where the corporate jewels live.

Another example of wishful thinking.

We Need More Sales Reps!

Also at their analyst meeting, there was sharing of plans to seriously increase NetApp's direct sales force.  Big (expensive) numbers like a thousand were tossed around.  The idea is that if they had more sales reps, they'd sell more products, and continue to grow.

There are several interesting aspects to this approach. 

First, it's very expensive.  To pay for this new army, it looked like NetApp took down their margin forecasts for future quarters, and -- as a result -- the financial analysts were generally not pleased.

Second, if you're a NetApp partner, the idea of bumping elbows with a horde of new direct sales reps isn't exactly appealing.

Third, if you're already a NetApp customer, it's hard to see how all this investment in sales and marketing is going to benefit you directly.

Finally, it presumes that customers don't know about your products, and would buy them if they only knew.  I find this very hard to believe.

If, by some chance, you've never heard of Network Appliance (now officially NetApp), and don't know anything about their company and their products, please see their new, slick corporate web site here.

So, What's Missing Here?

If you really study these announcements, there's usually more to be learned by what's missing, rather than what's said.

No talk of new products, technologies or solutions. 

No talk of new markets or new customers. 

No talk of new investments to support customers in better or different ways.

Just more sales people, and more marketing.

Just to be clear, I welcome NetApp (and HDS, and IBM, and others) as competitors to this marketplace.  Good competition makes for good products, and customers always win when there is vigorous competition.  And, trust me, competition in this corner of the marketplace is vigorous, to say the least.

What's To Learn Here?

Marketing types sometimes use the term "brand inconsistency" when what you're saying doesn't exactly line up with what you're doing.  Over the past few years, I believe NetApp has done a remarkable job of being consistently inconsistent -- the reality only occasionally matches up to the words we hear.

If you're a sophisticated IT consumer, you're probably noticing it in this case.  You're not alone, Beth offers up similar comments over at SearchStorage.

I think there are two ways to become something different in the marketplace.

One way is to spend a bunch of money to try and convince people that you're really different.

The other way is to invest the time and effort to actually become what you're trying to be.

I think that -- in the long term -- customers react better to the second approach than the first one.

I bet they're really glad it's Friday ...

Comments

[TimC]

What to learn here? Chuck is GREAT at attempting to kick dirt without actually doing any research. This seems to be a pretty common theme for your blog, so I'll clear a few of them up for you. I don't even work for NetApp and these were all easy:

No talk of new products, technologies or solutions:

They've just released new high end arrays: The FAS6080 and FAS6040. They're also working on releasing SAS based enclosures. Finally they've updated the roadmap with ONTAP 8.0, the convergence of GX and 7G.

No talk of new markets or new customers:
They just brought Storevault back under the corporate umbrella meaning new customers by way of SMB. Although, I'm not exactly sure where you expected them to go with this? They did announce that they're going after something like the Fortune2000, or Forbes2000, I can't really remember off the top of my head. Regardless, they definitely *announced new customers*.

No talk of new investments to support customers in better or different ways:

Actually yes... they've just implemented premium autosupports which is a night and day step up from the old support tools provided to customers.

Although, I think this is the pot calling the kettle black. I recall your post about your great new website not so long ago, without any announcements about any of the above either...

[Stewey]

Dave,

You're right on with your analysis. I'm a huge NetApp (by the way, there's no S in NetApp) fan and I'd like to feel that I will always be one.

However, this new marketing campaign is an absolute disaster. I'm surprised you weren't more critical on the beating heart thing. It looks like some kid out of high school designed it and quite frankly, it's kinda gross!!

I can only hope that they pull the ad quickly and replace with something else. The logo, well, it doesn't bother me all that much. Too bad they didn't do their research well enough.

[Chuck Hollis]

Actually, I did a bit of research.

The arrays you referenced were announced on Dec 10th of last year. There was no public discussion of any SAS arrays that I could find.

Updating a long-delayed roadmap doesn't constitute new technology, it constitutes a PowerPoint placeholder, IMHO.

Not to be pedantic, but the StoreVault division wasn't successful in SMB, hence its folding back into the corporate umbrella. More bad news here, I'd offer.

I hadn't heard about "premium autosupport" before -- why no public discussion?

And, just to be clear, EMC didn't issue a press release about our new web site, we didn't think it was newsworthy enough. But, as a blogger, I thought it was worth a mention.

Now that we've set the record straight, you can go back to your happy place with your filers.

Best regards ...

[Clive Bearman]

As a marketing guy myself I was impressed with the coverage that they managed to pull off last week. It just seemed like they were everywhere. I saw print ads in Forbes, and on-line ads in the trades such as eWeek, Information Week, ComputerWorld etc. They even ran an ad on WBUR, here on the East coast. I also know that exposure like that must have cost a pretty penny.

But now I'm left wondering what did all of that traditional PR actually accomplish? Will that sort of spend leave everyone with an impression that NetApp is in it for the long haul. Or merely reinforce the metaphor of here-today, gone tomorrow?

[Joseph Martins]

While I am always skeptical of the value of rebranding efforts, I diasgree with your less than positive assessment of Netapp's recent maneuvers. I happen to believe they're headed in the right direction.

But first, an aside.

Like the sales side of any business, the buy side makes its fair share of claims that fail to align with reality. Technology buyers are increasingly vocal about their distaste [and distrust] for sales and marketing, yet they continue to be heavily influenced by both. Dare I say some buyers are irrational at best and hypocritical at worst.

If solid engineering and support consistently topped marketing at the cash register, why the increased focus on marketing in all sectors? Because it is increasingly effective. Once could argue that EMC's mastery of marketing has served it quite well over the past decade - as it should.

We observe the same phenomenon in modern U.S. politics. Voters complain about negative ads and non-stop campaign coverage, yet they tell a completely different tale at the voting booth. While enormous campaign budgets cannot guarantee political victory, the lack thereof can [in most cases]guarantee political defeat.

Back on topic...

I believe NetApp does have an awareness problem in and outside its core competencies. While this might be difficult for you and I to believe, the numbers cannot be ignored. I credit, Dan, George, Dave, Rob and their teams for recognizing that NetApp needed [sales and marketing] help. While I am unable to provide specifics beyond publioly available information, I can write that I am very satisfied with the company's roadmap. As of late, I have been particularly impressed with Jay and Rob. It was clear to everyone present that they spent a great deal of time getting to know their customers and markets. Time will tell if this effort will result in valuable product refinements, bigger R&D investments, and improved customer outcomes.

On a different note, I'm more disturbed by shortsighted financial analysts and their clients - many of whom we have to thank for our current worsening economic crisis. Most value short-term economic gains over long-term business benefits, trading tomorrow for today, and nurturing a generation of executives and managers who work bonus to bonus at the expense of their partners, clients and employees.

I'm no fan of Wall Street. My hat is off to NetApp for giving the financial analysts the proverbial finger. Focus on the business first and the numbers on the Street will eventually follow.

BTW, I agree with your "two ways to become something different", but I should point out that they are not mutually exclusive activities. Companies must accomplish both in parallel.

Disclaimer: we have relationships with EMC and NetApp.

[kpc]

Good Competition is great news for customers.
As a customer, I am a great fan of both NetApp and EMC. NetApp for Products and EMC for Marketing & Support. The change by NetApp was much needed to push into new horizons.

NetApp now started improving its marketing campaign and now its time for EMC to improve its technical products. Too many products and too many softwares confuses people. EMC should focus on Product Consolidation before it becomes one too many.
On a Side note - NetApp products are few and work damn well. So Golf your way in NetApp!