Big boys target Network Appliance

Imitation may be the sincerest form of flattery. But what happens when your imitator decides to try to push you out of the market?

Cacheing vendor Network Appliance (NA) is facing just this scenario as computing heavyweights Compaq and Sun Microsystems turn their guns on it.

NA builds appliance hardware, network storage and internet cacheing appliances, and Compaq and Sun have now decided they want a slice of the action. Sun, for one, has just bought a cacheing technology company called Cobalt, a rival to NA, in a move that also poses a threat to Compaq's plans.

"It's nice to have the big boys validate what we do for a living, but unnerving at the same time," explained Chris Gale, NA's Northern European marketing manager. "We've led this marketplace for a while now, won many major deals and apparently worried the likes of Compaq and Sun. Now we have Sun and co helping validate the appliance story to end users."

Gale is alluding to comments from both Sun and Compaq about the importance of cacheing technologies and internet appliances. Back in May this year, Sun's president, Ed Zander, said: "I am more worried about firms such as Cobalt and Network Appliance than I am about Microsoft."

This is an interesting comment to make about two companies many IT folks will probably never even have heard of. But now Sun owns one of them and has left NA to battle it out alone.

And Zander sees the Cobalt purchase as extremely important. "We're acquiring Cobalt to establish ourselves in low-end server appliances and immediately jump into the marketplace with a proven, world-class product offering," he said.

"This move is similar to our entry into the high-end server arena, which we did through our acquisition of Starfire server technology from Cray. Just as that product line has become one of our most successful product lines to date, we think the demand for these high-volume, turnkey devices will explode in the next couple of years. Cobalt is our bet for the future," he added.

Under attack
But while Sun is going after NA's cacheing business, Compaq is attacking its other major growth business - networked attached storage (NAS) devices, a market that is predicted to hit $6.5bn over the next few years.

After launching its TaskSmart appliance, Compaq has started bullishly claiming that it will become the market leader in this space in just 12 months.

But to make matters worse for NA, even the traditional data storage companies now want a slice of the pie. "We are going to take the NAS leadership away from Network Appliance. Period," said Joe Tucci, president and chief operating officer of EMC.

So why are the big boys targeting NA? To some extent, the impact of the internet on traditional computing models is forcing major change. Companies are having to deploy web server farms to act as a front end to back-room systems. But the coming together of these two different computing models is placing a strain on the networking fabric that links these IT systems together.

Server-based storage is a slightly more simplistic version of bolt-in and go technology. You want more storage? Buy a NAS device and bolt it onto the network infrastructure.

And while internet service providers (ISPs) have turned to this technology over the last 12 to 18 months to help them manage their incredible growth, it's now the turn of corporate IT sites to buy into it.

A seductive idea
As for cacheing appliances, ISPs have used them heavily too, but the promise of being able to move content quickly around an organisation - be it data from traditional business applications or new economy web-based data - is indeed seductive to corporate IT too.

In an ever more complex world, the ability to deliver content across the enterprise and out to an organisation's partners is likely to help ease the pressure on the networking infrastructure.

And as a result, Sun, EMC and Compaq are all after blood. NA obviously did something right when it elected to bet its future on server-based appliances. But to have the attention of such rivals focused on it must be somewhat daunting.

"In this distributed computing world, being the winner is all about who can hand out the tools to help put the data where it best suits the customer," said Gale. "This is what we do well, and sure, we have some big competitors. So I guess we'll just have to keep doing it well."