Thomas Kayser, NetApp: The largest change in our strategy - focus on cloud computing

Thomas Kayser: Still just 4-5 years ago NetApp was perceived mainly as the producer of hardware-software solutions. Now our company moves towards positioning of as software vendor and provider of cloud solutions more and more. It is one of key changes of the last 2-3 years - to propose to our clients more and more software solutions for transition to clouds.

When in our line solutions and services within the technology concept of Netapp Data Fabric appeared, it became for us a starting point of development of cloud business. Since then at the company appeared many products meeting customer needs in junction region on cloud computing.

What is also important - NetApp adjusted good partnership, agreements with the largest world providers of cloud and hybrid services, such as Google Microsoft Azure Amazon. Integration of our solutions into their offers is very big already now. One and a half years ago we in USA together with partners began to offer service of cloud storages which the customer can receive in one click. And in September or October we start similar service and in Europe.

One of steps towards development of cloud business was acquisition of the Icelandic company Greenqloud which we made last year and mutually integrated our products to offer customers and cloud providers new services based on technologies of cloud management of corporate scale.

Business development in this direction was reflected also in structure of our company: if earlier we had one business divisions, then their three now. One business division is focused on upgrade of the data centers constructed both based on our solutions and based on the solution of our competitors. The second business division is engaged in the data centers of the future including the hyper convergent systems and use of cloud services.

The third division - Cloud Data Services (cloud services for work with data and analytics), it is engaged also in cloud services of storage and data management which are provided through giperskeyler. This direction occupies a small share in business so far, but is the most strategic.

Thomas Kayser: Focus on cloud computing - perhaps, it the largest change in business strategy, however, it does not mean at all that we do not develop other, our "classical" products in data storage area any more. We adapt systems which already earned good reputation from the market for their use together with cloud computing. For our clients important that the same systems which they use could work in a cloud environment, in different cloud environments from different providers. And here without exaggeration I would note that NetApp - the only solution provider for data storage in the world who can provide such opportunity at the moment.

Thomas Kayser: We think of bringing such services and to Russia. And here to organize providing these services it seems to us more reasonable in partnership with the local companies - cloud providers. However, we have no specific arrangements yet.

I think that the Russian clients are ready to such offer, to building the IT infrastructure using cloud services. For example, recently we discussed similar services with our many local customers, and they show interest and readiness. In my opinion, and the current Russian legislation allows to organize such services in many industries.

Thomas Kayser: I would not begin to make a start from the industries in questions of demand though, probably, the public sector will begin to use similar services in the last queue. But for all others, including the telecom companies, retail, finance, is not present explicit barriers to transition to cloud services of data management.

Of course, it is, first of all, about internal cloud projects - creation of own corporate clouds. Provide a possibility of creation of such clouds is also our task. Our offer in the field of cloud infrastructure includes the most various solutions using which customers can build the clouds.

Thomas Kayser: Such solutions already occupy an essential share in our revenue in Russia. Last year 47% of all new transactions of Netapp in Russia included all-flash of DWH. And in this segment our company, according to the research IDC, is number 1 in Russia.

I would call Russia one of the most active markets in demand for all-flash of DWH. The flash memory is a new level of data storage, the most modern technologies with a mass of advantages, and they are used for upgrade of data centers. I think that traditional DWH will leave the market in the next several years.

Our clients, including in Russia, understand advantages a flash technologies. Alignment in the price with traditional technologies of data storage become an important factor of increase in demand for them also.

Thomas Kayser: Growth of revenue of Netapp in Russia in 2017 financial year to year was 60% in a dollar equivalent. A flash technology were one of drivers of growth of business. But an opportunity to attract new clients was even more important driver: we came into contacts with many new corporate clients in Russia and started rather large projects which influenced our final growth.

The project in banking sector became the largest project in 2017 for us. We cannot read the name of this client, unfortunately, not all clients are ready to publicity. Also last year we in Russia had large deliveries in an oil and gas sector and a public sector.

Thomas Kayser: Proceeding from our last announcements, it will be our joint product with NVidia from area of the artificial intelligence (AI) of Netapp ONTAP AI. It is designed to accelerate and scale data transmission in a cloud and out of it, simplifying implementation of the systems of deep learning and helping customers to use artificial intelligence for increase in productivity of business.

Also one of our most priority directions - NetApp of HCI, the hyper convergent infrastructure solution of an enterprise scale. This offer is already available in Russia, but soon we around the world, including Russia, we announce the next generation of HCI. Here it is possible to carry also one of ours, to some extent the traditional products based on a flash - A800. And, of course, the offer of cloud services which I already mentioned. We work on that they appeared in Russia.

Thomas Kayser: I do not agree with such statement at all. If to speak about the countries of the region which I supervise, including Eastern Europe, Turkey and Southeast Europe there is no difference. Moreover, I do not see that demand in the Russian market was slower even in comparison with Austria from where I am. In my opinion, in all discussions the Russian customers want to discuss first of all new products that new well now. In the region which I supervise the Russian customers most quickly pass to a flash technology.

If, for example, to compare the Czech Republic to Russia on the level of readiness to accept new technologies, then in the Czech Republic, in my opinion, customers are much more conservative.

In addition, the Russian customers look on a step forward. On our last action NetApp in Moscow could be heard as customers discuss such practicians of software development as DevOps and technologies of containers. All this can be referred to the most advanced technologies. I think, from this point of view of Russia ahead of many countries.

In this respect it is possible to call especially active bank and a telecom of the industry which offer the end customers services on the basis of the latest technologies. It seems to me that even in Europe more traditional approaches in these industries, than in Russia are used so far.

Thomas Kayser: I would not tell that in Russia our strategy has some essential differences. As well as in other countries, here we adhere to model of partner sales. As well as in other countries, in Russia we are focused both on large corporate clients, and on customers of the commercial sector.

In Russia it is possible to refer to specifics that we rely on a number of distributors concerning import of our products to the country. But in general there is no difference.

Thomas Kayser: We have not so many new partners who are contributing significantly to sales growth. At the same time, new partners appear, and we help them to be transformed together with us, to be ready to sales of our new products, to motivate them.

Undoubtedly, we continue to look at opportunities of emergence in us of new partners, especially in the field of our new offer - cloud services.

It is essential to change the affiliate program we at the same time do not plan. At the same time, we regularly review our partner landscape that it remained relevant from the technology point of view, corresponded to our strategy and permanent transformation. Many partners, and not only in Russia, still perceive us as vendor of one type of products, and we use the efforts to change this perception.

Thomas Kayser: It is impossible to tell that local players are absolutely imperceptible in Russia. However it is not necessary to speak about any serious competition from their party too so far. In my opinion, from the technology point of view the Russian companies are rather strong, especially if to look only at hardware solutions for data storage, but not in that corporate segment on which NetApp is focused. At least, so far.

Perhaps, at change of normative, state regulation they will begin to represent for us more serious competition, we should be ready to it anyway.