 Good morning. I'm Kristen Filetti and welcome to News Desk on SiliconANGLE TV for Tuesday, June 11, 2013. NetApp's new version of their flagship storage OS, Clustered Data on Tap, has been announced today. Join us now to provide details on what this new software can do as SiliconANGLE founder, John Furrier. Good morning, John. Good to have you back. Good to be here. Thanks for having me. So NetApp has introduced a new storage operating system, Clustered on Tap, as their main innovation for their existing and future customers. So John, what's so important about this announcement? Let's start with that. Well, I think it's important because all the big competition, IBM and HP, are all having a big show here this week in Las Vegas, where I'm at right now. But fundamentally, the bigger trend is that the cloud and Amazon has shown the way for kind of a new way to do things for businesses and information technology. And with cloud infrastructure and, say, big data, the tsunami of data that's being generated by mobile devices, and you're seeing things with the NSA prison, big data is being used for a lot of things, including surveillance, as well as business value, is creating a massive innovation boom. And this is creating a lot of wealth opportunities, and quite frankly, refactoring the market. So the marketplace of big companies supplying IT, technology, computing, storage, and networking is under massive reconstruction. It's reforming in real time, and it's happening on an accelerated basis. So this is an opportunity for companies to change their leadership position and take new territory or get new leadership position in their products. And what NetApp is introducing today is fundamentally a shift to this new model of software-driven enterprises, software-led infrastructure. And the cluster on tap is a huge announcement for NetApp in the sense that it's going to be the fundamental platform or operating system for all of their storage devices, which literally has been installed in the thousands and thousands of corporate enterprises, large scale enterprises, medium-sized enterprises. And NetApp has been a very, very successful storage company, but yet is still smaller than, say, EMC, IBM, and HP relative to their sizes of company. So this shift to this new operating system is a major platform upgrade and change for NetApp, which gives them the ability to kind of hold down their install base customer base as well as get new customers. So it's a significant announcement for NetApp in the sense that they are betting the company on this approach. Will software-defined storage be the preferred architecture? And the answer from our standpoint is yes, because that is where everyone's going. I think Amazon and Cloud, in particular, and big data tsunami that's happening is really driving that trend. So this is a really big deal for NetApp and their customers. So, John, why is NetApp introducing this cluster on tap? And what sort of trends are you seeing in the software-defined storage market? You know, NetApp is introducing some compelling software that they've been working on for many years that's going to modernize their customer base as well as bring them new business in the area of software-defined storage. And this is kind of really kind of points to the big trend of what Cloud has done, Amazon and OpenStack and other environments, plus big data has driven a major transformation for large enterprises. And the key thing, as I pointed out on my blog post today on Forbes, is that any time there's a market reformation, there's always opportunities for new leadership positions. And NetApp is definitely taking advantage of that. And they've always been a great software-driven storage company of thousands and thousands of clients using their storage platform. And now they're essentially upgrading and modernizing their infrastructure with new software operating system. And really what it is, is that CIOs and large businesses are reinvesting in their infrastructure to essentially modernize their capabilities to deliver Cloud capabilities as well as big data and mobile, et cetera. So all the things that are happening with Apple, iOS, Cloud and big data really points to the trends. And we saw that recently with the NSA prism thing, where we're seeing big data applications being used for surveillance, but more importantly, is they're being used for business use. NetApp is realizing that they don't have a clustered software environment that they really will lose share. And this is a major step in the company's direction to do that. And these are opportunities. And Cloud is creating new economics, and that's really the opportunity for NetApp. Tell us what software-defined storage is. And why are all these storage companies introducing the concept of SDS? Software-defined storage basically means that new software is being written with virtualization and new technology to take storage from a place to store data to a place where you can store data and use it very, very fast and using it in a way that allows for scale. And NetApp, in particular, as well as all the other storage vendors, IBM, EMC, HP, and others, the focus is on what they call scale-out storage, meaning to handle all the new cloud technologies and the big data that's happening with mobile. You need massive amounts of more storage. So storage is continuing to grow, the drives and the systems that store all the data. However, getting the data out and making it usable, say on an iPhone or an Android phone, is really the focus. And that takes new software paradigms, and that's really what the hype's all about. The reality is that companies that don't offer software for developers to use will not be around much longer. So what NetApp is essentially doing is recognizing this transformation for essentially businesses, the chief information officer in these large companies, to take their storage, which is still growing and not stopping, and putting a software layer on top of it so that people can write new software, write new apps. And these apps is what people are focusing on. I heard Mark talking about the iOS kill switch, things around finding the device, being more agile and faster to write code. And this is really kind of where the tsunami is happening. Certainly on the consumer side, Android and iPhone is showing the way for these new applications. But these large companies where people work, it's just not that robust, but you're seeing more like an Android, iPhone environment for corporations. This is actually leading to new opportunities for people to drive more business. So massive innovation boom for these large enterprises to provide new apps and new technologies. And with cloud, like an Amazon-like environment, and with software, companies like NetApp can actually provide an infrastructure that actually does that. So software is the key to success. We're seeing it on the consumer side and on the business side, you're seeing this massive transformation. So that kind of software layer allows for all kinds of new possibilities. So with NetApp, they have thousands of customers, so they have to kind of maintain that and support that as well as be positioned for a new headroom and new capabilities so people can grow in the future. In this new modern era of storage, what is it that customers are seeking and looking for? Well, I think one thing is that you're seeing data as the new currency. Someone was saying it's the new natural resource. Data exhausts is a term that people use. And with the NSA news recently around the surveillance, you're seeing data is being used in a variety of different ways. So one thing that's clear is data is forever. The other thing is that you're seeing is people are used to services, really fast new capabilities. No one wants to have a phone or a computer where it's just slow bloated. And people are recognizing that with phones in particular, mobile phones, that's the first environment. That's the first screen people are using now. It's not the other way around. It used to be the desktop computer or the laptop first and then phone second. That's actually reversing the trend and you're seeing people use their phone connecting to other systems. So that's the user experience. On the business side, people are actually using phones and tablets and cloud to actually do work. So the people who actually have to create value businesses have to have this environment. This is a modern era that's really, really exploding. So you're seeing that service level and ultimately storage still needs to be around to be stored. So NetApp is not going anywhere. EMC, HP, IBM, we're all retruing their technologies to be software driven and software led. So that will enable new applications. And this is a massive transformation in businesses. So anyone who's been in the workforce since the 80s has seen this transition. Certainly people entering the workforce now want an environment where they're not locked down and chained to a desk. They want to use their phone wherever they are on a mobile capability. And also they want real time capability. They want the ability to access data. That is fundamentally changing the game. So how does NetApp compare to their competitors? Well, NetApp is interesting, right? I mean, there's a Silicon Valley company that's done extremely well. I wrote a post about this. They have a 20 year history of innovation. They've always been kind of a leader, but they're smaller than say EMC. EMC's got a lot more capability and investment behind it and marketing dollars. EMC, HP, and IBM all have big presence. And I think NetApp's focus here is to use software as a way to continue to innovate. Although smaller than the other guys, NetApp has thousands and thousands of customers. But you're seeing NetApp really trying to compete with EMC, HP, and IBM, as well as the slew of other startups that are coming out of Silicon Valley and around the world. So the storage paradigm is absolutely changing. And there's two things that are happening. One is more storage is being purchased to store data. At the same time it's being commoditized, meaning people don't want to deal with stuff that's stored on device. They don't care where it's stored. They just want the data. So NetApp has a good story there because they can now offer that software. So again, this comes back down to, I don't care where it's stored, I just want to use the data. And that's where NetApp is trying to be competitive. And they have a tough road ahead of them, but ultimately this is a major announcement for them and we'll give them a chance to compete and aggressively take new territory. Again, when the marketplace is refactoring and reforming, all the chips are on the table to use my Vegas analogy. And the opportunity is who can play the right hand here and win that. And NetApp thinks they can move the ball down the field and have a good approach here. Well, John, we don't have much time left, but quickly before you go, do you see software defined storage by NetApp impacting their business model and their financial performance? Absolutely. In fact, that's one of the reasons why I posted on Forbes today because it's much more of a business site. We have posts on SiliconANGLE as well, given more of the detail analysis. And Wikibon has the deep dive on the technical side, but here's the bottom line for NetApp. They have thousands and thousands of customers and a lot of their customers are looking at alternatives like open source commodity hardware and that is a major force to their business model and potentially has ramifications on the financial side. So they have an installed base of customers as well as new customers, the next Pinterest, the next Facebook want to buy drives, these new companies. So for them, this is a significant stake in the ground and allow them to maintain their existing business, provide those new capabilities of cloud and big data at the same time, offer that scale out capability to attract new customers. So my take on this is it's gonna be upshot for their financials and ultimately their business. So we'll see how they roll that out, but ultimately this puts them in a good position to continue on the financial side, which so I think it's good news for the stock price and certainly their business prospects. Well, John, thanks so much for sharing your insight with us this morning. Great to see you again. Thanks. And later this morning on Newsdesk, LG introduces a game service to its TVs and is Gorilla Glass coming to your automobile. But up next, SiliconANGLE founding editor, Mark Risen Hopkins shares an exclusive interview with us regarding software defined storage and the net up announcement.