 No, I showed up this morning talk talk to some customers customers. I talked to you so far ecstatic So that's all I mean, you know, there's always both kinds. I asked I Asked the first customer. So if you had a magic wand that you could wave to change anything about net app What would you change? And he was like, I Can't think of anything. I'm like come on. You know, I'm really lower prices something working It's not shiny enough green light. So the fortunately the sales guy who was with us had a had a list of things like Yeah, you're You're blanking out now, but let me remind you about the stuff you beat me up It's actually a pretty good conversation. You love increased prices. No one's ever said that before No, there's actually increased prices Very early on It's funny when we were a very small startup We actually had a couple customers tell us to increase our prices and well Their logic was they said we like you guys and we don't think you're pricing to stay in business And so we when we look at both what we think it's going to take for you to do like you're teeny You're not doing support right yet. You're not doing you know, raise your prices Handle some of these other issues. We like your technology. How about you stay a mouse 15 years ago? But I thought that I learned a lot from interacting with customers like that because a customer that's telling you to raise your prices Because they want you to stay in business. That's a pretty savvy customer. Yeah, it's not a customer. That's a partner Okay Dave a lot is on a plane. He's on a plane He loves to tell the net app story where you guys were in your off-site planning meeting and When you guys came to the point is I can we can do a billion dollars He loves to tell that story because it's the classic Silicon Valley story. You think hey, we're growing so fast Last time between engineering and sales. I mean my model for sales was hey We doubled last year if we just keep doubling every year for five years. We'll hit a billion dollars And Tom Mendoza who was the head of sales at that time He's like this is but you can't just do that and I said sure I can look it's actually 1.3 billion dollars But we did I mean we did and then we hit a billion long about late 2000 and I don't know there was this tech crash thing So you're the co-founder of net adder. It's a big success story in Silicon Valley and a big successful company here He's of a monster booth is doing great financially What's it like now for you? I mean you're in the company you're actively involved You wrote a book recently about entrepreneurship and start a process how to cast rate a bowl We might as well plug the book how to cast rate a bowl. Is it on the Kindle and Amazon and Yeah, okay, go get it how to cast rate a bowl can't forget that title Talk about talk about to just your personal experiences right now Where you are in the company and then so first of all, I mean it's just been weird being the founder of a company that's so successful People often do ask me what does that feel like and you know like you look at these buildings You created all of this the best analogy I've been able to come up with is like if you plant a seed and an oak tree grows You can come back ten years later and you see there's an oak tree But if someone says how does it feel to have created this oak tree? It's like well good But but you planted a seed like a lot of other magic happened, you know what I mean It's not Just because you planted the seed doesn't mean you get all the credit It's sort of a group effort where was your experience in terms of the inflection point We you personally looked at yourself and said wow, we're gonna actually make it was it at the beginning It was an early stage, but you know, there's it's been a series of inflection points the early inflection points were So we were doing storage for the ethernet originally it was just ethernet storage and and the thing and we started in 91 So we actually incorporated in 92. There was no internet then. I mean that was the internet officially But there was no web there wasn't you know the whole web thing. I think when did Netscape ship 90 94 95 So we started three years before that when that stuff started to kick in Everybody in the world was trying to leverage ethernet for everything they could Yeah, and that really when we started getting customers like the early ones were we're earth link mind spring AOL Like those kind of guys Amazon was actually an early customer that that was like this But so that was the first inflection point was really riding the dot-com curve after the crash. I Was problematic. I mean because most of our customers had been tech or internet. Yeah The the next transition was enterprise, you know, how do we just go be a grown-up company dealing with grown-up customers and like You know a big boy and I would say the most recent inflection point and it's the one we're largely ends all about VMware I mean when people start to look at VMware, they think differently about how this storage infrastructure should fit that We I can't tell you the customer name. Unfortunately. We had an enormous company Who had named emcee the their vendor of the year the previous year switched to net app Not because they were unhappy in any way with the emcee, but because as they rolled out VMware They believed we were a better foundation for that environment When you look I mean net app has been growing like gangbusters For the past couple of years and I have to say I think one of the key drivers for that is VMware So we had Tom George's on at the cube at VM world which is to me a very ground-baking show He's our new CEO. He's been CEO for just over a year. He was great And we asked all the CEOs Joe Tucci the same question is storage sexy and or is it hot? He goes and he said I love it. I don't care if it's hot or sexy as long as it's profitable And he's just so candid and but he was really good. He nailed. Hey, let me give you my answer I think storage is like plumbing Right, you're gonna build a house. Nobody looks first at the plumbing But you go in that house if the plumbing is not working right It's not very long before you're extremely unhappy very unhappy and it's but no I mean this what's sexy the sexy thing is the app that puts this Solves the business problem in front of your cold water. Yes clean cold water coming through the point But we if net app was a Hollywood actor, we could never aspire to be the best the leading man We have to be the best supporting actor. Yeah, that's you know, so but yeah, but as Tom says that that's a profitable business the other thing he talked about was pivot pivoting off of Moritz piece about Virtual machine shipping more than physical units and the impact of what that's going to do with the software Because you know storage was hard with hardware, but there's a lot of software in there Tell us about some insights that you see happening or with vmware environments with software What's the innovation angle there is there so here's one of my observations about vmware I talked to really smart tech guys like you know the engineering nerds and they say Boy, if you've got an environment like vmware where everything is virtualized you could build a completely different model of computing I mean nodes could communicate like this. They wouldn't have to use TCP. They could everything could be shared That's not what's happening. If you look what's happening people are actually Reconstructing all of the environment of their physical data center, but they're doing it virtually I mean you look at vmware there they're starting to develop encapsulation of different things and we can move these groups of systems And it's not like people are migrating to all direct memory access. It's still TCP IP. Why is that? the reason is if you look at the infrastructure required to run a data center some of it's about Chips and OSes a lot of it is about the processes how you actually make this stuff fit together the rule book You've put together to run it the stuff that you've got thousands of IT people trained up to do And so you end up with Cisco doing things like putting virtual routers into vmware Is that the most efficient way to move bytes back and forth? No, but it matches the process You set up is that a legacy issue or is there going to be a force that's going to come around the corner and hit us Because there's always a that disruptive one big bullet that gets In that context talk about talk about performance and in particularly performance and storage and what you're doing to So, you know, there's these trends all of I I have to say I think server virtualization It's not just vmware if you look at things like Oracle's rack or hyper v Microsoft's hyper vme, but any of that stuff Sun's got a lot of those capabilities or I guess Oracle now and in there But all of the the flavors of virtualization that is the single biggest Change to hit IT in a long time and if you look at the savings people get and that's going to be 10 years before we Fully understand it and but but I want to switch to storage. I am a storage guy I think that one of the most interesting trends right now in storage from a cost perspective Is taking flash so flash is the expensive Memory that goes in SSDs. Everybody knows it beautifully fast, but horribly expensive combine it with SATA drives Which are the cheap ass drives, right? Combine those together and use it to make something that's about the same speed as you got now But half the price I think if you look over the next five years flash plus data is basically going to eliminate Fiber channel and and said the 15,000 RPM enterprise class drives Is it a cashing layer that it provides is that the solids taking me know because it's half the price Just a pure economic boom and what's the impact on power? What's the impact on space? It's you know if you look at interesting if you is so we've seen this before actually if you if you look back 20 years Everybody 20 years ago. They had almost 30 years some of it IBM DASD drives remember these drives the size of a washing machine spinning around 14 I mean the early ones were bigger than that and they were spinning around There was this little company came along and they said let's take cheap Unix drives the scuzzy workstation drives. Let's put a layer of memory on it was a memory company Let's put some raid in and That company in a five-year period went from less than 10 percent market share to over 50 It's EMC by the way that it's the exact same these things you don't get to choose them You know these technology trends kind of come when they come back then it was the the scuzzy drive and the invention of raid now It's it's the SATA drive and flash memory combining So so to me as a vendor we can ride that curve But as a customer you can either choose to be on this the old expensive stuff for the new cheap fast stuff So in that case it changed leadership positions. Is it gonna change leadership positions this time? Or is it or is everybody gonna have it? Certainly everyone recognizes that flash is awesome. Yeah, and a lot of people are starting to recognize that say it is awesome. I don't think It's not fair at all to say net apps the only company that spotted this trend on the other hand I think we have a big lead we spotted ten years ago the trend that you could use SATA drives or ATA drives They were originally that you could use them for tape Replacement in the nearest or product the nearest or product and and that early on was an odd bet to a lot of people And that's kind of the way the industry's gone. So what's the point? We've been shipping these kind of drives for ten years now. We know how to do it We're shipping more SATA drives than any other enterprise storage system vendor Hey, I mean on the cost side I mean so that's one element but cost is not doesn't always equate to value is there at a point where? Is it there's a tipping point where you got to say real value? So here's where the value happens? Suppose just hypothetically that you would like to build a shared storage infrastructure to go under a virtualized server environment So one of the big challenges you have is you've got all of these different applications And they've got different requirements. Some of them need super high performance. Some of them lower performance is okay Some of them they've got different availability requirements. So here you want to build this this storage infrastructure How do you build a single infrastructure that serves all these different needs? I mean and you could say well Well, let's have a bunch of different tiers and we'll migrate stuff back and forth and we'll try and manage that whole thing and certainly All of the storage vendors have gone down that but wouldn't it be cool if you add a technology where you could say if you Want to cheaper use more of the SATA if you wanted faster use more of the flash and by the way you can tune this back And forth dynamically with man it'll it'll tune automatically if you wanted to if you want to specifically say You know Joe's no good. Don't let him. So that's where we're headed where it's all dynamic and automated You don't that will there still be certain silos where you want a hundred percent pure SSDs or a hundred percent There'll be some zones But if you can make most of it be dynamically tuning automated you've changed this from an economics argument to what's the right way Flexibly to build a shared storage infrastructure. I think that's game-changing. Yeah. Yeah, I mean I don't I was just having a Someone I stand for in a computer science department The big debate going on right now is do you scale out or do you scale up and then both and and how do you both? I mean scaling out that's more of a Facebook kind of issue, but there's distributed calls. There's some issues here, right? Scaling up is throwing money at it, but more complexity there How how do people think about just to make sure we've got the definitions right scaling out a lot of people mean It's just more and more and more small systems like build everything out of PCs and scaling up is like just build honking systems I'll put it everywhere and not worry about partitions. We're about calls distributed calls So I'm trying to find one piece of data to fit on multiple places Kind of like all the Facebook paradigm just right dump blobs out there and then scaling up is you know all that the current storage you guys EMC And no one's perfected this distributed model yet because of that round trip times all kinds of issues, right? So that's what people are thinking about right now. You have different requirements and you're going to need both So we were talking before about how long does it take for data center transitions to occur, right? I mean people still run mainframes that right these things take years ago There there are a lot of apps that aren't going to be retuned any time soon to be Widely parallelized and because of those apps you're going to need very Scaled up storage systems to accommodate them. That said there's a lot of other apps We've started doing business early on with Yahoo, you know for things like their their email and a lot of their individual customer data They call it refrigerator magnet data And the reason they call it that is because this is like a picture that you took of your kid and you want Grandma to be able to see it if you didn't have a digital copy the place you'd put it was on your refrigerator Yeah, so it's all this refrigerator magnet data and the access pattern of that is look at once and then never again But maybe right I mean so you just you can't the same architecture is not going to do both you need to you need to for that scale out at scale, I mean This way a scale breadth as opposed to up is going to be the right model So question to where to have so where to have right now the seasoned Net app executive been through the ringer a lot of scar tissue brought a company planted a seed to an innovator a guy Who's now a startup you're on it on just say you're in the trenches You're spinning up a new startup. What what do you say to the folks out there that are out there trying to figure out the future and innovate? What should they be looking at? What's your advice to them because a lot of entrepreneurs are trying to kick this private Here is my advice my advice is I spent a year writing a book that captured all Read how to get a nice job That for me I think the most influential book on business thinking maybe that the pair of them is Jeffrey Moore Crossing the chasm inside the tornado and crossing the chasm those two and Clayton Christiansen the innovators dilemma and The key message of the innovators dilemma to me is don't start your company to go head-to-head with exactly the same thing Some big guys doing yeah like oracle. That's just not no Why would you want it not anybody figure out some little niche? Which is different than what they're doing that over time can potentially grow in man Well, we started we were doing storage over ethernet at a time when everyone believed ethernet sucked and that no one in their Right mind would put anything valuable on it and that was not a bad little niche Programmers people using Sunworks You had a position in the marketplace you can get customers and then we were Enormously lucky which is the internet hit and everybody said well, let's rethink this ethernet thing Maybe we should put valuable data on it, but you can't plan that so but I mean head-to-head with the giant guys sell