But now that my apps are no longer tied to hardware, I can move them from server to server for load balancing, or data center to data center for disaster recovery, so I can think about my infrastructure independent of my apps.
So I can build a very homogeneous, very highly automated, very efficient infrastructure that's application-dependent, and I can run many, many apps on it with a set of tools that automate all that. That's my definition of the private cloud. And there's no doubt that companies are moving to that model for on-premise computing, outside of very specific dedicated applications, simply because of the flexibility and the cost. But that said, if you own infrastructure you'll never match the flexibility of being able to turn on 1,000 servers and then turn them off a month later like you can with an Amazon.
NW: This idea of pooled resources started with storage before it even emerged with servers, but then seemed to stall a bit. How would you classify where we stand today?
TG: I don't think it's stalled. In fact, it's our big bet. You've got dedicated infrastructures around a handful of apps, and the rest is being pooled for the flexibility and the economics and the commonality. So clearly the trend is towards a virtualized private cloud.
From NetApp's point of view, when virtualization came out there was this Wall Street sentiment that virtualization was bad for us because the conversation was going to be dominated by server vendors. What they didn't realize was that virtualization, and ultimately its enablement of the private cloud, had big implications for storage. The simplest rational was that if people were going to build a common infrastructure across many apps that's highly efficient, highly automated and highly homogeneous, they wouldn't want five or six different storage products because that would basically return them to islands of infrastructure.
So our view, and how we grew from effectively a standing start to the number two storage provider in the world, is that we have a common architecture that spans these business applications. We can come to a customer that is making a big virtualization push and say, "We've got one single architecture that is also highly efficient, highly automated, that you can put behind your virtualized infrastructure."
So when the world was relatively negative about the impact of virtualization on NetApp (it was certainly reflected in our stock price at the time), our internal mantra was, we want to be the unquestioned technology leader in storage for virtualized infrastructures, and we came out of that last downturn and grew 30% the next year and 25% the year after that.
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