In a sea of data management competition, Network Appliance seeks to upgrade its profile among consumers and the media as it completes its evolution into a thriving market leader
Network Appliance (NetApp) thrives between a rock and a hard place.
On one side, the data management company faces much larger, much-better-known competitors, including IBM, Hewlett-Packard, and EMC, who dominate the market. On the other end, the company faces dozens of start-ups nipping at its heels.
And as NetApp evolves from a data storage company into a data management company - and there is a world of difference between the two, particularly to the technology trade outlets and IT managers - the company is leveraging PR to be seen beyond the small hardware company it once was.
"PR has been our primary mechanism to get visibility in the marketplace," says CEO Dan Warmenhoven. "It's very important to getting our name out there and educating the market to who we are and what we do. It's much more credible than advertising. It carries more weight in the customer's mind than us blowing our own horn."
While EMC dominates the network-storage market, with 29% market share, followed by HP at 23.7% and IBM at 11.2%, NetApp has shown some of the greatest revenue growth, according to a March study from IDC. In the network storage market, which grew 11.6% in Q4 2005 over Q4 2004, NetApp led all competitors with 29.7% revenue growth.
But NetApp is determined to show that there is more to the company than the storage "box" it developed when it opened 13 years ago.
"The 'Evolution of Storage' is our tagline," says Eric Brown, director of worldwide PR, at the Sunnyvale, CA-based company. "We want to be seen as a more strategic asset to companies. When you think of storage, you think of a box. It's not very exciting. So we want people to think of something more sophisticated when they think of us."
Part of that has been driven by companies' changing data storage and management needs. But it also reflects the changing hierarchy at companies and who wields the buying power. While IT managers ultimately implement and use this technology, it's the CIO who needs to sign off on it. And for that audience, it's not about a box. It's about the value NetApp brings to its customers.
Customer testimonials is one area where the company has excelled, says Brian Fonseca, senior writer with eWeek. NetApp is very good about getting customers to talk about how its technology benefits their companies.
"Their customers love them," adds Joe Clabby, practice director with analyst firm Summit Strategies. "One thing you can do to lose market share is to piss off your customers. But they have a great relationship with their customers, who are willing to talk on their behalf."
The two messages Brown wants potential customers and partners, and the market at large, to hear are about innovation and experience. With titans like EMC and HP on one side - who can talk about partnerships and large customer wins that are more difficult for NetApp to command - the company positions itself as a cutting-edge technology innovator that is much more nimble and flexible than its larger rivals.
But when faced with competition from start-ups that talk more about ideas and strategies than follow-through, the $1.5 billion company presents itself as a proven technological leader with a strong track record and customer and partner references that those start-ups can only dream about.
And it's a delicate balancing act, one that the company pursues through a multi-tiered strategy.
NetApp has elevated its level of messaging, away from a purely technical one, so that company executives can talk about business issues that impact the data management and storage market and its customers, says Jodi Baumann, senior manager of corporate and financial PR. Thought leadership initiatives help highlight the longstanding senior management team, she adds. Such programs are vital to NetApp, as deep IT discussions about technologies with acronyms, such as iSCSI, SAN, and NAS - while vitally important business segments to NetApp and other data management firms - are prone to make business reporters' eyes glaze over.
"It's hard to get the business media involved sometimes," says Baumann. "So having our executives accessible to talk about where the industry is going and other business issues is important."
It's that executive access that helps NetApp secure the attendance of journalists from Business Week, The Wall Street Journal, Financial Times, and other top-tier business media at its annual CEO dinner.
"One of the biggest challenges is that they are a data management company," adds Dave Black, director and co-founder of Voce Communications, NetApp's US agency for the past five years. "The business press wants to talk about podcasting." A big piece of the company's success has been making the executives more accessible, talking about data not in esoteric terms, but as everything from MP3s to e-mail.
"They are very active, and very sharp," says Black of the executives. "The best PR person is only as successful as their spokesperson."
Not that it's ignoring iSCSI and other innovative technologies. In order to get ahead of the competition, the company highlights its work on cutting-edge technology, says Katryn McGaughey, product PR program manager.
ISCSI enables users to use ethernet [an internet protocol] to achieve a high-level of data storage at a low cost. Many pundits predicted that iSCSI would end up in the data storage garbage heap like many other storage technologies before it. But NetApp, working with Voce, had faith and set out to educate the market. NetApp allowed current customers to download the new technology for free and then used customer testimonials to generate more support and media attention for a technology many were ready to turn their backs on.
The educational campaign, coupled with customer testimonials and executive thought leadership on data-storage market developments, worked. Now NetApp dominates that market segment, with 38.9% over EMC's 25.6%, according to IDC. The iSCSI market grew beyond $100 million in 2004.
Reconsidering the news
This is the kind of news the company tries to focus on these days, as it has reconsidered what it thinks of as "news." The PR team has had to fight pressure to churn out releases that have no real media appeal and only serve niche audiences. And while those releases still appear from time to time, Brown has fought to make sure the team's time is better spent focusing on real news, such as acquisitions, product developments, new partnerships, and key studies.
And despite Brown pushing back against news releases for the sake of news releases, it has not hurt his team's reputation within the company. If anything, it has garnered more respect.
"Eric and his team are involved in every external activity," says Warmenhoven. "We believe in a consistent and constant use of PR."
And Brown points to his budget staying steady over the past four years, even during the tech downturn.
"I always tell people, 'Executives vote with dollars,'" says Brown. "The fact that our budget has never been cut says that they care about PR."
The steady PR budget - which Brown says is a low seven-figure budget - enables the four-person team to develop numerous programs, including assertive executive commentary on IT and business issues, an awards program that recognizes customers' outstanding achievements, a corporate blog, and an effort to get executives out beyond the business and technology worlds into public policy, where they discuss issues impacting the business community.
"They're very good at staying on top of trends," says Fonseca. "They have a good take on what is going on in the market. If EMC or another competitor does something, I can expect a phone call. It can be a bit of business-speak, but what they have to say usually has some real meat to it."
Hundreds of companies have tried to take on market leader EMC and failed, says Black. This is a David and Goliath story, where David, despite still being pretty small in comparison to Goliath, has made some serious offensive moves and has let it be known he's a force to be reckoned with.
"You have to look at the success of what [NetApp] has done," says Black. "They aren't the underdog anymore."
Director of worldwide PR Eric Brown
Senior manager of corporate and financial PR Jodi Baumann
Partners PR, program manager Katryn McGaughey
Product PR manager Jaime Leigh Le
PR agency Voce Communications