Network Appliance Eyes E-Gov Venues

By Jennifer Freer, Staff WriterNetwork Appliance Inc., a data storage and data management company, launched a federal unit Oct. 23 to chase growing e-government opportunities, such as reducing network management time, increasing bandwidth capacity and helping recover lost data.The Sunnyvale, Calif.-based company has been working with the government since its creation in 1992, but the new subsidiary, Network Appliance Federal Systems Inc., will expand the focus on federal customers, company officials said."The market for data storage in government has exploded and e-government has helped push the business forward," said Jay Chabrow, general manager for Network Appliance Federal Systems. The company will establish U.S. operations for the government group in three locations: Washington, Denver and San Jose, Calif. The company also plans to expand internationally in Europe and the Pacific Rim in 2001. The rapidly growing company expects to almost double its revenue in 2001. Network Appliance went public in 1995 and had revenue of $579 million with net earnings of $74 million in fiscal 2000, which ended in April. The federal business is one-third of the company's total revenue, bringing in about $193 million. Officials expect 2001 revenue to top $1 billion.E-government requirements, such as accessing large amounts of data content and increasing bandwidth, have made the government more aware of the need for storing data, and it is ready to step up its investment and commitment, Chabrow said. Network Appliance will help federal agencies build e-business models that will streamline information management operations and reduce IT costs, he said.The cost for purchasing Network Appliance's data storage solutions depends on how much data storage is needed, but ranges from $30,000 to $1 million, Chabrow said.Government customers include the Army, the Internal Revenue Service, the National Institutes of Health, the U.S. Geological Survey, the departments of Labor, Justice and Treasury, and others. Network Appliance also works with state and local government customers and is preparing to fold the state and local business into the new Federal Systems company next year, Chabrow said. Network Appliance's competitors include EMC Corp., Cisco Systems Inc., Inktomi Corp. and CacheFlow Inc.Network Appliance has taken the old mainframe computers that filled rooms and rooms with data storage equipment, and turned that concept into a separate storage solution that puts all the data on a 19-inch storage box. Network Appliance's solution can hold up to 12 terabytes of information, equaling 120,000 computers on one system, said Howie Wilcox, chief architect for Network Appliance Federal.In the past, one computer consisted of routers, switches, storage hardware and software and performed all tasks. Now the trend is for companies to provide just equipment, such as computers or switches, or just a solution, such as network management or design, as a specialized product or service that performs a single function. Data storage is another service added to the list of separate functions, Wilcox said."Data is growing at enormous rates of speed," said Jon Toigo, author of "The Holy Grail of Data Storage Management," a contributing writer to Washington Technology and an independent technology consultant in Tampa Bay, Fla. "The need for storage is growing about 80 percent a year in government, which is not unusual and consistent with industry as a whole." Network Appliance provides a good data storage solution because it allows agencies to use existing equipment with its open platform instead of starting from scratch, said Sam Chung, a systems engineer consultant for the Army's Personnel Program. In addition, Network Appliance's solutions provide more space on the servers and help with data recovery without having the whole computer system go down to retrieve lost information. The company plans to continue pursuing new government customers by developing key partners and working with government resellers, Chabrow said. It also plans to participate in government contracts. Network Appliance's services now are available through the General Services Administration's schedule and a few other contracts.Network Appliance is participating on a number of large federal IT contracts, including the $10 billion Navy/Marine Corps Intranet contract with Electronic Data Systems Corp. of Plano, Texas.