NetApps' closed servers do the job

In Paris last week, Bill Gates couldn't resist taking a shot at Larry Ellison and network computers. Gates made Ellison's NCs seem, compared to Gates' Wintel PCs, a pretty dumb idea. Gates was again giving his "Digital Nervous System" speech ( at IDC's European IT Forum. Gates reminded us that Ellison began his NC crusade in Paris three years ago. And where is Ellison's NC today? Nowhere, Gates said. Windows PCs, not NCs, are still the low-cost, high-volume mainstream platform.

Oracle's Ray Lane later laughed Gates' remarks off as squabbling between Gates and Ellison -- squabbling that has little to do with what really goes on in the computer industry.

IDC (the research company on whose board I serve) estimates that PCs, which account for 96 per cent of Internet access devices today, will only account for 57 per cent by 2002, the rest being "network appliances". A network appliance is a network computer, although I admit that depends on what the meaning of the word "is" is.

This is no time for hardening of the categories.

Enter Network Appliance in Santa Clara, California. What do you think it makes? It calls itself NetApps, but it doesn't sell any network applications. It calls its products "appliances", but it doesn't make any dainty, easy-to-use things that compete with Wintel PCs. Of all things, its network appliances are heavy-duty storage servers.

OK, network appliances (or computers) should come in two kinds: clients and servers.

NetApps sees itself making servers that store data for Microsoft and Oracle software, to which they connect through Cisco networks. And, like Cisco's routers, NetApps servers don't run Windows, Unix or NetWare. NetApps servers are software that come wrapped in hardware.

NetApps sees trends in its favour. Disk capacity on networks is doubling every 18 months. LANs are now getting as fast as disk interconnections. And many small PC servers are being replaced by fewer, bigger servers.

NetApps has 5,000 installed servers. Last quarter, its revenues were $US57 million, up 72 per cent for the same period from last year.

NetApps servers are what in the old days we called closed. They don't run Windows, or any open operating system. They come with many disks and no third-party anything. Their processors are Alphas, not Pentiums. You plug them in to your network, and they provide storage services -- case closed.

Why would anybody buy a closed NetApps server instead of running file-server software on an open Windows NT Pentium? The answer is similar to Ellison's take on NCs vs. PCs. Network storage servers are not PCs, and trying to build them on a PC platform is a joke.

The NetApps operating system is not a 40MB monstrosity like Windows NT. It's a 2MB real-time kernel. Net-Apps programmers have a tight focus on moving data between disks and networks. They write, debug, test, and support all of the hardware and software in their servers. And now, at a $US200 million annual run rate, they say they're spending more on research and development than their server competitors can afford -- even Sun Microsystems.

Offering closed servers has some big advantages. Reliability is one. Another advantage is not needing to support the programming interface barriers that operating systems use to protect themselves from third-party developers. And then there is what NetApps calls "layer bashing".

One powerful feature of the Internet is its layers. For example, HTTP runs on top of TCP on top of IP on top of Ethernet. This layering allows the Internet to evolve rapidly, each level at its own speed. The trouble with layers is poor performance, the worst example being HTTP on top of TCP.

Well, to make their appliances really fast, NetApps programmers bash layers, and they get away with it because they are alone in their closed computers.

Here's an example of layer bashing. NetApps servers compute TCP/IP checksums just like everybody else, but then they leap through many layers of protocol and OS functionality to store them. When a packet needs retransmission, the checksum is not recomputed, but speedily retrieved.

The trouble with taking sides against Gates is that he's no dummy. He doesn't really disagree with Ellison. Gates knows Ellison was right about NCs, at least on the client side. He just can't give Ellison the satisfaction. So instead of Windows NC, he calls it Windows CE.

Call NetApps a supplier of network appliances, or network computers, or something else, but call them.

(Internet pundit Bob Metcalfe invented Ethernet in 1973 and founded 3Com in 1979. Send e-mail to or visit

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