EMC has lost its single supplier (storage) status with Telstra creating an opening for Network Appliance to move in and secure deals valued at more than $10 million in the past 12 months.
Similar deals have been played out with the Commonwealth Bank, ANZ and National Bank, all long-term EMC customers which have made the shift to Network Appliance seeking to add storage capacity while reducing costs.
NetApp A/NZ managing director Simon Green said the telco has added more than 400 terabytes of capacity and moved to a dual-vendor strategy to improve total cost of ownership (TCO).
Green said the move was part of a cost-reduction strategy by Telstra CIO Jeff Smith and that, by moving away from a single supplier, the telco is in a better position to keep both vendors honest.
"When budgets are collapsing customers look at ways to drive down costs - that's the tipping point; I think Telstra realised it had been spending millions of dollars with this one vendor and couldn't keep spending at such high levels. The days of throwing money at problems has gone," he said.
"Pricing wasn't really the great differentiator in this deal as EMC has driven down prices enormously in recent years. The compelling moment for Telstra was when they realised we can install a terabyte in hours instead of weeks that equals dramatic cost savings."
Network Appliance is also making inroads into Australia's largest banks with Green boasting a return on the Commonwealth Bank's $3.6 million outlay was realised in nine months.
He said when NetApp began in Australia six years ago it had three systems installed, but in the past three years has grown 60 percent with more than 1000 installations today.
The breakthrough came in 2002 when the company won a $20 million Department of Defence contract winning single supplier status.
"We sell on efficiency and data lifecycle management; EMC has four disparate systems that don't talk to each other. EMC is becoming like IBM - not giving customers choice," Green said.
However, EMC A/NZ managing director Steve Redman said comparing EMC to IBM is the "most ignorant, ridiculous statement I have ever heard".
"EMC is providing customers with choice which is why we grew 20 percent last year and secured 132 new customers in this region alone," Redman said.
"His [Green] competitive intelligence isn't as good as he thinks because customers are voting with their wallets."
In the past 12 months, Redman said, the storage market globally has grown by $1 billion and EMC has secured $600 million of that figure while Network Appliance and Veritas secured $125 million each.
Redman confirmed Telstra moved to a dual vendor strategy, but said the telco is spending "similar amounts" with both suppliers.
"Telstra is still one of our biggest accounts and only changed its strategy to increase competitiveness; and the banks are also EMC customers," he said.
Telstra was unavailable to comment on its storage strategy.