In this podcast, Hitz talks about why some companies succeed and others fail. He also discusses how powerful lessons often come from strange and unexpected places, such as a cattle ranch.

How to Castrate a Bull – Unexpected Lessons on Risk, Growth, and Success in Business might seem like an unlikely title for a business book. But Dave Hitz drew from his ranch hand experience to take NetApp from a startup to a $3.3 billion network storage company. Hitz, a then college dropout who liked to solve puzzles, co-founded NetApp in 1992, along with two other colleagues. His book covers the hard lessons learned during the company’s major business cycles, including the dot.com bust.

It might be hard to believe that NetApp, one of the fastest growing technology companies, began as an idea scribbled on a napkin by Dave Hitz. Risk and ambition permeated the company in the early 1990s. NetApp gave birth to a new storage device category called the network filer. Revenues doubled every year until the company reached $1 billion in revenue in 2001. After the dot.com bust of 2001, NetApp’s revenues quickly declined to $800 million for fiscal 2002 and the stock fell from $150 a share to $6 a share. 

Hitz says, "We had designed NetApp for growth, and when the growth stopped, everything broke, but this time in a bad way.”  He says the company survived the crash because it had diversified its customer base, adding banks, telecom providers, and other enterprises and the federal government. These organizations helped to leverage the impact from the dotcom and tech companies that had provided the bulk of the company's revenues.  NetApp faced other challenges when it moved to direct sales from indirect sales, added support for Windows to a product line based on Unix, and embraced storage area networks when the company was totally focused on network-attached storage devices.

What does Hitz have to say about the current economic downturn?  “The current downturn is creating a similar attitude change. There are some hints in today's tech world that it is going to happen again. We might hear CIOs saying they aren’t going to build another data  center. This downturn will be the catalyst that leads to an even more heated market for data center virtualization and cloud computing.  With that in mind, now is not the time for grandiose plans. Customers are not thinking about grandiose right now. They want to hear about saving some money."

Today, NetApp ranks third in market capitalization in its industry, behind EMC and Seagate Technology and ahead of Western Digital, Brocade, and Quantum. In total revenue, NetApp ranks fourth behind EMC, Seagate, Western Digital. NetApp also has a long history of making “Best Place to Work” lists. For seven years in a row, NetApp has appeared on Fortune’s 100 Best Companies to Work For.

Bio
David Hitz is executive vice president of Net App where he oversees future strategy for the $3.3 billion network storage company.  In 1992 he, along with James Lau and Michael Malcolm, founded NetApp (originally called Network Appliance) with a desire to simplify storage the way Cisco simplified networking.  Before 1992, Hitz worked as a senior engineer at Auspex Corporation, an enterprise storage solutions provider, where he was responsible for file systems and microkernel design. He also held engineering positions at MIPS Computer, focusing on file system and I/O subsystem design for the System V kernel development effort. Before his career in the computer industry, Hitz worked as a cowboy, getting valuable management experience by herding, branding, and castrating cattle.

Hitz holds a bachelor's degree in computer science and electrical engineering from Princeton University. His first book is How to Castrate a Bull – Unexpected Lessons on Risk, Growth, and Success in Business.

Resources
Who Wants to Be A Billionaire? - Entrepreneur
Preaching the Mantra of Keep it Simple - Computer Reseller News
How to Castrate a Bull Web Site

Production Credits
Elizabeth Ferrarini, Executive Producer
Tom Parish, Host and Audio Producer
Audio Editing by Doug Marcis