AI may be grabbing the headlines, but data is powering the revolution. At the heart of that transformation is NetApp, a $30 billion intelligent data infrastructure leader, helping enterprises unlock the value of their data across cloud and AI. After a landmark year driven by record financial performance and growing enterprise AI demand, CEO George Kurian believes data, not chips, will define the winners of the AI era.
You know, when we last spoke, which is about three years ago, it was all about the cloud and now it's all about AI. What do you make of this massive transformation and shift that's taking place?
I think it's built on the foundation of large-scale digital technology being available with an important couple of other ingredients. One is sophisticated computer models.
And of course the ability to harness the power of large amounts of data which is where we...
Your thesis on data being at the center of everything is proving right today.
Thank you. Yes. We've long held the view that in addition to talent and understanding your business or your clients deeply, data becomes the competitive moat of an industry. You know, everybody has access to the same chips. Everybody has access to the same models and the models themselves are largely trained on the same data. And so your ability as an organization to deeply understand your business, your clients and employees using your data becomes the competitive moat.
So that is the competitive moat as you point out. But I want to understand from you, it's been a little over 10 years for you here at NetApp, so you've seen many cycles. What is specific to this particular wave that we are seeing, the AI wave that everybody wants to get on top of? What is different this time around?
I think it has the promise of a platform shift in a broad sense. Certain industries are already experiencing that, digitally intensive industries. For that to become a reality, the technology has to prove out its promise. I think the organizations that use the technology need to have an understanding of how it works. It can't just be a black box. And you need to be able to change the way people and businesses fundamentally operate. So lots of promise but lots of work to do.
You know, I started by saying that you've had a landmark year. How do you build on that? How do you top that? Because you've had a record-breaking quarter in many ways.
I think it starts with strategic clarity, which is what can you do and be the best in the world at? That gives you the clarity and humility to rethink your ecosystem so you can build complementary capabilities and serve your customers really well. The second is customer centricity — to help clients you also have to understand how to use the technology yourself. And the third is culture. We have a belief that whenever there's a transformation, you have to understand its relevance to your business and if it is relevant, lean into it and encourage adoption. Trust beats policy all day long. It's much easier to have a workforce that trusts and loves the company and wants to do right by it, and it encourages use and adoption versus having a big policy manual of to-dos.
No, no. And what has it done in terms of workforce and workflow for you inside NetApp?
I think we have two perspectives on that. The first is we're trying to build an enduring institution. At the fundamental heart of every institution and professional organization is the idea of apprenticeship. We really believe in bringing young talent to the company because they will be the future generations. What has been interesting is that mentorship has been reversed — the new talent is much more facile with the technology than the more senior talent. So the new generations are teaching the older ones how to use it. That's a long-term view of the talent pipeline. The second is you need to get people to think about the skills needed now that they have these powerful tools. For example, in software development, an entry-level person would write code and a senior person would teach them how to review code. Now you've got an agent writing the code for you, and an entry-level employee has to learn how to review the code. So you have to upskill people. The third thing we've done is to measure business outcomes rather than just usage. In software development, rather than look at indicators like token use, we're seeing whether people deliver better, higher-quality code. In customer support, we measure whether customers get the information they need better, faster, easier.
You know, it's interesting that you talk about bringing young people in and how young people are a lot more agile with this technology. But what does all of this mean as far as the workforce is concerned from a jobs point of view? I think that is causing a great degree of anxiety at this point in time. If you've looked at graduating ceremonies and what's going on with tech CEOs and the backlash we're seeing, how do you respond to that? What do you believe the workforce of the future will look like if we have this hybrid model where digital labor and human labor coexist?
I think there are broad implications and it begins with having a deep understanding of the technology itself. Aristotle says the most dangerous thing is the illusion of knowledge. Today, broadly including the tech industry, we have an illusion of how this technology works and learns and understands itself. So we've got to get a lot deeper in terms of truly understanding where it is useful and where it's not. The second is, as a member of the technology industry, we haven't always gotten it right. Social media and remote working are examples where we highlighted the promise of something that had downstream negative consequences, like mental health. So we need to be more balanced. Thirdly, you've got to make sure we cross the digital divide. Particularly in India, there is an opportunity for India to lead the world in applying this technology to make available affordable healthcare, better food security, or mitigate catastrophic risks. That's perhaps more important than gloating about how powerful the technology is. We have a responsibility to make sure the next generation doesn't feel as much despair as they do right now.
The other thing that's becoming part of conversations is the fact that you need partners. You need to create an ecosystem. It cannot be one company or a few companies driving this. How do you respond to that? And do you believe policy or regulation will force the ecosystem, or will enlightened self-interest force collaboration?
We've been in the data center business for a long time and data centers are multi-vendor. We've always believed it's better to harness the power of collaboration and community to build a better outcome for clients. That's true across the globe. It probably requires a combination of regulation to protect against some risks, but also enlightened self-interest. Platforms are better when more people contribute to the value of the platform than a single controlling individual.
Speaking of partnerships, you've done a bunch of them this year, including with Google Cloud, Nutanix, and others. What's exciting at this point? You've got a solid pipeline of launches. What's happening on the innovation engine that has you excited?
It's really to help our clients use their data and deliver amazing outcomes. We've been fortunate to work with the European Space Agency to map the universe. That work doesn't happen alone; it starts with the knowledge and insight of our clients, but also the partnerships we strike with other organizations to deliver breakthroughs. The importance of partnerships is that they allow us to bring the world's best capabilities and work with other industry leaders to produce much better outcomes.
You've been very bullish on the Indian market. But how has India changed for NetApp since we last spoke about three years ago?
In multiple ways. We've always believed in the talent in India. We have our largest development center, now close to 4,000 employees.
And you think that will continue to be the case? Everyone's talking about the agentification of the workforce, which might lead to less hiring or less offshore work. How do you respond to that?
