But it didn't happen that way. The two tigers: David Hitz '86, founder and executive vice president of engineering, and Daniel Warmenhoven '72, chief executive officer, didn't actually meet until Mr. Warmenhoven was brought aboard by a venture capitalist to steer the young company in the right direc tion. The company was two years old then. Mr. Warmenhoven was an experienced manager and chief executive officer--something the young company lacked.

Mr. Hitz founded Network Appliance with two colleagues in 1992. Their idea was simple, he said.

"We wanted to build a box that sits out on the network, and instead of attaching your disk drives directly to your computer to access data, you attach them to this box on the network. Once the data is on the network, it's a really big advantage."

It's advantageous because instead of having data accessible only by a single computer, it becomes accessible by all authorized computers from any location as long as a network connection is available. The more that data can be shared, the more valuable it becomes.

But the idea was almost too simple. In the beginning, Mr. Hitz and his partners were unable to find financing because their product was designed to do only one thing.

"We called it an appliance and used the analogy that if you want to toast bread, there are a number of ways to do that," he said. "You can put the bread in the oven and turn on the broiler. The odds of your bread coming out just right are pretty low. Or you can buy a toaster. All it does is toast bread. The odds of your bread coming out just right are pretty high."

But, he said, investors failed to see how a product that did only one thing could be superior.

"They couldn't understand why anybody would pay money to buy a product that did less," he said. "No matter how many analogies we tried to make, telling them it's like a toaster and it only toasts, they just couldn't get it."

The three entrepreneurs struggled along without any venture capital infusions. They managed to attract the attention of a group of "angel investors" who each invested a small amount of money. That funding helped them reach the point of actually shipping product.

"We had paying customers," Mr. Hitz said. "That's the ultimate test for venture capitalists. They may not understand the technology, but they understand money."

When Network Appliance did attract venture capital interest, it was Sequoia Capital--one of the best known and most respected investment companies. Headed by Don Valentine, Sequoia Capital had also invested in Cisco Systems Inc. And, as fate would have it, Mr. Warmenhoven had recommended Cisco to Mr. Valentine. Mr. Warmenhoven, who was at Hewlett Packard at the time, wanted HP to buy Cisco, but no one there thought the start-up company was a good investment. Mr. Valentine did.

A few years later, Mr. Warmenhoven told Mr. Valentine that he was looking for a job and would love to run one of the start-ups in his portfolio. Mr. Valentine brought Mr. Warmenhoven in as chief executive officer of Network Appliance.

"I think a good CEO has to have magic CEO dust that they can sprinkle on things to make them right," Mr. Hitz said. "We needed a CEO like that. I am absolutely convinced that Dan has magic CEO dust. There's just something about him that inspires loyalty in people. People trust him; he's a completely honest person. You just really feel confident. It's magic."

Mr. Warmenhoven doesn't think it's so much magic as it is hard work and experience, understanding people, organizations, and the dynamics of making decisions.

"I've had lots of experience at IBM and Hewlett Packard," he said. "I've had lots of business school programs. And part of it, I think, is understanding the art of leadership. It's a lot of organizational behavior and theory; but you do need the personality to pull it off. So, if anything, that's the magic dust."

He was quick to add that he thinks Mr. Hitz has his own magic dust.

"He's one of the smartest guys that I have ever met," Mr. Warmenhoven said. "His intellectual capacity is just awesome. I am no slouch intellectually, but when I am finished talking with him after an hour, I am tired. It's hard to keep up with him. His mind just goes at an incredible speed. He really is a Renaissance man. He can talk to you about languages, evolution, or whatever."

If this sounds like a mutual admiration society, well, it is. Both men readily say that it is a pleasure to work together.

"We've had a good time together," Mr. Warmenhoven said. "We've worked together now for about six years, and we hit it off right away. It really was like a natural bonding that took place. We will often debate or argue about why something is, but we always seem to get to the same place. On a business issue or a personal issue, we often get to the same outcome, but from two different paths. Then, just for the intellectual stimulation, we'll argue about which path is correct."

 

David Hitz Daniel Warmenhoven

Mr. Warmenhoven added that it is immensely satisfying to see their vision for Network Appliance become reality.

"For me it's like the quarterback on a winning team," he said. "There's a sense of fulfillment here. But in addition to that, we've had great fun just doing it. We enjoy each other's company. We enjoy spending time together."

So what's in the future for these guys? Mr. Warmenhoven said he plans to "step out of the harness" and become a mentor to other start-up companies--but not just yet.

"I am having too much fun," he said. "So I'll stay here a few more years."

Mr. Hitz said he has no specific plans.

"I never know what is next," he said. "There was a point when that bothered me. Then one day someone said to me that I had done pretty well so far and that it was about time I started trusting my intuition."

He said Network Appliance presents a constant challenge because of the company's rapid growth.

"The rapid growth breaks everything," he said. "That's exciting and that's part of the reason I stay at Network Appliance."

About Network Appliance

Network Appliance designs, manufactures, markets, and supports high-performance network-attached data storage and access devices. The company has two product lines: appliances for filing and storing data and others for caching Web pages. They are built to perform one job quickly and simply. Servers that handle storage allow users anywhere on a network to store and retrieve files faster than traditional methods. Caching appliances keep popular Web pages in close proximity to Web servers, which can cut download times by 80 percent.

Network Appliance's data management solutions allow companies to consolidate data from many different sources into centralized locations, providing for improved manageability. This consolidation is possible because the storage function is separated from the application. The data is then placed on a dedicated appliance that is optimized to serve data.

Network Appliance builds horizontal, agnostic appliances, which means they work regardless of who manufactured the equipment. They work with NT systems, Unix systems, Hewlett Packard computers, Dell computers, or Compaq computers. Clients include Yahoo!, Lycos, Citicorp Securities, Siemens, Lockheed, Cisco, Motorola, and Texas Instruments.

The company has produced 20 consecutive quarters of greater than 70 percent year-over-year revenue growth. In 1999 Network Appliance was listed by Fortune magazine as fourth in the Top 100 Fastest Growing Companies List, was number 13 on Business Week's IT 100 list, and was named one of the 50 Best Performers by Business Week.