The sudden replacement of Dan Warmenhoven as chairman at NetApp (Nasdaq: NTAP) and his retirement from the storage technology firm’s board likely means more change is coming.

As the company, which has a big presence in RTP, struggles to deal with the era of “cloud computing,” CEO and now Chairman Tom Goergens has even more control over its future.

NetApp announced the changes early Monday with the words “effective immediately.”

While the press release was filled with warm comments all around from Warmenhoven, who led NetApp’s drive to build a campus in RTP adjacent to Cisco, and Goergens, it is clear NetApp has stumbled while the world has embraced the virtual world of the cloud.

Two rounds of layoffs over the span of a year has taken divot out of employee morale. 

An analyst at Wells Fargo wrote Monday that change was needed.

“The coincidental timing of this announcement with that of the recent realignment/restructuring announcement, in our opinion, raises some fundamental questions. However, on the flip side, board change could, at times, signal changes to a company’s strategy,” wrote Maynard Um in a research note picked uyp by Barron’s.

“While there is a window of time where NTAP may be given some benefit of the doubt on the fundamentals (i.e., that storage spending has just paused and will return rather than gone to cloud and competing vendors), we have held the view that NTAP, longer term, will need to either own more pieces of the stack or be a part of a company that does. While the board changes may not necessarily result in any of these actions, we believe NTAP needs to challenge the status quo. Until we see signs of fundamental improvement or changes, all else being equal, we maintain our Market Perform rating.”

“Glory Years”

At tech news site The Register in the U.K., columnist Chris Mellor pointed out that Warmenhoven’s legacy will be mixed, dating back to 2009 when another firm with a big Triangle presence – EMC – somehow beat out NetApp in a deal to acquire Data Domain.

“Is there any more to this than standard retirements and handovers? NetApp has announced some 600 layoffs and its revenues are flattish, and have been for about three years, the time Georgens has been captain of the ship,” Mellor wrote. “You would think that if the board was irritated with this, Tom G wouldn’t have been elected chairman.

“Georgens stays as CEO and president so he now has all three major titles and responsibilities, being firmly in charge.

“Warmenhoven will be remembered as NetApp’s CEO throughout its glory years. His reign would have been crowned with the Data Domain acquisition but he’ll be remembered for letting that one slip through his fingers with EMC snatching it from him in June 2009 – just days after he’d paraded Data Domain’s then CEO Frank Slootman as a trophy at a NetApp HQ all-hands meeting.”

So what does Georgen’s do now that he has virtual control of the company?

“Tom Georgen’s most pressing item is, this Vulture thinks, how to cope with the cloud, with Amazon and Google front and centre as strategic threats,” Mellor said. “The second one is how to raise revenues, with large and mid-range customer spending slowed by their increasing evaluation and adoption of cloud services from rivals and smaller customers choosing cheaper storage from competing startups including Nimble and Pure.”

TheStreet View

Over at TheStreet, however, the analysts didn’t seem to be that shaken by what is unfolding at NetApp.

“TheStreet Ratings team rates NETAPP INC as a Buy with a ratings score of B,” the financial news site explained.

TheStreet Ratings Team says this about NetApp:

“We rate NETAPP INC (NTAP) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company’s strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, notable return on equity and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow.”