Editor’s note: Angela Lambert is a research analyst with Technology Business Research.
HAMPTON, N.H. – TBR believes NetApp (Nasdaq: NTAP) will focus on geographic expansion to maintain revenue growth, applying channel partnerships to enhance VDI and cloud storage services in Europe and India. Investments in NetApp’s global channel will continue driving revenue growth, which reached 24.8% in 3Q11.
[NetApp, which has a large operation in Research Triangle Park, N.C., reported revenues below expectations and sees choppy demand ahead. “In general we go through periods of good news followed by bad news,” CEO Tom Georgens told Dow Jones newswires. “I can’t say we’re on a steady trajectory up.” Read Dow Jones coverage of the earnings report here.]
NetApp will attempt to gain traction as a multi-platform provider by delivering big data storage solutions using technologies leveraged by its Engenio acquisition. The move will enable NetApp to diversify its revenue by gaining market share outside of the midmarket space and marginalize revenue impact from shortcomings in the public sector.
Achieving midmarket revenue growth remains at the forefront of NetApp’s strategy. To drive SMB sales through times of slow mature market spending, NetApp refreshed its entry level FAS2000 storage systems, positioned for higher performance and scalability than previous generations, at a low price point. TBR expects the improved price-value proposition to resonate among businesses balancing growing data requirements with tight budgets.
Channel Alliances Key
NetApp is leveraging channel alliances to stay afloat during public spend slowdowns.
NetApp will continue to leverage its global partner network as a means to generate growth momentum in its core storage portfolio, despite economic uncertainty in the US and Europe. In 3Q11, NetApp enhanced cloud solution offerings via a focus on developing alliances with cloud management software providers including Gale Technologies ManageIQ, and VMware. The partnerships provide NetApp with analytic and managerial tools, creating an avenue for continued capitalization on virtualization trends.
NetApp will leverage alliances to pair it storage competencies with IT automation and services technologies, better aligning the company to gain traction in hybrid and private cloud deals. NetApp is offering GaleForce Turnkey Cloud Solutions and ManageIQ Enterprise Virtualization Management Suite to provide automation and management tools adapted to customer needs, empowering quick launches of hybrid and private cloud solutions.
Flexible IT infrastructures will encourage solutions upgrades by creating solutions that build on existing environments to drive sales in conservative markets.
NetApp will drive sales through economic uncertainty by demonstrating efficient and scalable storage as a base for cost effective virtualization and cloud services. NetApp is delivering flexible, cost-effective IT solutions to overcome increased competition in its core midmarket segment and drive new solutions sales by negotiating customers’ reluctance towards ‘rip and replace’ IT upgrades. NetApp will lean on this strategy to cultivate incremental upgrade capabilities, better positioning the company to navigate through choppy economic conditions.