Feeds

NetApp signals recession kick-off

Uh oh

Next gen security for virtualised datacentres

Batten down the financial hatches - NetApp has put hiring plans on hold, and is seeing customers putting off spending. CEO Dan Warmenhoven says it's spreading like a nuclear chain reaction from the automotive and financial sectors.

It's hardly a shock, though - how could financial institution implosion and bailout with a drastic reduction in business loan availability not hit the storage market and IT generally? Warmenhoven has felt the first wind of a potentially mega-credit crunch chicken coming home to roost and put plans to hire 500 more NetAppers on hold.

The effects started only days ago, and he's now expecting NetApp's results for the current quarter to be much lower than anticipated. The company will still grow, he thinks, even gain market share - just not so much of it as he thought last March.

NetApp CEO Dan Warmenhoven

Dan Warmenhoven, NetApp's CEO.

NetApp's Wall Street sales have fallen from July 2007's 17 per cent of total sales to less than ten per cent now. There is also anecdotal information from analysts that high-end EMC DMX sales are being affected, though nothing concrete.

It's possible NetApp may have to make layoffs, but Warmenhoven is hopeful that this won't happen. At the same time he's signalling that if he has to then he will. He is not seeing signs of actual distress amongst NetApp's customers yet - instead he's seeing them conserve cash and wait, to see if things get worse. The effect on storage purchases is the same though; they don't get made.

How will customers cope with storing all the new data coming their way? Deletion and deduplication are two obvious ways, as well as imposing quotas on users' unstructured data like email.

As customers delay spending to conserve cash and as credit becomes harder and more expensive to obtain, then storage suppliers with a small amount of cash reserves, a high level of debt repayment, and/or a need to invest in product development will be more vulnerable than others to a sales revenue slump - particularly if they sell to market sectors directly exposed to the credit drought such as finance, construction and automotive manufacturing. Better get your credit crunch chicken shelter ready. ®

The essential guide to IT transformation

More from The Register

next story
The Return of BSOD: Does ANYONE trust Microsoft patches?
Sysadmins, you're either fighting fires or seen as incompetents now
Microsoft: Azure isn't ready for biz-critical apps … yet
Microsoft will move its own IT to the cloud to avoid $200m server bill
Oracle reveals 32-core, 10 BEEELLION-transistor SPARC M7
New chip scales to 1024 cores, 8192 threads 64 TB RAM, at speeds over 3.6GHz
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
Object storage bods Exablox: RAID is dead, baby. RAID is dead
Bring your own disks to its object appliances
Nimble's latest mutants GORGE themselves on unlucky forerunners
Crossing Sandy Bridges without stopping for breath
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
BYOD's dark side: Data protection
An endpoint data protection solution that adds value to the user and the organization so it can protect itself from data loss as well as leverage corporate data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?