Feeds

NetApp still smashing the competition

G-men at war

Application security programs and practises

NetApp carried on steamrollering EMC and other competitors by growing faster than the market in its third fiscal 2011 quarter, with a 25 per cent jump in revenues and a 60 per cent hike in profits.

It's making more headway selling storage to VMware customers than VMware owner EMC.

Revenues rose to $1.268bn compared to $1.012bn a year ago. Net income soared to $172m contrasting to the $108m recorded a year ago.

The numbers would have been even higher, but NetApp could not supply enough Flash Cache I/O modules for its new FAS3200 and FS6200 arrays. Demand exceeded supply, particularly with the 3200 which has had the fastest new product sales ramp in NetApp's history. It is estimated revenues could have been $10m – $15m higher without this supply hiccup.

CEO and president Tom Georgens said: "We are committed to catching up to the demand as quickly as possible."

Revenues rose only 5 per cent compared to the previous quarter and NetApp actually missed Wall St revenue estimates of $1.279bn. The NetApp steamroller is being restrained by the Flash Cache supply constraints, which could affect the final fiscal 2011 quarter where NetApp is estimating revenues will be $1.38bn and net income $147m - $172m.

The two G-men

EMC is hoping that its new VNX converged CLARiiON and Celerra storage array line will retard NetApp's progress even more, particularly when it adds its block-level deduplication facility to match NetApp's A-SIS later this year. El Reg also understands that we can expect screamingly good SPC benchmark numbers from the VNX later this year.

EMC's president and chief operating office Pat Gelsinger has a focus on Georgens' NetApp and wants EMC to overhaul its arch-competitor in the mid-range storage array space. He has ground to make up.

NetApp reckons there is an almost 30 per cent difference between its growth rate and that of its four largest competitors, using a measure that looks at results over two years. It believes it has a 15 per cent share of the overall external disk storage market. Stifel Nicolaus analyst Aaron Rakers estimates it actually has about a 12 per cent share, up from 8 per cent a year ago.

Other competitive forces impinging on NetApp's future growth rate include Dell's Compellent, HP's expected downsized 3PAR array and, possibly, Oracle's Sun 7000 ZFS array.

NetApp knows this and has, somehow, to continue its growth momentum, either with faster hardware or enhanced software or both. It noted it faced execution challenges in the EMEA geography which are being focused on by management but EMEA results were fairly healthy. Revenue there was $450m, a 35 per cent year-on-year increase and a 29 per cent rise compared to the previous quarter.

If IBM tells its sales force to sell V7000 and XIV arrays in preference to NetApp-sourced N Series, then that could put somewhat of a brake on NetApp's growth. There are unconfirmed rumours that this is an IBM EMEA sales tactic. All good things come to an end and that includes NetApp's long run but when, when, will that long run end? We don't know. NetApp's competition is making its moves and we'll have to wait and see how effective they are. ®

Bridging the IT gap between rising business demands and ageing tools

More from The Register

next story
Apple fanbois SCREAM as update BRICKS their Macbook Airs
Ragegasm spills over as firmware upgrade kills machines
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
Attack of the clones: Oracle's latest Red Hat Linux lookalike arrives
Oracle's Linux boss says Larry's Linux isn't just for Oracle apps anymore
THUD! WD plonks down SIX TERABYTE 'consumer NAS' fatboy
Now that's a LOT of porn or pirated movies. Or, you know, other consumer stuff
EU's top data cops to meet Google, Microsoft et al over 'right to be forgotten'
Plan to hammer out 'coherent' guidelines. Good luck chaps!
US judge: YES, cops or feds so can slurp an ENTIRE Gmail account
Crooks don't have folders labelled 'drug records', opines NY beak
Manic malware Mayhem spreads through Linux, FreeBSD web servers
And how Google could cripple infection rate in a second
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
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.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.