Falling share price exposes NetApp
NetApp's market worth has dropped 51 per cent in 16 months, making it vulnerable to a takeover.
In February 2011 NetApp shares cost $60.60 and its market capitalisation was $21.9 billion. Now it's worth just $10.9 billion with shares trading at $30.02. Why?
Investors think it has gained storage market share relative to Dell, HP and IBM and other companies except EMC - which is growing much, much more quickly.
They think it's vulnerable to hybrid flash/disk array startups like Nimble, Tegile, Tintri and others, all-flash array startups like GreenBytes, Nimbus, Pure Storage, SolidFire, Violin Memory, WhipTail and others. It has no auto-data placement strategy for tiers of SSD and disk storage, relying on caching instead.
Investors could think it is not capitalising enough on its Engenio acquisition and its object storage strategy is stalling.
Yet it has recorded consistently growing results  due to shrewd executive management and great operational management. The investor doubters could be totally wrong. Yet the shares are tanking and the company is now affordable to the likes of Cisco, IBM and Oracle.
Will they jump on NetApp and give themselves much stronger clout to compete with EMC? You can see the basic logic easily enough. IBM resells NetApp filers. Cisco needs its own storage capability to be sure of prospering in a world of converged systems. Oracle's storage efforts outside its own Exa-type systems are going nowhere. If one of them pounces that would be a massive move. ®