About NETAPP, INC.

NetApp knows storage backwards and forwards and on premise and in the cloud. The company makes data storage systems used by businesses for archiving and backup. Its devices are used in network-attached storage (NAS) Fibre Channel and IP-based storage area network (SAN) settings. NetApp's OnCommand software product enables storage systems management while other applications focus on data loss (MetroCluster) and protection (SnapProtect). The company mainly sells to the energy, financial services, government, health care, and IT sectors through distributors. It makes about a quarter of its revenues from direct sales.

Operations

More than 60% of NetApp’s revenue comes from product segment and services bring in about 25% while software entitlements and maintenance account for the rest. The company outsources its manufacturing to third parties in the US, Europe, and Asia.

Geographic Reach

The US is the company's largest market, representing around 55% of its total sales. Europe, the Middle East, and Africa account for nearly 30%, while the Asia/Pacific generates 14% of sales.

Sales and Marketing

NetAPP has field sales offices in 50 countries. It employs a multichannel distribution strategy, selling products and services to end users and service providers through a direct sales force and through channel partners, including value-added resellers, system integrators, OEMs, and distributors. During 2013, sales from indirect channels represented 82% of its net revenues. NetApp's major customers include  Arrow Electronics (22% of total sales) and  Avnet (16%).

Financial Performance

NetAPP’s revenue declined oh-so-slightly in 2014 (ended April), coming in at $6.325 billion compared to $6.332 billion in 2013. Revenue from OEM products dropped 26%, while hardware maintenance contract revenue increased because of a higher installed base of hardware products under maintenance contracts.

Net income, on the other hand, jumped 26% higher to land at $637 million in 2014 from $505 million in 2013. Greater operating income – the cost of product was down $182 million in 2014 from 2013 and the company spent $76 million less on sales and marketing expenses in 2014.

Cash flow from operations dipped to $1.35 billion in 2014 from $1.39 billion in 2013, in part because accounts receivable was $80 million less.

Strategy

A large part of NetApp’s strategy to help its customers move their storage to the cloud computing environment. And a large part of the company’s cloud strategy is hybrid cloud, which combines premise storage and external cloud storage. The company is developing hybrid cloud offerings through its Data OnTap storage operating system. Data ONTAP software allows companies to move data across various clouds and supports customer choice for application, technology, and cloud partner options. The company’s research and development spending increased almost 11% from 2012 to 2014.

Instead of competing with cloud providers like Amazon’s AWS and Microsoft’s Azure, it wants to make it easier for customers to use those services. In 2014, NetApp released products to help customers extend their IT infrastructure including data management and data protection to Azure and AWS.

To help develop new cloud and other product offerings, NetApp opened a research and development lab in Research Triangle Park, North Carolina. The lab provides shared-services infrastructure for testing its hardware and software against conditions found in enterprise data centers and cloud environments.

Mergers and Acquisitions

NetApp continues to use acquisitions to add functionality to its product line, to enter new markets and, to adapt to evolving technology. In 2014, the company purchased Riverbed Technology’s SteelStore product line for $80 million. SteelStore products support backup applications and cloud providers that give customers choices in how they extend their existing data protection infrastructure into the cloud. In 2013 NetApp snapped up mobile device software provider ionGrid, for $17 million, and storage technology provider CacheIQ, for $91 million.

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NETAPP, INC.

495 E Java Dr
Sunnyvale, CA 94089-1125
Phone: 1 (408) 822-6000
Fax: 1 (408) 743-6106
www.netapp.com

Stats

  • Employer Type: Public
  • Stock Symbol: NTAP
  • Stock Exchange: NASDAQ
  • Chairman and CEO: Thomas Georgens
  • Vice Chairman: Tom Mendoza
  • President and Head, Go-To-Market Operations: Robert E. Salmon

Major Office Locations

  • Sunnyvale, CA

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