NetApp, Inc.

NetApp knows storage backwards and forwards. 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.

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 10% to 15% of sales.

Financial Performance

After three straight years of sizable growth, NetAPP saw its revenues increase 2% from $6.2 billion in 2012 to reach a record-setting high of $6.3 billion in 2013. Profits, however, were down by 17% from $605 million in 2012 to $505 million in 2013.

Its growth was attributed to an 11% sure in sales from the Asia/Pacific in addition to spikes in sales from its services (11%) and software entitlements and maintenance (10%) operations. Its profits were down in 2012 because of higher operating expenses, especially sales and marketing expenses affiliated with higher salaries and stock-based compensation.

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 81% of its net revenues. NetApp's major customers include Arrow Electronics (19% of total sales) and Avnet (15%).

Strategy

NetApp took an early lead in the NAS market, but the rise in popularity of the relatively inexpensive devices attracted a host of competitors. Never content to cede market share for any storage offering, industry leader EMC also sells NAS products. Companies such as Sun Microsystems used acquisitions to crack the market, and even former customer Dell now makes its own NAS devices. Dell is one of a number of companies that make Microsoft Windows-based NAS products.

However, NetApp has moved beyond the role of pure-play NAS vendor. Responding to customer demand, it expanded the functionality of its storage filers to work within more complex SAN configurations. The company also provides data security appliances and controllers for storage virtualization. Its products are branded with yet another three letter designation, FAS, which stands for fibre-attached storage, which denotes a storage system connecting to an IP network via a Fibre channel connection.

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 2013 it snapped up mobile device software provider ionGrid, for $17 million, and storage technology provider CacheIQ, for $91 million.

In 2011 the company bought Massachusetts-based Akorri Networks, a developer of data center management software. The deal was intended to better position NetApp to offer products to the growing market for outsourced data management and give it a leg up in the areas of data capacity and network performance planning and management.

Also that year NetApp purchased the Engenio external storage systems business of LSI in an all-cash transaction valued at around $480 million. The company made the acquisition to address emerging segments of the storage market, namely video (including video capture and video surveillance) and high-performance computing (used in genomics sequencing and other scientific research applications). It also benefited from the unit's established OEM business for server-attached and embedded storage products.

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NetApp, Inc.


495 E Java Dr
Sunnyvale, CA 94089-1125
Phone: 1 (408) 822-6000
Fax: 1 (408) 7436106
www.netapp.com

STATS


  • Employer Type: Public
  • Stock Symbol: NTAP,
  • Stock Exchange: , NASDAQ
  • Chairman and CEO: Tom Georgens
  • Chairman and CEO: Tom Georgens
  • Vice Chairman: Tom Mendoza

Major Office Locations

  • Sunnyvale, CA
  • Sunnyvale, CA

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