About Netapp, Inc.

NetApp knows storage backwards and forwards and on premise and in the cloud. The company makes hardware and software for storing, managing, accessing, and analyzing data. Its products extend customers' IT infrastructure to the cloud environments of Amazon, Google, IBM, and Microsoft.. The company's Data Fabric platform is designed to simplify and automate data while its FlexPod product, developed with Cisco Systems, is designed to helped customers manage applications from Oracle, SAP, and Citrix. The company mainly sells to the energy, financial services, government, health care, and IT sectors through distributors.

Operations

NetApp gets revenue from the sale of products and providing software maintenance and hardware maintenance. Products provide about 55% of revenue while hardware maintenance accounts for nearly 30% and software maintenance, about 15%.

The company sells configured systems, which are bundled hardware and software products, as well as add-on flash, disk and hybrid storage and related operating systemS, original equipment manufacturer products, and add-on hardware and software.

The company's products include flash storage systems and the software for running those systems. Hardware and software fall under the company's Data Fabric platform designed to help customers store, manage, and access data. Hardware products include all-flash and hybrid flash arrays. Software systems include NetApp Cloud Sync, NetApp Private Storage (NPS) for Cloud, AltaVault Cloud-integrated Solutions, the NetApp Software Portfolio, and the ONTAP Storage Operating System. The ONTAP Cloud storage data management service runs on Amazon Web Services and the Microsoft Azure public cloud.

NetApp outsources the production of its hardware to third parties operating in the US, Mexico, Europe, and Asia.

Geographic Reach

NetApp has customers that it reaches directly or through partners in some 140 countries. The US is the company's largest market, with 55% of sales. The Europe, the Middle East, and Africa region accounts for about 30% of revenue, while the Asia/Pacific region generates the rest.

Sales and Marketing

NetApp has field sales offices in 45 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. Distributors handle a significant amount of NetApp's sales with Arrow Electronics Inc. and Avnet Inc. each accounting for some 20% of revenue.

Financial Performance

While NetApp's revenue declined for the third year in a row in 2017 (ended April), at $5.5 billion it was off less than 1% from 2016. Sales of the company's newer products rose 17% in 2017, driven by a 15% rise in unit volume of Clustered ONTAP systems. Sales of mature products fell about 21%, propelled by a 57% decrease in unit volume of 7-mode systems. Sales of add-on hardware, storage, and related OS products dropped 11%, while OEM revenues rose 4%.

NetApp's net income soared 122% to $509 million in 2017 from 2016 generated by lower operating expenses from cost reduction initiatives and a lower tax rate (23.5% in 2017, down from 33.6% in 2016).

The company generated cash flow from operations of $986 million in 2017, up from $974 million in 2016 from the higher net income.

Strategy

A large part of NetApp's strategy is to help its customers move their storage to the cloud computing environment and manage data between different environments, such as between private and hybrid clouds. The company has concentrated on developing software that helps customers manage data over various systems as storage hardware has fallen of favor with companies.

That means that instead of competing with cloud providers like Amazon's Amazon Web Services, IBM SoftLayer, and Microsoft's Azure, NetApp wants to make it easier for customers to use those services. NetApp is focused on 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 operates 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.

In 2017 the company restructured and reduced headcount (6%) for the second straight year. The 207 restructuring incurred charges of about $52 million that were mostly related to employee terminations. The company also reduced its R&D spending in 2017. It fell to about $780 million for the year, down from $861 million in 2016 and from about $920 in 2015 and 2014.

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 2016, the company acquired SolidFire Inc., a maker of all-flash storage systems based in Colorado, for $870 million. The purchase extended NetApp's presence in the all-flash array market. SolidFire products were incorporated into NetApp's Data Fabric strategy.

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Netapp, Inc.

1395 Crossman Ave
Sunnyvale, CA 94089-1114
Phone: 1 (408) 822-6000
Fax: 1 (408) 743-6106

Stats

  • Employer Type: Public
  • Stock Symbol: NTAP
  • Stock Exchange: NASDAQ
  • President and CEO: George Kurian
  • Vice Chairman: Tom Mendoza
  • Chairman: T. Michael Nevens
  • 2017 Employees: 10,100

Major Office Locations

  • Sunnyvale, CA

Other Locations

  • Scottsdale, AZ
  • Irvine, CA
  • Thornton, CO
  • Indianapolis, IN
  • Overland Park, KS
  • Wichita, KS
  • Tewksbury, MA
  • Waltham, MA
  • Minneapolis, MN
  • Durham, NC
  • Independence, OH
  • Cranberry Township, PA
  • Austin, TX
  • Dallas, TX
  • Ogden, UT
  • Vienna, VA
  • Calgary, Canada
  • Vancouver, Canada
  • Shanghai, China
  • Lyon, France
  • Toulouse, France
  • Fukuoka, Japan
  • Nagoya, Japan
  • Osaka, Japan
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