NetApp (NASDAQ:NTAP) last week sent a message to its channel partners: “We have our mojo back in Flash.”
The storage vendor admits it is coming off the back of a “difficult” twelve months; it saw the departure last June of CEO Tom Georgens, as well as a number of high-profile execs in the following months, leading to a restructure at the top of the organisation and a new leadership team put in place.
Speaking to NetApp’s top European partners at its Partner Executive Forum in Lisbon last week, the firm’s new EVP worldwide field and customer operations, Henri Richard (pictured), admitted: “It’s been a difficult year, a challenging year. IT spending is under pressure, and NetApp was not immune to that reality,” he said, pointing to a decline in revenues to $5.5bn.
However he maintained NetApp is “still a solid company and an incredible brand”, adding “We have a momentum exiting FY16 that’s not reflected in these numbers.”
Richard claimed he is optimistic about NetApp’s potential to return to profitability – a claim buoyed by new data just released by IDC that has the vendor gaining impressive traction in the competitive Flash storage market. The analyst reports that NetApp is second only to EMC worldwide, and currently holds the number one spot in EMEA.
While the figures don’t yet take into account NetApp’s acquisition earlier this year of All-Flash array vendor SolidFire, the firm says its All Flash FAS (AFF) 8000 series, launched in June 2015, is the fastest growing product in NetApp’s history. Further, the purchase of SolidFire means NetApp can tap into the firm’s historic relationship with service providers, and expand the business into the new lucrative hunting ground.
Pointing to the IDC numbers, Richard said: “NetApp has got its mojo back in Flash...It’s quite a turnaround for a company from a couple of years ago, when I know some of the partners were questioning it from a Flash strategy standpoint.”
Gaining market share, he said, is “the only measure of success,” adding “It’s important because, frankly, it’s been a while since NetApp gained share.”
Partner priorities
Of NetApp’s $5.5bn revenue, 81.5 percent goes through channel partners, more than $4bn. Richard said he had directed his team that NetApp should have a “partner-first mentality”.
Richard went on to outline NetApp’s go-to-market priorities for FY17, which revolves around partners selling the vendor’s entire portfolio. “We have a lot of small competitors that have more of a niche product than anything else, and eventually it becomes complicated for their customers to manage a lot of small point product solutions,” he said.
The exec also said NetApp wanted to improve CRM integration, forecasting and planning as well as being more responsive to partners.
Logicalis’ chief digital officer for Europe, Chris Gabriel, attended the event and agrees that NetApp appears to be on the up once more. “Two years ago you may think we would be writing NetApp’s epitaph by now. This shows you should never count a person out too quickly,” he told Channel Pro.
“The execs seemed confident, they were open, they were looking forward, and they were buoyed by good market numbers coming out from the analysts. In my view, they are at the forefront of the third platform opportunity, and have some genuinely differentiated product, so for them and us this isn’t a time to look back at what could have been but to what could be.”
Other industry watchers remain slightly more cautious. “The change of CEO was much needed – the new focus that George [Kurian, Georgens’ successor as CEO] seems to be bringing in looks like it is having a positive impact,” commented Clive Longbottom, founder of analyst firm Quocirca. However, he warned that Kurian himself can’t imagine a turnaround until 2018. “Whether investors and Wall Street will wait that long remains to be seen.”
He added: “NetApp seems safe for the moment – but in a rapidly changing market, it will have to recreate the early days of the company where it was a major game changer, making EMC more honest and responsive to its customers and being innovative and fast in the market.”
Richard however, remains optimistic regarding NetApp’s future: “Frankly many partners have told me, that for a while at the water cooler, NetApp was not being the new shiny thing that people were talking about in the enterprise. Shame on us. We’re going to change that. I’m going to make sure we get this edge back on our brand.
“It’s one of the better brands in the industry, we just need to give it back its shine,” he said.
NetApp takes a swing at Flash rivals
