Last week NetApp announced its Q2’13 earnings, and in isolation one might not find them overly compelling: revenue was up just 1% from Q2’12 with good cost control keeping margins healthy. However perspective and context is everything – and these results are indeed compelling for a couple of reasons.
- Versus the general competition in the market, aside from some specialists in the red-hot flash component/media world, the batch of recent quarterly results from traditional storage vendors has been underwhelming in general. The only two vendors to drive small actual revenue increases have been NetApp and EMC, whose single-digit improvements look good by comparison to the others.
- There are plenty of signs of good progress in NetApp’s attested areas of strategic-focus; the vendor talks about concentrating on delivering “cloud-integrated” (which includes convergence) and “flash-accelerated” (which includes multiple implementations) offerings… and it is doing pretty well in both endeavors.
We all know that there are abundant and aggressive changes taking place in the IT and storage worlds. For whatever reason (although maybe – and not necessarily positively - it has something to do with NetApp’s seemingly constant appearance in the top rankings of ‘Best Places to Work’!?), NetApp doesn’t always get the recognition it should for its moves to play hard and successful in this new world. Who knew, for instance, that it has shipped over 60PB of flash storage? Moreover nearly a third of that has been in all-flash arrays, an arena where NetApp’s detractors will have you believe it is a day late and a dollar short. Well, you don’t sell PB of all-flash by mistake to unwary buyers, so it must have done something right with the EF540! (indeed, in Q2 it increased its customer base for this by 40% and shipped over 200 units, and – this week – announced a new E550 version).
Clustered Data ONTAP is key to NetApp’s future, designed to act as the hybrid manager across multiple storage types. Yeah, the full-functioning product took longer than desired to come to market, but now it is making impressive strides: for instance NetApp counts over 40 of the Fortune 100 and over 100 of the Fortune 500 as Clustered Data ONTAP users. The expanding and expanded use-cases for the product are demonstrated by the facts that over 11% of the buyers are net-new NetApp users, while already 13% are repeat buyers of the product.
Clustered Data ONTAP also figures prominently in another key growth area for NetApp: 45% of FlexPod shipments (NetApp’s converged system offering, with a base of some 3300 users) are running on it. This is interesting because private cloud implementations invariably demand a non-stop architecture – and NetApp’s AutoSupport [real world data] shows that the install base of Clustered Data ONTAP is achieving six nines of uptime. My colleague, Mark Bowker, wrote early this month about the value that the three horsemen of FlexPod – NetApp, Cisco, and Citrix – bring to, and see in, their co-operative approach. You can read his blog here: the-power-of-3-citrix-cisco-and-netapp-deliver-data-center-to-the-desktop/index.html" target="_blank">The Power of 3: Citrix, Cisco, and NetApp Deliver Data Center to the Desktop. Of course, as mentioned, we live in a complex IT world that is full of flux – and so NetApp is also working collaboratively with the likes of VMware, Oracle, and Amazon. This approach is crucial for many vendors, and never-more-so than for a best-of-breed-emphasis company such as NetApp.
Of course, you also have to keep the lights on while growing these new areas. Thus, there are still plenty of FAS systems leaving the dock, and this week also saw a new aggressive price/performance E Series family member for the ROBO and SMB markets (the E2700 SAN) and significant updates to the E5500.
So, when we see any vendors’ results out of context, we can easily get the wrong end of the stick. NetApp not up much? Hmmm….it is actually up to plenty, and its relative results are not-too-shabby either!