NetApp Insight 2017: Solution Announcements Will Reinforce Strategy Success and Further Fuel Takeover Rumors

C. Drake

Summary Bullets:

• At its 2017 Insight event, NetApp will reinforce its ability to help enterprises manage growing volumes of data in a hybrid cloud and IoT era.

• Investments in all-flash storage, converged infrastructure, and hybrid cloud solutions are increasing NetApp’s competitiveness relative to rivals Dell EMC, HPE, IBM and Pure Storage.

Next week at its 2017 Insight event in Las Vegas, NetApp is expected to announce several important product initiatives, amid growing intrigue about what the vendor’s future holds.

Foremost among NetApp’s announcements will be the general availability of its hyper-converged infrastructure (HCI) solution, which includes QoS-based profiling for different workloads and the ability to scale compute and storage separately. Other expected announcements include the integration of the new HCI offering with NetApp’s Data Fabric, and the latest version of NetApp’s ONTAP data management software. Alongside these announcements NetApp is expected to reinforce the message that it is a company committed and best able to help enterprises manage growing volumes of data in a hybrid cloud and Internet of Things (IoT) era.

NetApp is transitioning from being a provider of traditional storage solutions to instead offer “strategic solutions” that range from all-flash storage to data-management tools for hybrid cloud environments. In June 2017, the company announced its fiscal 2017 fourth-quarter results, which appeared to vindicate its ongoing transition. Although full-year revenue dipped slightly by 0.7%, this was largely due to the ongoing decline of revenue from NetApp’s Mature Solutions business (down by 20.6% YoY). However, this decline was offset by a 24% rise in revenues from Strategic Solutions, said to account for 70% of Q4 revenues.

To add further momentum to a strategy that producing positive results, NetApp began its 2018 fiscal year by announcing its new “Data Driven” marketing campaign, along with with the launch of several solutions and capabilities designed to help enterprise customers effectively manage data and extract value from it. The new solutions and capabilities, which include NetApp’s HCI offering, are intended to help enterprise customers realize three key value propositions: modernize their IT infrastructure; build and operate next generation data centers; and harness the power of hybrid cloud architectures.

In June, NetApp expanded its collaboration with Microsoft to offer hybrid cloud data services, and in September the vendor announced its “fourth-generation” all-flash array, specifically designed for performance-intensive workloads such as big data analytics, technical computing, and video surveillance. The EF570 all-flash system delivers up to 21 Gbps of bandwidth, 1 million sustained IOPS, sub-100 microsecond latency, and support for 100 Gb NVMe over InfiniBand to increase application responsiveness and to accelerate analytics. At the same time, NetApp unveiled its new Converged Infrastructure Solution for Data Analytics, a pretested, prevalidated reference architecture designed help users simplify Splunk deployments.

The development of its all-flash storage portfolio, together with investments in converged infrastructure, HCI and hybrid cloud solutions are steadily increasing the competitiveness of NetApp’s enterprise offerings relative to those of key rivals, namely Dell EMC, HPE, IBM and Pure Storage. However, these investments are also making NetApp increasingly attractive as an acquisition prospect, with rumors circulating that Cisco or even Lenovo may launch a takeover bid as part of an attempt to boost their software-defined storage capabilities. Past rumours that Cisco may bid to acquire NetApp were dismissed on grounds that Cisco’s focus was on emerging storage technologies, not the traditional ones that NetApp used to specialize in. But NetApp has changed considerably even within the past year, and is now arguably a better fit with Cisco’s growth priorities. Regardless of whether an acquisition bid transpires, it is not expected to have any impact on the current positive momentum NetApp is experiencing, and which will be emphasized at this year’s Insight event. Nor should customers feel they have any cause to respond – other than to keep watching.

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