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These Business Segments Could Drive NetApp’s Revenue

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Strategic solutions business continues to be important

US-Based (SPY) NetApp (NTAP) has aligned its strategic solutions to meet the IT (information technology) demand of its enterprise customers. In the last four quarters, the strategic solutions business has accounted for 65% of product revenue while the revenue growth has been 22% YoY (year-over-year).

In fiscal 3Q17, NetApp’s strategic solutions business accounted for 65.3% of its net product revenues, and the revenues rose 13% quarter-over-quarter to $512 million. This growth was offset as revenue from NetApp’s mature solutions segment fell 18% YoY in fiscal 3Q17.

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Clustered Data ONTAP

Clustered ONTAP is NetApp’s scale-out storage solution, which the company launched in 2013. This solution allows businesses to cluster a variety of NetApp storage array models, resulting in a unified storage pool. Clustered ONTAP users rose 90% YoY in fiscal 2016, and units shipped rose 24% YoY in fiscal 3Q17.

All-flash array

NetApp’s all-flash array business rose 160% YoY in fiscal 3Q17 with an annualized revenue run rate of $1.4 billion. During the company’s last earnings call, CEO George Kurian stated, “Flash is the mainstream choice for new on-premises deployments as customers seek to lower total cost of ownership while gaining greater speed and responsiveness from key business applications.”

NetApp was also the fastest-growing all-flash vendor in 2016.

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