7 Jun

Why NetApp Is Optimistic about Core Business Opportunities

WRITTEN BY Aditya Raghunath

Strategic Solutions’ revenue contribution

Since fiscal 2016, NetApp (NTAP) has focused on its Strategic Solutions and Data Fabric segments to drive revenues. Strategic Solutions accounted for 65% of the company’s net product revenue in fiscal 2017, as compared to 56% in fiscal 2016.

Why NetApp Is Optimistic about Core Business Opportunities

Strategic Solutions revenues rose 24% YoY (year-over-year) in fiscal 4Q17 to $596 million and 17.2% YoY to $1.97 billion in fiscal 2017. The firm has aligned its strategic solutions to meet the demands of IT (information technology) enterprises, and the business is growing at a faster rate than peer companies are seeing.

Clustered ONTAP and NTAP’s installed base

US-based (SPY) tech (QQQ) firm NetApp introduced its scale-out storage solution, Clustered ONTAP, in 2013. ONTAP is NetApp’s flagship operating system and is deployed at 50% of the firm’s installed base. The solution was deployed on 95% of the FAS (fabric-attached storage) systems that were shipped in fiscal 4Q17, which represents a 50% YoY rise. Demand for clustered ONTAP continued to rise in fiscal 4Q17 as shipments rose 80% YoY.

All-flash array

NetApp is still the fastest-growing player in the all-flash array segment as well, outpacing peer companies as well as the overall market. The company’s all-flash array revenues have grown 160% YoY, with an annualized revenue run rate of $1.4 billion.

NetApp’s pivot toward these high-growth areas since fiscal 2016 has generated significant revenues for the firm. NetApp believes its total addressable market will grow at a CAGR (compound annual growth rate) of 15% to reach $40 billion by the end of fiscal 2021.

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