Global storage provider NetApp has reported its full year and fourth quarter financial results, recording revenues for the 2011 fiscal year of $5.1 billion compared to revenues of $3.9 billion for fiscal year 2010. The company opened its representation office in Hungary in 2009. Andreas König, senior vice president and general manager responsible for the EMEA region, talked to the Budapest Business Journal about the results and the company’s plans to tighten relations with local resellers and service providers in Hungary.
Q: NetApp closed the 2011 fiscal year with good results (both quarter-on-quarter and year-on-year based results increased). Are you satisfied with the results?
A: I am extremely satisfied with the results: If you look at the numbers, our revenue grew by 30% compared to last year. Our growth in cash from operations was even higher with 38%. And we have closed FY11 with the largest market share gain in the history of NetApp, which proves that we are still the trusted number one storage choice for enterprise customers worldwide. All things considered, I think these are fantastic results.
Q: What were the main factors that contributed to such results?
A: There are some developments in the market around virtualization and cloud computing that put flexible storage high on every CIOs wish list. At the same time, storage is by far the biggest single cost factor in IT spending. These trends combined make enterprises look for smart solutions that help them build infrastructures that are future-ready and more efficient. With our portfolio and our strong partner landscape we are well-suited to this task.
Q: What impact will the release of the numbers have on the development of NetApp in Europe?
A: We do not comment on specific territory performance. That said, NetApp in EMEA has for quite some time been a true growth engine for the whole company. Our success last year signals that we will be able to continue to expand in all of Europe in terms of regions, office locations, and headcount.
Q: What were the main challenges NetApp had to face this last year?
A: Globally, the state of the world economy is still a major factor as it took quite some time for IT-spending to rise to pre-recession levels. As a company, we were able to continue our two-digit growth. That said, we still feel the strain of growing very strong in a very short amount of time. Today, we have over 10,000 employees. It is a great deal to integrate people and to get processes streamlined to make sure they fit our growth patterns.
Q: How has the takeover of Akkori and Engenio influenced operations?
A: Every acquisition poses unique challenges in terms of integration and operative adjustments. Especially Engenio had a larger impact as we added not only technological know-how and assets, but also another sales structure, which enhanced our OEM business significantly.
Q: Are you planning further major acquisitions in the near future? If so, what?
A: Growing our market share is a clear objective of NetApp and we are constantly evaluating opportunities to enrich our portfolio to help customers create a more flexible and efficient IT environment.
Q: NetApp has been present on the Hungarian market for quite a while and opened a representation office in 2009. Back then, you said that you wanted to increase significantly the 3% market share the company had on the Hungarian market. Have you managed to do so, and what is NetApp's market share now in Hungary?
A: During the last two years, the external storage market in Hungary has been shrinking. At the same time, NetApp managed to significantly increase its sales in Hungary. As a result, our market share, according to IDC, has more than doubled to 7.5%.
Q: Can you give me an overview of the current developments of NetApp in Hungary?
A: We are continuing on the momentum that we built in 2010. As companies start to adopt more and more new technologies like virtualization, virtual desktop infrastructure and cloud computing, they are turning to NetApp because our solutions are perfectly suited for such implementations.
Q: What are NetApp's future plans for Hungary?
A: NetApp has the goal of becoming the number one storage provider in EMEA by 2012. Hungary will do its part by driving local market share and striving for the country’s number one spot. To achieve this, we will enhance and leverage our partnerships – with local resellers, service providers and technology partners.
Q: What trends do you see for the storage market in Europe, and what trends can be seen in Hungary?
A: There are some major trends throughout Europe that currently shape the IT and storage landscape. Virtualization and cloud computing are definitely the most important ones. Other trends root in specific application requirements such as high-capacity video storage and streaming. Hungary is following the European IT mainstream with some delay. Server virtualization is fairly common but desktop virtualization and cloud type solutions are still in the trial phase. We expect these new solutions to become mainstream in Hungary within the next few years.
Q: In your opinion, what difficulties does the storage market face in Hungary at the moment?
A: The biggest issue is still lack of resources for IT deployments. Most companies have drastically cut back their IT budgets and are not able to invest in new technologies. To make matters worse, storage is still considered an infrastructure element instead of a business enabler: As the amount of data is growing dramatically, the costs of storing and managing data are spiraling out of control. By recognizing the potential that innovative storage technologies provide, storage can easily be considered a real asset instead of just a cost factor. This is a big shift from just a couple of years ago – IT and business decision makers will need to adapt.