NetApp CEO Says Server Cos 'Losing Ground' In Storage Market
01 7월 2011 - 12:42AM
Dow Jones News
Big tech companies that provide servers are "losing ground" to
stand-alone storage companies and will have trouble maintaining
their investments in the sector, NetApp Inc.'s (NTAP) chief
executive said.
Tom Georgens, speaking during a meeting with analysts, said
companies like Hewlett-Packard Co. (HPQ) and International Business
Machines Corp. (IBM), which sell servers along with a series of
other products and services, are losing traction in the storage
market--despite recent acquisitions--to companies that focus
specifically on that sector.
"Almost no one buys storage from a server company unless they
buy their servers there," Georgens said. "Over time, server
companies will have difficulty sustaining investment in this
space."
He added that NetApp is taking share not only from tech
bellwethers but also from rival EMC Corp. (EMC) in the core storage
business, excluding EMC's Data Domain backup and recovery business.
EMC and NetApp battled over Data Domain a few years ago, with EMC
eventually succeeding in buying the fast-growing company. Georgens
said much of EMC's revenue growth is attributable to Data
Domain.
NetApp shares, up 35% over the past 12 months, climbed 1.1% to
$50.53 in recent trading.
The Sunnyvale, Calif., company has been benefiting from the
growing need for space to store data at businesses and
organizations, taking share from rivals and posting one of the
strongest growth rates in the tech industry with its 20% compound
annual revenue growth rate over the past five years. But
competition is intensifying as big tech companies--including H-P,
IBM and Dell Inc. (DELL)--scoop up smaller players and gain a
stronger foothold in the market.
NetApp recently made an acquisition of its own, buying LSI
Corp.'s (LSI) external storage systems business, Engenio, for $480
million to broaden its offering of high-end products and expand its
customer base. Georgens on Thursday said NetApp will continue to
make small acquisitions.
He also reiterated NetApp's plans to gain share and position
itself as a key supplier of storage for cloud computing and
virtualization, which makes data centers more efficient by running
multiple computers' operations on a single server.
In addition, Georgens said customers prefer to buy "best of
breed" products rather than to buy a complete stack from the larger
tech giants.
"Integration is going to be [the server companies'] value
proposition," he said. "However, customers know what they're
gaining in integration, they're giving up in best of breed. Server
companies are not the best of breed at anything."
-By Shara Tibken, Dow Jones Newswires; 212-416-2189;
shara.tibken@dowjones.com
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