NetApp Company Review
NetApp was started in 1992 in Sunnyvale California and was originally named Network Appliance. The company originally focused on network attached storage devices and has since broadened its presence in the larger enterprise storage market. Its major products are focused on enterprise data storage and filer systems (CBR, 2010). These software and hardware packages allow data management, and security which can increase a company’s performance, profitability, and productivity. NetApp is part of the data storage device industry where a few companies control a majority of the market share. The main competitor of NetApp is EMC; which is a larger more established company with a diverse portfolio of products. There is heavy competition due to the size of these companies; innovation and R&D are a major driving factor in this industry (Egge, 2010).
Company Structure & Position in the Market
NetApp’s income statement is broken down into 3 parts for revenue Products, Services, and Software entitlements and maintenance (NetApp, Inc. 2010). Products are the largest part of NetApp’s annual revenue. They focus on enterprise solutions and have and strong network of partnerships that help them maintain a strong presence in the market. Services are the second largest part of annual revenue. Their service business focuses on customer education, training, and business and support solutions. This service can help take the client through every part of service delivery and implementation. The smallest part of NetApp’s revenue comes from their Software entitlements and maintenance they provide. This part of their business is in line with their service support they offer. NetApp offers product upgrades, extended warranties, enhancements, maintenance and support on bug issues. Acquisitions are a large part of this industry with many market leaders utilizing this strategy to gain a stepping stone into new markets. Net App is among the major players in this industry making up about 10.3% of the market share (Dignan, 2011).
NetApp’s main competitor is EMC which holds about 26% of the market share (Dignan, 2011). EMC has a broader focus which allows rivals, who have formed out niche markets, to have an opportunity of growth. NetApp has chosen product focus rather than product diversity but also targets innovation and development. They have been recognized by Forbes magazine in its top 50 most innovative companies in the world (Forbes, 2011). NetApp is a leader in its sphere of influence and helps shape the industry with other market leaders. As the trend of cloud computing grows NetApp will be in the front of the pack for this new era.
The strength of NetApp comes from their market strategy and enterprise business focus. They have since broadened there product lines, service and partnerships. These partnerships have allowed NetApp the ability to integrate into other major companies products such as Microsoft and Oracle (NetApp Corporate, 2010). These opportunities have allowed NetApp to continue to create and offer new devices with enhanced capabilities to evolve with time. The growth they have experience have also brought the company culture to the surface. Fortune magazine has rated NetApp in the top 5 places to work for the past 3 years, which is important because in this industry reputation matters (CNN, 2011).
NetApp has shown weakness in the diversification in the storage industry as a whole. As reported this year 2011 they have cut their 3rd quarter outlook due to a slowdown in business on 9 of their large accounts (Bylund, 2011). This is a direct weak point of NetApp as they are reliant on a handful of accounts to stay competitive in their business. Their supply lines are diversified but natural disasters as in the Thailand flooding can still have a drastic effect to the overall business...