Different regions have different dates to end Daylight Saving Time for winter. Most European countries are changing time on October 27th, while the USA will only change on November 3rd. As a result, next week Las Vegas will only be eight hours behind Western Europe, as opposed to the traditional nine hours. This is good news for those people traveling from this side of the pond to attend NetApp Insight 2019 in Las Vegas. It will be a little easier for them to listen to NetApp’s latest announcements and roadmap for the next year. Talking about this event…
Last year my colleague James Gallegos wrote a blog post about Some Questions To Consider If You’re Attending NetApp Insight. It’s interesting to look back and see if there has been any improvement on these questions.
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More Questions Come to Mind
In addition to the above questions, which are still very valid 12 months after James’ initial post, there are a few other concerning matters one should look at about NetApp.
All Flash Array Business
NetApp Q1FY20 earnings summary (6) highlights a -24% year over year annual run rate decline of their All Flash Array business; from $2.2B in Q1 FY19 to $1.7B in Q1 FY20. (7)
Does this mean that NetApp sales force has finished churning their installed base of spinning disks arrays and that they are less successful in gaining new customers?
Quarterly Revenue Trend
The chart below depicts NetApp year over year quarterly revenue numbers for their last fiscal quarters. The trendline is definitely going in the wrong direction.
At Pure we’ve been achieving +28% year over year growth in our most recent quarters, Q1 and Q2 FY20. This consistent growth will indeed help us in fueling our innovation and in investing in field people to be closer to even more customers and partners.
Research & Development (R&D) Investment
Talking about fueling our innovation, the chart below depicts the R&D investment as a percentage of revenue, comparing NetApp to Pure Storage.
Sources: NetApp FY19 Supplementary Commentary: revenue $6.15B, R&D $827M, = 13% (8)
Pure Storage FY19 Annual Report: revenue 1.359B, R&D 0.35B, = 26%
I can imagine readers are thinking: “Yeah, that’s a percentage comparison and the actual absolute number is bigger…”. Well, that’s actually correct, and the next question I would ask is:
How many products and solutions need these R&D dollars?
Innovation does matter! Pure has been on this innovation journey for 10 years bringing this simplicity of design, ease of management and scale to our customers.
Being based in EMEA, I would also add to this list of concerning matters, the new “Partner-Led” Countries business model that NetApp has announced to their partners. The new business model became effective May 1, 2019, in Africa, Turkey, Eastern Europe, and most of the Nordics (except Sweden).
In these countries/regions, local distributors and partners have now to pick up all the tasks like sales, pre-sales and professional services, which were driven by NetApp people before.
Leaving the primary business responsibility to local distributors and reseller partners, with limited local support from a vendor, is the opposite of a partner-centric business model.
For existing customers in these regions, this also means minimal local and direct touch from the vendor they procured the technology from. They would have possibly made a different decision if they knew there would be no local presence from the vendor in their own country.
This article covers how some partners reacted to this announcement.
As a 100% channel-centric company, Pure Storage believes in one simple credo: the success of our partner is the success of Pure Storage. This means we train and support our partners and we don’t let them do the job alone! We support them locally wherever they are, in the largest as well as in the smallest countries we’re targeting around the world.
If you are planning to go to Vegas next week, keep the above questions and concerning matters in mind. Try to get clarity on some of these points. If you are still unsure when you are back, do not hesitate to reach out to your Pure Storage value-added-partner or your Pure account team. We would be happy to share with you why, at Pure, we are investing in a Modern Data Experience and what we mean by “simple, seamless, and sustainable.”
I would suggest you also review some of the highlights from Pure//Accelerate that we hosted in Austin, TX, USA a couple of weeks ago.
(1) Powerful Program Helps You Evolve Your IT Technology: NetApp NextCredit