NetApp splashes out $1.5bn to pick up Data Domain

by Paul Kunert

NetApp has put $1.5bn on the table to buy de-duplication specialist Data Domain as consolidation among storage vendors continues unabated.

Details of the proposed purchase were outlined after NetApp revealed fiscal Q4 revenues of $880m, down 6% year-on-year and an 11.7% increase in profits to $103m, boosted by rises in software and services sales.

Dan Warmenhoven, NetApp CEO, said in a call with analysts it planned to operate Data Domain as a separate product line and management and development organisation when the deal closes in 60 to 120 days.

“We see a lot of cross-sell and up-sell opportunities,” he said, “with less than 6% overlap on our existing storage 5,000 accounts, the combination of our two companies should help us increase penetration within our customer base”.

The similar nature of the product models – both have a software solution wrapped around standard commodity components – would speed and smooth the transition, said Warmenhoven.

In a statement, Frank Slootman, CEO at Data Domain, said NetApp’s distribution channel and customer base would accelerate sales.
The companies were unable to make additional comments before the deal closes.
During NetApp’s final three months of fiscal 2009, product revenues fell 20% year-on-year to $506m, while software and services sales went up 21% and 22% respectively to $165m and $210m.
Steve Gomo, CFO at the firm said it had seen a “marked increase” in the number of one year renewals of software entitlements and services maintenance contracts.
“Many customers looked to defer capital purchases and extend the life of their current systems during the economic downturn and as a result current period purchases of systems slowed,” he said.
The firm said the restructuring plans announced at the beginning of Q4 in terms of spending and headcount reduction were “tracking to our expectations”. The number of employees fell by 407 in the quarter to 7,976 worldwide.

Despite the bold move to buy Data Domain and improving signs in the market - based on sequential increases in revenues and resurgence in mid-range and enterprise accounts - the company was less daring on fiscal Q1 predictions.“Given the limited visibility that persists in the macro environment we will not provide revenue guidance for the first [fiscal] quarter,” said Gomo.

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NetApp heralds mid market channel focus

by Simon Quicke

NetApp has heralded its 1,000^th reseller as evidence of its ability to service the mid market with its MSE product line.

Earlier this year the vendor took some flak for putting the emphasis on its mid market products giving rivals the chance to suggest it had pulled out of as commitment to the SME market.

At the time of the decision to kill off the S series the vendor underlined its plans to focus on the MSE products with an assurance that resellers would find a healthy market waiting for them among mid-sized companies.

Eric Saillard, director of EMEA channel at NetApp, said that its Silver programme, which has just had the 1000^th reseller sign up was aimed at the MSE market place and the growth of its channel numbers indicated the strength of that market.

Jason Beeson, solutions director at Hammer, said that NetApp had set out a simplified process for the channel and the features of the products appealed to a wide number of customers.

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ICT sector leads the way in flexible working

By Alex Scroxton

An independent survey of 4,500 employees commissioned by mobile network and business comms provider Orange has found that telecoms and IT companies are increasingly practicing what they preach when it comes to flexible working.

The survey, which was conducted by YouGov, found that 39% of businesses in the ICT industry offered their employees the option to work from home, beating the media and marketing sectors, and law, finance and banking, with 31% and 26% respectively.

Predictably, industries that depend on presenteeism, such as transportation, manufacturing, hospitality and retail scored lowest.

However, the results of the survey do not yet reflect last month’s legislation which expanded the right to request flexible working to cover over 10 million Britons with children aged under 16, paving the way for massive take-up of mobility and unified communications solutions.

Orange UK vice president of business Paul Tollet said businesses had no need to be scared of introducing flexible working options.

“[It] doesn’t have to involve significant financial investment, just a clear policy to ensure it is offered fairly and a willingness to provide employees with the tools they need to get the job done,” he said.

The survey also uncovered a worrying disconnect between HR and IT departments, with 50% of employees who were part of a flexible working scheme grumbling that they weren’t being given the right tools in terms of laptops, dongles and the like.

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