Morningstar | All-Flash Arrays and Cloud Data Management Demand Position NetApp for Growth
NetApp is a leading provider of enterprise storage and data management solutions. It generates revenue by selling hardware and software term licenses in addition to support and maintenance contracts. New CEO leadership in 2015 prioritized a cloudcentric revamp of its operating system. Concurrent with a revitalized Ontap operating system, NetApp purchased SolidFire to penetrate the all-flash array market. We think these strategic imperatives have primed NetApp to prosper as IT teams adopt all-flash storage and migrate workloads to clouds. However, we have concerns that leading cloud vendors may eventually displace NetApp.Enterprises have high demand for NetApp's all-flash array storage for on-premises and private cloud data centers. We expect all-flash storage to generate solid growth for NetApp into the next decade as IT teams upgrade to the faster, higher-capacity-per-size, and lower-power-consuming storage solution. Our opinion is that hyperscale cloud providers will use white-box storage, but enterprises will prefer industry-leading hardware brands, like NetApp, for on-premises and private clouds. In our view, NetApp's services and support are desired for nonpublic cloud environments. To capture a portion of the public cloud spending, we believe that NetApp's focus on cloud-based data management software has made it a viable solution within multicloud ecosystems.NetApp aims to alleviate challenges associated with shifting data to public clouds via its hyperscale cloud provider and colocation data center partnerships. NetApp's software can hasten shifting workloads to public clouds and enterprises gain visibility, analytics, and data optimization possibilities. Since some workloads will not shift to public clouds because of latency, safety, or regulatory concerns, colocation partnerships provide enterprises with secure NetApp storage and the ability to use hyperscale providers' compute resources within a single site. NetApp is positioning itself to be a commonality for data management across the storage ecosystem. However, in our long-term view, we are concerned about market competitiveness and NetApp losing favor with hyperscale vendors.NetApp is the data authority for the hybrid cloud. The company's product, services and solutions portfolio include: cloud data services, which include the NetApp Data Fabric, which manages, secures, and protects the data of its customers from on-premises to public to hybrid cloud; cloud infrastructure, which helps customers build cloud-architected data centers; storage systems and software, which enables customers to modernize their IT architectures with cloud-connected flash to free the resources necessary; and support services, which enable a portfolio of technical services including independent support services, support account managers, residency services, and managed services.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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