Channel fuels NetApp sales rise


Channel fuels NetApp sales rise

Microscope contributor
By Billy MacInnes

A 16% growth in channel sales has helped contribute to record third quarter revenue and income for network storage and data management company, NetApp.

The company also reported that sales through the channel accounted for 70% of total non-GAAP revenue of just over $1bn and income of nearly $144m in the third quarter ending 29 January 2010. Distributors Arrow and Avnet contributed 16% and 12% of revenue respectively.

Commenting on the results, Tom Georgens, president and CEO said the NetApp team "demonstrated remarkable execution this quarter", pointing to record revenues, record profits and record earnings per share. 

"The company produced double-digit year over year revenue growth and our operations team shipped a record number of systems, despite persistent supply constraints," he added.

"I am very pleased with the breadth of our progress. Business levels grew in every major geography, we gained momentum in both our channel and our direct business, and clearly gained market share this quarter."

Total system shipments grew "dramatically", according to the company, rising 34% year over year and big growth from new mid-sized enterprise business had driven "huge demand for our low end systems through the channel."

The third quarter was the first in which unified systems, sold with both a SAN and NAS protocol, surpassed NAS-only systems. In virtualised server environments, NetApp found 42% of its machines were running NAS and 58% were running SAN.

On a geographical basis, EMEA sales grew 7% to account for a third of total revenue but the Americas remained the dominant market, contributing 57% of total revenue and growing 26% year over year. 

Product revenue was up 17% and accounted for 61% of total sales. Software entitlements and maintenance rose by 9% and made up 17% of total revenue while service revenue was up 17% and contributed 22% of total sales.

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