NetApp Q1 numbers up but CEO notes public sector cuts in UK

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NetApp Q1 numbers up but CEO notes public sector cuts in UK

Microscope contributor

Public sector austerity measures are beginning to be felt by NetApp in the UK, according to its CEO Tom Georgens.

The storage giant has filed historic numbers for the first quarter of its fiscal 2011 with sales up 36% to $1.14bn (£730m) and profits up from $52m a year ago to $142m.

"This relative outperformance, probably our largest since the dotcom bubble burst, is convincing evidence that NetApp is indeed gaining share," said NetApp's bigwig Georgens in a conference call with analysts.

The sales output was balanced across all geographies he added but noted some areas of weakness in EMEA, specifically the UK and - of less importance to NetApp revenues - in southern Europe.

"We are certainly [hearing] talk of austerity on behalf of the European governments and probably the place where we saw that was in the UK. UK is a meaningful market for us, and a slowdown there clearly has some impact on us," he said.

In the last three months, NetApp added 600 heads to the 9,000 strong work-force and plans to continue recruiting sales and engineering heads.

But Georgens claimed its relative buoyancy in the market was also attracting new channel partners, "So I think that has expanded our coverage a bit".

Looking ahead, the storage firm anticipates "deferred tech refreshes" driven by the continued transformation of data centres, ably assisted by virtualisation.

"We remain similarly cautious looking into the upcoming quarter however our confidence and our competitive position remain unchanged and we intend to gain share independent of the macro factors beyond our control," he added.

With the UK government just starting the process of cutting departmental spending, NetApp is unlikely to be the last player in the IT industry to highlight the impact.


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