How NetApp Will Benefit From Entering The BYOD Market

by Trefis Team
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Quick Take

  • NetApp reported a total revenue of $1.63 billion in its Q3 earnings
  • It has acquired mobile virtualization developer ionGrid
  • This acquisition opens up the BYOD market for NetApp

NetApp, (NASDAQ:NTAP) which reported its Q3 earnings on February 13, also announced that it has acquired ionGrid, a developer of mobile virtualization software. This acquisition will enable it to enter the bring-your-own-device (BYOD) market as well as add mobile virtualization capabilities to its existing storage software. NetApp designs solutions for storing, managing and protecting business data through enterprise storage and data management software, and it also provides hardware products and services. NetApp also estimates Q4 revenues to be in the range of $1.7-$1.8 billion and EPS is expected to be $0.65 to $0.70 a share. [1]

We explain some key business developments below.

See our full analysis on NetApp

BYOD is a growing market in virtualization with NetApp competitor EMC having a majority market share through VMware. Considering the fact that mobile and tablet markets are fast growing and potentially much larger markets, we expect mobile virtualization to become a key driver for NetApp. This acquisition opens up the BYOD business for NetApp, which mainly involves management and monitoring of critical data through mobile devices. ionGrid develops only for iOS, and its Stratos platform, provide cloud-like features to mobile phones even though the app isn’t cloud-based. During the launch of the app, it was priced at $15 per user per month. [2]

Flash Storage – A Key Growth Driver May Benefit From Virtualization

NetApp has a strong flash portfolio, and as of Q3 2013, it has shipped over 36 petabytes of flash deployed over 20,000 systems worldwide. Flash provides high speed data performance and the company has introduced a portfolio of hybrid and SSD-based solutions, which has seen strong traction in the market. In Q3, bookings for systems with Flash pools, a hybrid disk and SSD solution, grew 67% sequentially despite the costs associated with it as companies are willing to pay for the enhanced performance. We can see the hybrid solutions becoming a major driver in 2013.

We currently have a $37.50 Trefis price estimate for NetApp, which is slightly higher than its market price.

Understand How a Company’s Products Impact its Stock Price at Trefis

Notes:
  1. NetApp Q3 Results, www.sec.gov, Feb 13, 2013 []
  2. NetApp Nabs BYOD Developer, www.thevarguy.com, Feb 19, 2013 []
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