After being named the leader in the mid-range and high-end modular disk arrays last month by research firm Gartner,  NetApp (NASDAQ:NTAP) is now focusing on mid-market businesses in India and has plans to increase its revenue from the segment from 21 percent in 2011 to 30 percent in 2012. The company has strengthened its low-priced storage product and solutions portfolio for midsize businesses and aims to add about 250 mid-market customers in the next 12 months in India.  NetApp is currently the world’s third largest player in the external disk storage systems market behind EMC (NYSE:EMC) and IBM (NYSE:IBM).
We currently have a $46.73 Trefis price estimate for NetApp, about 30% above the market price.
High Demand for Affordable Storage Solutions in India
In 2011, NetApp’s market share stood at 13% of the total storage market in India estimated at $600 million. With nearly 23% of the IT budget of midsize businesses going into storage, the market opportunity is huge. However, with increasing business demands and the need to contain expenses they are still facing challenges and need affordable yet enterprise-class solutions that can be scaled rapidly.
NetApp aims to targets these businesses, particularly in the manufacturing, media and healthcare verticals with solutions that are priced and packaged to address this growing market.
Storage Hardware Worth 40% of NetApp
We estimate NetApp derives nearly 40% of its value from the storage hardware business as opposed to its rival EMC which is more reliant on storage software. This makes it all the more important for NetApp to make the most of growth opportunities in new and emerging markets even as demand in Europe slows down.
Given NetApp’s strong presence in the mid-range market, we believe, it’s rightly positioned to make the most of these opportunities.Notes: