How Will NetApp’s Hybrid Cloud Focus Help Its Revenue Base Over Coming Years?

by Trefis Team
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NetApp (NASDAQ: NTAP) is a technology company that makes money selling data management hardware, software and solutions. The company competes with Dell, HPE, Pure Storage and Nutanix, among others, in the hybrid cloud data services and data management space. The company reported mixed earnings for the third quarter recently, with revenues coming in slightly below expectations even as improved margins helped it beat earnings expectations. Notably, the company’s cloud data services business registered strong growth.

Trefis highlights trends in NetApp’s Revenues over recent years along with our forecast for the next two years in our interactive dashboard, parts of which are highlighted below. We believe that the company’s top line will grow at over 5% annually over the next two years thanks to its increased focus on hybrid cloud offerings – up from the 3.8% revenue growth seen in fiscal 2019 (NetApp reports on the basis of a fiscal year ending April).

NetApp’s Business Model


NetApp Has 3 Operating Segments

  • Product: Product segment includes revenues generated from NetApp’s storage-based hardware and related software sales.
  • Services: Revenue is derived from the sale of maintenance of hardware sold.
  • Software maintenance: Revenue is derived from the sale of product upgrades, enhancements, and technical support.

We expect these divisions to contribute $4 billion (62.6%), $1 billion (15.3%) and $1 billion (22.1%) respectively to the company’s 2020 revenue estimate of $6 billion.


NetApp’s Revenue grew 11.4% over 2017 to 2019 to $6 billion and is expected to increase 11% to nearly $7 billion by 2021.

1) Product Division revenue growth of $1 billion over the next two years is likely to be driven by growth in hybrid cloud environments.

2) Services Division revenue is likely to remain flat owing to macro issues offset by adoption of hybrid cloud.

3) Software Maintenance Division revenue growth of $0.1 billion over the next two years is likely to be driven by increasing software component in the company’s offerings.

Additional details about how revenues for each of NetApp’s 3 Reporting Segments have trended over the years is available in our interactive dashboard.

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