The fall in OEM revenue stems primarily from a continuing -- and expected -- downturn in sales through IBM, which is currently in the process of selling its x86 server business to Lenovo, NetApp's Georgens told CRN.
The impact from the sale of IBM's x86 server business to Lenovo, as well as other reported plans by IBM to sell other parts of its business, on NetApp is not yet clear, he said.
"We'll see how it ultimately transpires," he said. "IBM is evaluating a lot of things. Some would work for us, some against us. But if it's interested in further partnerships with NetApp, we are, too."
Georgens also told CRN that NetApp had record sales of its E-series storage appliances, including the new all-flash version, the EF550.
"All-flash storage is doing well for us," he said. "The EF-series are doing well where performance counts, especially in database applications. We're also seeing a fair amount of all-flash FAS-series of appliances. We don't have a specific part number for them, but their sales are not insignificant. They're strong in the VDI [virtual desktop infrastructure] market."
Georgens told CRN that NetApp's upcoming new FlashRay all-flash storage line is not expected to cannibalize the company's existing all-flash EF- and FAS-series sales.
"FlashRay will be focused on data management," he said. "There's nothing else mature in the market with this focus."
Georgens said during the analyst conference that FlexPod, the joint converged infrastructure reference architecture offering from NetApp and Cisco, is continuing to do well.
The FlexPod customer base in the third quarter grew about 75 percent over the past year, and NetApp during the past quarter added a Microsoft option to go with what had been a VMware-centric offering.
NetApp is looking to be a part of the cloud management market, Georgens said.
While cloud computing is not yet mainstream, NetApp is focusing on how to help customers manage data as they move to the cloud.
"The company who can best manage data in the cloud will be the winner," he said.
When asked about the possibility that NetApp might be acquired, a possibility that regularly makes headlines, Georgens said everything depends on the will of the shareholders.
However, he said, shareholders have been doing pretty well with NetApp so far.
"Our ability to compete well and win, if it continues, will generate shareholder value," he said. "An acquisition is not something we need to do to generate shareholder value."
Looking forward, NetApp expects fiscal fourth-quarter revenue to be between $1.62 billion and $1.72 billion, or slightly down from the $1.72 billion the company reported last year.
PUBLISHED FEB. 12, 2014