NetApp CEO George Kurian On AI, Cloud Growth, Memory Shortages And What’s Next

‘Data will grow in an accelerated manner as people start to do more AI inferencing and using agentic AI, because AI models benefit from having better-quality, well-organized data. So they will keep more data around, as well as version it and generate it to help with business processes,’ says NetApp CEO George Kurian.

NetApp CEO George Kurian told CRN that the company’s strategic priorities remain focused on AI and cloud as core growth engines.

“We want, given our privileged position in the hyperscaler ecosystem, to capture the momentum that customers have and the hyperscalers have on using hyperscaler tools and so further accelerate our cloud business alongside the hyperscalers,” he told CRN in an exclusive, wide-ranging interview last week. “We really want to grow in all-flash, in cloud, and in AI, and leverage the full range of options, including Keystone, to meet customer needs.”

Kurian shared insights on how the San Jose, Calif.-based developer of storage and cloud technology is navigating the rapidly evolving landscape of AI, cloud, and enterprise infrastructure.

As the global IT community faces both unprecedented opportunities and persistent challenges, including memory and storage component scarcities, the transformative potential of AI, and shifting macroeconomic conditions, Kurian said NetApp remains committed to driving innovation and helping customers leverage new technologies.

[Related: NetApp CEO On ‘Bringing AI To Your Data,’ Changing H-1B Visa Rules And The Firm’s Channel Strategy]

Kurian also pointed to NetApp’s ongoing investments in cyber protection as a key differentiator in the competitive storage business.

Regarding the future of on-premises enterprise data centers, Kurian was optimistic about growth prospects, particularly as memory and component shortages one day begin to ease.

“Data will grow in an accelerated manner as people start to do more AI inferencing and using agentic AI, because AI models benefit from having better-quality, well-organized data,” he said. “So they will keep more data around, as well as version it and generate it to help with business processes. We see the industry as being in the second inning of a nine-inning ball game.”

There’s a lot going on at NetApp and in the storage and AI industries. To learn more, read CRN’s complete conversation with Kurian which has been lightly edited for clarity.

Your third fiscal quarter 2026 looked great. What are your key takeaways from the quarter?

I think we are hitting on all of our growth areas. We have done really well in public cloud with the divestiture of Spot. The business grew 17 percent year-on-year. Our first-party cloud and marketplace were up 27 percent year-on-year, and that is becoming a bigger and bigger part of our cloud business, and so we should see continued strong performance there. Our all-flash array sales grew 11 percent year-on-year, hitting record quarterly revenue of $1 billion. Our AI business grew to 300 wins in the quarter, up from 100 a year ago. And storage as a service, our Keystone offering, grew 65 percent year-on-year. So good performance all around. Our operating income and earnings per share were at record highs. So we feel good. We’re focused. We’re executing well. We are aligned to where customers are spending.

Given all that, how do you define NetApp nowadays?

NetApp is the intelligent data infrastructure company. We help clients protect their data and use it with more and more advanced applications for their business’ competitive advantage. One of the examples of those advanced applications is the work that we did with Amazon Web Services, where AWS and NetApp announced a capability called S3 Access Points, which is a technology that we had worked with them for quite a while. It allows us to seamlessly connect customer data, whether it’s on premises or on the Amazon cloud, directly into the AI applications that Amazon has, like Amazon Bedrock and SageMaker and a whole suite of others, without having to do any transformation or kind of modification of the data. It can go straight into the Amazon AI solutions. That’s an example of new innovation that we continue to bring to the market.

Can we expect that type of innovation between NetApp and, say, Google or Azure?

Yes, you should see us make it available for a broad range of applications.

A major issue in the IT industry today is the shortage of memory and storage media: SSDs, hard drives, and so on. How is that impacting NetApp?

We have several things we are doing, first to guarantee access to supply, and second to make sure that we position the right offering for the right use case for customers. I’ll talk about the first. We have worked with the supply chain for decades to both have access to multiple sources of supply to provide assurance to our suppliers of long-term demand, as well as to be able to have long-term supply commitments from our suppliers. And that’s true for both SSDs and HDDs.

The second is that we are working with our clients to be able to position the right technology: all-flash for where you need really high performance, and because we have a sophisticated set of hybrid flash products to position that combination for performance and capacity. And that allows us to have an advantage over many players who don’t have hybrid flash solutions. The second is for customers who say prices have gone up and prefer to rent rather than to buy, we’ll position Keystone or our cloud offerings to them. We’re working to educate our customers about the full range of opportunities.

In terms of working with suppliers, any long-term storage industry vendors could probably say the same. And yet, we see shortages and rising prices. Is there something unique that NetApp is doing?

We have raised prices, as is customary in the storage industry. When media costs go up, we raise prices, and when media costs go down, we lower prices. That has been the history of the industry. I cannot comment about what other people are doing. I can only comment about what we are doing. And we have experience working with the supply chain for many years. I think in hard drives, we are not buying the hard drives that are constrained from the capacity standpoint, the hyperscaler drives, for example. Our supply of hard drives is a little different than what the hyperscalers are buying. And so that’s one of the things that I want to just make sure you and your readers understand that it’s a dynamic environment. There’s no assurance of continuity, but we are working hard to make sure that we can match customer demand to supply, every day of every week.

Does NetApp raise prices on a rolling basis as component prices go up in this environment, or has the company tried to cushion price increases?

You have to do it in a methodical manner, balancing disruption for customers with the cost increases that we get from suppliers. So we have tried to make sure there’s some degree of predictability to the pricing, but we cannot afford to carry the price increases for a long duration of time, so there’s a little bit of matching between the two, and sometimes You work hard to explain those price increases to customers and make sure they understand that we would not pass on those price increases if we didn’t see those increases or even higher increases come to us.

What is NetApp’s price quote validity time currently?

I think it varies depending on the kind of customer. I think there are certain customers for whom we have a short contracts like the US government, and so it just varies by customer.

What is NetApp doing in 2026 to change your product offerings, your services offerings, in relation to changes in the AI industry?

I think we made a set of really strong announcements at our NetApp Insight conference at the end of last year where we announced the AFX disaggregated storage offering for super-high performance AI training and AI cloud service providers. We said on our earnings call, we had a neocloud win. We had a bunch of enterprise wins, and that was ahead of our target. It takes time for AI solutions to get qualified, but we are pleased with the momentum and the interest. We also announced a suite of capabilities called the AI Data Engine that makes it easy for customers to take raw data, organize it, curate it, and prepare it for being AI-ready data. The AI Data Engine will be generally available this quarter. We’re going to follow through and deliver more capabilities in those roadmaps. I think those are the key areas of focus.

What are some other strategic priorities for NetApp for 2026?

I think we have clear focus and momentum in our core bets. [For AI,] we want, given our privileged position in the hyperscaler ecosystem. to capture the momentum that customers have and the hyperscalers have on using hyperscaler tools and so further accelerate our cloud business alongside the hyperscalers. We really want to grow in all-flash, in cloud, and in AI, and leverage the full range of options, including Keystone, to meet customer needs at a time where there’s kind of an infrastructure scarcity. I think those are the key areas of focus. We have a lot of capabilities that we are bringing, including advancements in cyber protection, to differentiate our offerings relative to others in the market.

Sometime in the future, when the memory and component shortages ease, do you see the enterprise data center business, not hyperscaler data centers, but on-premises enterprise data center business growing?

Data will grow in an accelerated manner as people start to do more AI inferencing and using agentic AI, because AI models benefit from having better-quality, well-organized data. So they will keep more data around, as well as version it and generate it to help with business processes. We see the industry as being in the second inning of a nine-inning ball game. And because you will want to apply those AI capabilities wherever the data is created, you will see the AI capabilities driving data infrastructure wherever the business processes are activated. For example, on a manufacturing shop floor, you’re not going to pipe data from the shop floor into a cloud and then back to the shop floor. You’ll probably do inferencing right there on the shop floor. And so we do see data center storage world growth as AI becomes more promising.

As data becomes more and more focused on AI and cloud and some of the other things that you mentioned, how does that change how NetApp works with indirect sales channels? How do partners change?

Many of these areas require consultative, advisory approaches for the partners, as well as what we call forward-deployed engineering, where you work with customers to get them to adopt the capabilities that your providers are making available. We’re educating the channel about our offerings, and we are looking to partners for more opportunities, but also need to invest in these newer capabilities.

Another thing we’re watching in the industry is how employment changes as AI starts taking over certain functions or against other macroeconomic issues. How are these issues impacting NetApp’s head count?

We have been super disciplined about managing our head count over many, many years. I think you can see that in the latest financial quarter results where our operating margins were north of 31 percent. We are very disciplined about not over-hiring and then having to do significant restructurings. We see AI providing us with the capability to do more, for example, deliver more innovation to the market and faster. And so we’re looking at opportunities like that. And productivity is built into our operating model. Every year, we look at areas of opportunity and bring productivity to those parts of the business by simplifying the business, by focusing on what’s most important, and not doing what’s less important.

Another big macro question: How are the attacks against Iran impacting NetApp’s Middle East business?

It’s too early to comment. Our focus right now is to make sure our customers have continuity of business operations. We have many offices in the Middle East, and we want to make sure our employees are safe and protected. I think that’s our focus so far. Otherwise, it’s too early to comment.

So far, we are super grateful we have not had any issues with either the clients that we work with or our own employees. We have a 24X7 monitoring process in place.