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CEO Says NetApp Will Soon Introduce Hyper-Converged Infrastructure Solution Based On All-Flash SolidFire Tech

NetApp chief executive George Kurian said the hyper-converged offering will address the needs of next-generation data centers and hybrid clouds.

NetApp is planning to shortly enter the fast-growing hyper-converged infrastructure market with an all-flash offering based on its SolidFire technology.

NetApp's CEO George Kurian, speaking to financial analysts on Wednesday while reporting the company's third fiscal 2017 quarterly results, said NetApp will be unveiling a hyper-converged infrastructure solution based on NetApp's SolidFire all-flash storage technology that will be tied to the hybrid cloud.

The hybrid cloud is the true architecture of the data center going forward, Kurian said.

[Related: IDC: Converged Systems Revenue Up, But Cautions Linger]

"By offering these [hybrid cloud] features, we will re-define the hyper-converged market like we did the all-flash storage market … Soon we will introduce a next-generation hyper-converged infrastructure solution."

Kurian said first-generation hyper-converged infrastructure solutions focus more on single applications, and address a lower end of the market. NetApp, he said, will focus more on providing easy integration into customers' data center and hybrid clouds.

"Our perspective is the long-term winner, as we demonstrated in the all-flash market, is the one that can satisfy market needs … First to market is not necessarily the winner," he said.

Kurian's comparing the change in the IT industry caused by hyper-converged infrastructure to that caused by the all-flash storage array business makes sense, said John Woodall, vice president of engineering at Integrated Archive Systems (IAS), a Palo Alto, Calif.-based solution provider and longtime NetApp channel partner.

NetApp in the past publicly admitted it was late to the all-flash array market, Woodall told CRN.

"But IDC now reports that NetApp is the number-two vendor, and is quickly gaining market share in all-flash storage," he said. "So there's credibility when George compares NetApp's hybrid-converged infrastructure plans to all-flash storage. They went from the only major storage vendor without a presence in the flash storage market to where it now threatens the number-one vendor. So it makes sense for hyper-converged infrastructure."

NetApp has the technology and the architecture to succeed in this new endeavor, Woodall said.


"With hyper-converged infrastructure, lightning may strike twice," Woodall said. "NetApp has read the market, knows what the market needs, and can do it well. Whether you're talking about traditional infrastructure, converged infrastructure, or hyper-converged infrastructure, architecture matters."

NetApp has the opportunity to define what the next generation of hyper-converged infrastructure will look like, Woodall said.

"The hyper-converged infrastructure market is ready for what the next generation will look like," he said. "This will open interesting discussions with customers. That's not to say generation one hyper-converged infrastructure doesn't have value. But when you start talking about next-generation data centers, there's much room for improvement."

Strong growth in all-flash storage sales and the push to move customers towards its latest storage operating system is paying off for NetApp which on Wednesday reported a strong third fiscal 2017 quarter.

NetApp reported revenue for the quarter ended January 27 of $1.40 billion, up about 1.3 percent from $1.39 billion a year ago.

Income on a GAAP basis for the third fiscal 2017 quarter was $146 million, or 52 cents a share, down slightly from last year's $153 million, or 52 cents a share. However, on a non-GAAP basis, NetApp reported income of $231 million, or 82 cents a share, up from last year's $206 million, or 70 cents a share. The non-GAAP income figure includes the impact of a company restructuring during the quarter.

NetApp said it is expecting its fourth fiscal quarter of 2017 to have revenues in the range of $1.365 billion to $1.515 billion. That compares to actual revenue in the fourth fiscal quarter of 2016 of $1.38 billion.

The company is also expecting GAAP earnings in the range of 60 cents to 65 cents a share, and non-GAAP earnings in the range of 79 cents to 84 cents a share. This compares to last year's GAAP loss of 3 cents a share and non-GAAP earnings of 55 cents a share.

NetApp shares rose $1.67 (4.29%) to $40.60 three hours into after-market trading on Thursday.

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