Q&A: A One-On-One with NetApp CEO George Kurian

George Kurian | NetApp CEOCorporate Communications sat down with George Kurian, who recently celebrated his one-year anniversary as CEO of NetApp. Here, George reflects on the past year while giving readers a glimpse into current business and what’s ahead regarding transforming NetApp.

 

Q: George, you just passed the one-year mark as CEO. Would you share with our readers your perspective on this past year?

 

A: It’s been a challenging year for the global economy and IT spending as a result. Customers are looking for better returns from their IT investments, prioritizing transformational capabilities to improve their efficiency and agility, and considering new ways of consuming IT. Our leading competitors have gone in opposite directions—one demerging to improve focus, the other consolidated for scale. The technology IPO market, driven by the poor performance of recent technology IPOs, is at a standstill. This situation will cause a substantial winnowing down of the pre-IPO companies and has created a focus on the strategic value of a sustainable, profitable business model for public technology companies.

 

Q: What about your perspective on NetApp?

 

A: When I took over as CEO a year ago, NetApp was dealing with several internal challenges. We were late to the flash-array market, we were not prepared to assist our installed base customers in migrating to the NetApp® clustered Data ONTAP® operating system, and we had limited traction in the hybrid cloud.

 

Over the course of the year, we made substantial progress with our portfolio and our strategic pivot to the faster-growing parts of the storage market. We moved into a leadership position in flash, as evidenced by IDC’s Q1 2016 Worldwide Quarterly Enterprise Storage Systems Tracker, which ranked NetApp #2 in worldwide all-flash array market share. All Flash FAS is the fastest-growing product in NetApp’s history. In addition, our broad all-flash-array portfolio, which includes the purchase we made of SolidFire®, now addresses multiple workload requirements and deployment styles. From a go-to-market standpoint, we reengaged our channel partners by successfully enabling them to migrate the installed base to clustered ONTAP. Our Data Fabric strategy has proven effective in positioning us to win leading-edge cloud deployments. Additionally, we added new leaders with fresh insight and deep experience to the management team and the board of directors and took the first step to permanently lowering our cost base. Heading into FY’17, our momentum with customers is accelerating, but we still have more work to do to return the company to growth.

 

Q: How is the integration of SolidFire going?

 

A: We had the SolidFire Analyst Day in early June, and it’s very rewarding to see the excitement that the team and technology are generating and to hear directly from customers about how they use SolidFire in their environments. SolidFire enables customers to build extraordinarily efficient and flexible infrastructures that are very similar to the public clouds. The integration of SolidFire is going well and we’re on plan.  The NetApp sales team is selling SolidFire as part of the portfolio and introducing it into new accounts. We are winning against and replacing footprints of both established and emerging vendors in customers building next-generation data centers.

 

Q: NetApp is known to have loyal customers—some even refer to it as “bleeding blue.” How have customer environments changed over the past year and what is NetApp doing to address it?

 

A: First, I want to say thank you to our customers. I’m on the road a lot, and I get to experience firsthand the loyalty that customers have for NetApp. It’s deeply gratifying, and I know we’ve got to earn that every day. Customers are digitally transforming themselves to improve their businesses and engage with their customers differently. Data is at the heart of this transformation, and this is where NetApp has a profoundly important role to play. We have an extraordinary opportunity to help customers as they move to modern IT architectures and hybrid cloud solutions.

 

Over the past year, flash storage has progressed substantially relative to the cost-performance of small-form-factor hard disk drives to where it is becoming the de facto technology for primary workloads. Flash is playing a key role in customers' IT transformation efforts as they seek to gain advantage through greater speed, responsiveness, and value from key business applications while substantially lowering total cost of ownership. As customers make this transition, they cannot forego enterprise data management and data protection capabilities. With a highly differentiated and complete portfolio of all-flash-array offerings, NetApp is, without question, far better positioned to enable customers to accomplish this transition than any other vendor. Our results demonstrate customers’ success with our all-flash-array portfolio. We’ve also seen strong success with our NetApp OnCommand® portfolio.  OnCommand Insight helps customers monitor and manage their IT infrastructures and storage environments, substantially improving their efficiency and their ability to maximize value from past investments.

 

Although it’s early in the development of hybrid clouds, customers are increasingly evaluating how they might build hybrid cloud architectures combining multiple public clouds with their own data center environments. We’ve seen good success in leading-edge cloud deployments with our Data Fabric strategy that uniquely enables customers to seamlessly manage data across multiple clouds, providing them with choice and control of their data.

 

Q: You are leading NetApp through a significant company transformation, something that has never been done before at the company. Explain to our readers what that transformation entails.

 

A: The leadership team and I are sharply focused on our business model and committed to returning the company to long-term growth. To deliver on this commitment, we are executing on our growth strategy and a comprehensive and sustained company transformation, which includes:

  • Focusing on our Data Fabric strategy and the strategic solutions that form the foundation of how we enable customer success in the data-powered digital era
  • Substantially reducing cost and systematically streamlining our operations while maintaining our ability to deliver innovation and lead the market
  • Executing a robust capital allocation program that includes a combination of share repurchases, dividends, and investment for the long-term growth of the business

 

Q: Thank you, George. Do you have any last thoughts for our readers?

 

A: I am very confident in NetApp’s potential. We have a clear plan and are moving forward with conviction. Our Data Fabric strategy uniquely enables us to help customers achieve their strategic IT imperatives. We hold a unique position in our industry with the people, technologies, partnerships, scale, and financial strength needed to help enable our customers’ success in this new data-powered digital era. I am honored to lead this great company during this critical time and excited to build on NetApp’s powerful foundation. We’ve made progress this past year, have accelerating momentum with customers, and are staying sharply focused on the work remaining to be done.