NetApp CEO Kurian: ‘We Are Reaching More Customers Than Ever Before With Our Public Cloud Business’

‘Over the course of fiscal year 2021, we added approximately 1,500 new-to-NetApp customers with public cloud services and grew our total cloud customer count by 137 percent from Q4 fiscal year 2020. In addition to adding new cloud customers, existing cloud customers are expanding their spend with us,’ says NetApp CEO George Kurian on the company’s financial conference call.

NetApp And A Cloud Future

NetApp Wednesday released the financials for its fiscal year 2021, which turned out to be a very good year on which to build a strong fiscal year 2022. Not only did NetApp see product growth in the fourth quarter of the year for the first time in several quarters, it also reported growth in its cloud business.

During NetApp’s quarterly analyst conference call, CEO George Kurian was very clear that the cloud was the key to NetApp’s future. “We plan to accelerate our public cloud services and continue to grow our hybrid cloud business,” he said. “I am excited about the year ahead and confident in our ability to deliver top-line growth by supporting our customers on their cloud and digital transformation journeys.”

Just how important is the cloud to NetApp? While better known as the largest independent storage vendor, NetApp has become the pioneer in technology to allow data to be seamlessly managed and migrated across on-premises, private cloud, hybrid cloud and public cloud environments. Kurian, during the conference call, made it clear that NetApp is on the way to seeing massive growth in cloud annual recurring revenue and is on a roll in terms of growing its customer base in the cloud.

Here are five key things Kurian said on the quarterly conference call.

The Cloud Is NetApp’s Future

“We intend to leverage our deep infrastructure expertise and our credibility with the cloud providers to expand our multi-cloud infrastructure management services. My confidence in our ability to reach our goal of $1 billion in public cloud ARR [annual recurring revenue] in fiscal year 2025 is further enhanced by the strength and uniqueness of our cloud services position.

“Our focused execution last year has set us up well for fiscal year 2022. We have returned to growth, we are gaining share in key storage markets, and our public cloud services are at a scale where they are positively impacting total company billings and revenue growth. Our momentum underscores our value to customers in a hybrid, multi-cloud world. In fiscal year 2022, we plan to accelerate our public cloud services and continue to grow our hybrid cloud business.”

NetApp Is Reaching More Cloud Customers Than Ever

“We are reaching more customers than ever before with our public cloud business. Over the course of fiscal year 2021, we added approximately 1,500 new-to-NetApp customers with public cloud services, and grew our total cloud customer count by 137 percent from Q4 fiscal year 2020. In addition to adding new cloud customers, existing cloud customers are expanding their spend with us. Our dollar-based net revenue retention rate increased to 252 percent in the fourth quarter.”

Cloud Annual Recurring Revenue Boomed In 2021

“Cloud Volumes, Cloud Insights and Spot all performed well in the quarter, driving our public cloud services ARR to $301 million exiting fiscal year 2021, an increase of 171 percent year over year. ... Cloud Volumes, Cloud Insights and Spot are now the primary growth engines of our public cloud services business. They are well established for enterprise applications, and we are taking each of them into the cloud-native world, further expanding our market opportunity.”

Cloud Annual Recurring Revenue Poised For Huge Growth

“We’re expanding the number of sellers and revenue-generating teams facing customers. We’ve seen really good success with Microsoft in terms of their route to market. We’re working with the other hyperscalers to also train and expand the range of ways we take our products to market with them. And we’re building our customer service and customer success teams.

“I feel even more confident that we have the range of capabilities to achieve the $1 billion target in ARR that we indicated. And the customer use cases that we are deploying on our public cloud portfolios, these are run-the-business applications, mission-critical, highly differentiated business value-creating applications. So, I feel really, really good about where we.”

Storage Product Sales Outlook

“In Q4, product revenue grew 6 percent, and our all-flash array business grew 11 percent year over year. Based on our growth, I am confident that we have gained share in the storage and all-flash markets. We advanced our hybrid cloud portfolio with the introduction of ONTAP 9.9 and Astra. This innovation will support continued product revenue growth and share gains through fiscal year 2022. Additionally, we continue to make good progress with Keystone, with many new wins, including our largest ever Keystone deal…

“NetApp Astra offers application-aware data management that protects, moves and manages data-rich Kubernetes workloads. Spot Ocean automates cloud infrastructure for containers, automatically scaling compute resources to maximize utilization and availability while minimizing costs. Cloud Insights for Kubernetes provides simplified infrastructure monitoring to quickly identify performance issues and resource constraints. Together, our public cloud services give our customers, and especially their CloudOps and DevOps teams, a robust suite of multi-cloud infrastructure management services.”