Sep 24, 2020
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How Will NetApp’s Hybrid Cloud Focus Help Its Revenue Base Over Coming Years?

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BRAZIL – 2019/09/11: In this photo illustration the NetApp logo is seen displayed on a smartphone. . [+] SOPA IMAGES/LIGHTROCKET VIA GETTY IMAGES NetApp (NASDAQ: NTAP) is a technology company that makes money selling data management hardware software and solutions. The company competes with Dell HPE Pure Storage and Nutanix among others in the hybrid cloud data services and information management space


The company reported mixed earnings for the third quarter recently with revenues coming in just below expectations while improved margins helped it beat earnings expectations. Notably the company s cloud data services business registered strong growth. Trefis highlights trends in NetApp s Revenues over recent years including our forecast for the next two years in our interactive dashboard parts of which are highlighted below


We believe that the company s top line will grow at over 5% annually over the next two years thanks to its increased discuss hybrid cloud offerings – up from the 3. 8% revenue growth seen in fiscal 2019 (NetApp reports at the basis of a fiscal year ending April). NetApp s Business Model NetApp Has 3 Operating Segments Product: Product segment includes revenues generated from NetApp s storage-based hardware and related software sales


Services: Revenue is derived from the sale of maintenance of hardware sold. Software maintenance: Revenue is derived from the sale of product upgrades enhancements and technical support. We think these divisions to contribute $4 billion (62. 6%) $1 billion (15. 3%) and $1 billion (22. 1%) respectively to the company s 2020 revenue estimate of $6 billion


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4% over 2017 to 2019 to $6 billion and is expected to extend 11% to nearly $7 billion by 2021. 1) Product Division revenue growth of $1 billion over the next two years might be driven by growth in hybrid cloud environments. 2) Services Division revenue is likely to remain flat thanks to macro issues offset by adoption of hybrid cloud


3) Software Maintenance Division revenue growth of $0. 1 billion over the next two years might be driven by increasing software component in the company s offerings. Additional information about how revenues for each of NetApp s 3 Reporting Segments have trended over the years is available in our interactive dashboard


TREFIS What s behind Trefis? See How It s Powering New Collaboration and What-Ifs For CFOs and Finance Teams| Product R&D and Marketing Teams More Trefis Data Like our charts? Explore example interactive dashboards and create your own

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