Dynamic Marketing Communiqué

This company is floating on CLOUD nine! Check out what it does to provide a better experience for customers! [Monday: Marketing Marvels]

July 5, 2021

Cloud infrastructure growth has accelerated faster than expected because of the COVID-19 pandemic.

A lot of cloud service providers are improving their services to assist businesses in the work from home setup.

… but did you know that even before the pandemic began, some companies were already focusing on optimizing their cloud management system?

One of those companies is…

NetApp, Inc!

NetApp is an American cloud data services and data management company headquartered in Sunnyvale, California.

Founded in 1992, the business offers a wide range of data management software such as:

  • ONTAP-based systems
  • Cloud backup
  • NetApp HCI (Human-Computer Interaction)
  • StorageGRID
  • Converged software infrastructures
  • OnCommand Insight
  • Memory-accelerated data

… and many more.

Some of NetApp’s clients include Mercedes-Benz, DreamWorks, FICO, AstraZeneca, Ducati, and Arc’Teryx.

What’s one of the company’s marketing strategies to make sure it provides the “best experience” to its customers?

Transformation 2.0!

In 2019, NetApp reinvented its system into a hybrid multi-cloud.

[Hybrid Multi-Cloud: An IT infrastructure that uses a mix of on-premise and/or private or public cloud from multiple providers.]

How did the company achieve that?

Through the NetApp Keystone, a program that offers flexible solutions for customers about choosing to build or buy their cloud infrastructure.

According to NetApp’s CEO George Kurian, there’s a need to accelerate innovation in today’s world while dealing with the reality that data and resources are everywhere.

Because of that, today’s IT environments must also transform.

In his words,

“In today’s environment, cloud sets the benchmark for customer experience. We’ve built and delivered the data fabric strategy to simplify and modernize our customer’s data centers and enable success in the hybrid cloud era. The solutions we are introducing today are an extension of that philosophy―what data fabric has done to simplify and integrate data infrastructure, our new flexible consumption models do at the business level.”

Through Transformation 2.0, NetApp simplified the business of providing data services for customers.

… and when it comes to an outside perspective regarding the strategy, market research company International Data Corporation (IDC)’s Vice President, Ashish Nadkarni, said:

“In introducing flexible consumption models and automation-focused products, NetApp is making it significantly simpler not only to use its own products and services, but for IT leaders to modernize, monitor, and manage the entirety of their infrastructure.”

So… what’s there in the NetApp Keystone?

As a hybrid multi-cloud, Keystone offers the agility, pay-per-use economics, dynamic scaling, and operational simplicity that customers need to consume cloud the way they want to.

The software’s features include:

  • Flexibility to mix and match purchases and subscription payment methods.
  • An ability to run any NetApp service in any environment.
  • A simplified ownership experience that makes the buying, operating, and business growing processes easier using NetApp’s systems.

In other words, customers no longer have to “wait” for agile IT. They can choose their cloud consumption path based on their preferences.

Along with this new program and simplified customer experience, NetApp also announced several updates to its portfolio such as new product launches, enhancements, and integrations.

These products worked hand-in-hand with Keystone to further improve customer experience in using the company’s cloud systems.

  1. AIOps

    A new integrated solution using NetApp’s Active IQ and Cloud Insights, this product provides access to the company’s growing database of IT infrastructure intelligence for real-time resolution of issues across an entire hybrid multi-cloud environment.

  2. Data Security for Hybrid Multi-Cloud

    NetApp’s new system and data services have built-in security and compliance for key industries that avail of the company’s offerings.

  3. New Software and Systems that Meet the Demands of New and Traditional Enterprise Applications

    The company’s new flash storage systems and ONTAP updates offer a wide range of performance options and simplicity to power enterprise and modern applications.

  4. Cloud-Agnostic DevOps

    Using Kubernetes, NetApp created a redesigned model to answer economic factors and complexity concerns related to modern DevOps.

    [Kubernetes: An open-source container-orchestration system for automating computer application deployment, scaling, and management.]

Through this hybrid multi-cloud, NetApp was able to offer its customers “greater choice, flexibility, and freedom to run and pay for their data services however they want.”

One of these customers?

The technology company, ePlus Software, LLC!

As a user of the NetApp Keystone, ePlus experiences the benefits offered by the hybrid multi-cloud system in terms of cloud consumption, simplified data infrastructure, etc.

According to ePlus’ President Ken Farber,

“NetApp’s data fabric strategy has been a key element in how we help our customers modernize their infrastructures. With Keystone, we can help our customers build their data fabric via a consumption model that simplifies the experience and complexity of navigating hybrid multi-cloud.”

… and just as Farber said, the benefits of the NetApp Keystone goes beyond ePlus as a company.

Since most of NetApp’s customers are big businesses or corporations, that means the company makes a ripple effect by extending help to its customers’ customers!

Let’s use ePlus as an example:

The NetApp Keystone makes ePlus employees’ jobs easier (part of which is to help ePlus customers) → ePlus customers are happy about ePlus’ services/offerings → ePlus is also happy that it used the NetApp Keystone.

See? By introducing a new and simplified cloud experience for customers, NetApp made its consumption models as easy to navigate as 1-2-3!

In the past five years, NetApp, Inc. has recorded revenues of:

  • USD 5.5 billion in 2016
  • USD 5.5 billion in 2017
  • USD 5.9 billion in 2018
  • USD 6.1 billion in 2019
  • USD 5.4 billion in 2020

Clearly, the company’s Transformation 2.0 strategy proved effective as NetApp recorded its highest revenue in 2019.

NetApp, Inc.’s Earning Power: Valens Research vs. As-reported numbers

NetApp, Inc. (NTAP:USA) makes for a great case study that we come back to regularly. One great reason?

The company has proven itself to be a better earning power generator than investors might think.

So, how well has NTAP been growing its business in the past years?

The research doesn’t lie—nor do the results. Earning power (the blue bars) continues to show results higher on average than what traditional databases show.

The blue bars in the chart above represent NTAP’s earning power (Uniform Return On Assets). NTAP has seen volatile profitability. After rising from 14% in 2005 to 20% in 2008, Uniform ROA fell to 8% in 2009 before recovering to 20% in 2011. Thereafter, Uniform ROA shrunk to a low of 3% in 2016, before rebounding to peaks of 22% to 23% in 2019 to 2020.

The global ROA is just 6%.

The orange bars are the company’s as-reported financial information. If you relied on these numbers, you will see a company with understated profitability. As-reported ROA (return on assets, a measure of earning power) only ranged from 3% to 8% in the past sixteen years. Its as-reported ROA in 2020 was only at 7%, which is 3 times lower than its Uniform ROA in 2020.

That’s what you’ll see in Yahoo Finance, Google Finance, and most other databases.

The company’s stock price also performed better than the rest of the stock market over the decade, which we can see in the blue line in the chart below. Its returns have been well above the market.

The numbers show that NTAP has been doing well and making a profit.

With a lot of companies increasingly using cloud systems nowadays, NetApp constantly works to unlock the best of its services that help its consumers and their businesses.

This means consistently improving how data is managed, stored, analyzed, protected, and used.

NetApp does that for one good reason.

What is that?

The company believes that a simpler and more convenient cloud infrastructure is one of the keys to a lasting relationship with NetApp customers.

About The Dynamic Marketing Communiqué’s
“Monday Marketing Marvels”

Too often, industry experts and the marketing press sing the praises of some company’s marketing strategy.

…Only for the audience to later find out that their product was a flop, or worse, that the company went bankrupt.

The true ROI in marketing can’t be separated from the business as a whole.

What good is a marketing case study if one can’t prove that the company’s efforts actually paid off?

At the end of the day, either the entire business is successful or it isn’t. And the role of marketing is always paramount to that success.

Every Monday, we publish a case study that highlights the world’s greatest marketing strategies.

However, the difference between our case studies and the numerous ones out there, is that we will always make certain that the firm really did generate and demonstrate earning power worthy of study in the first place (compliments of Valens Research’s finance group).

By looking at the true earnings of a company, we can now rely on those successful businesses to get tips and insights on what they did right.

We’ll also study the greatest marketing fails and analyze what they did wrong, or what they needed to improve on. We all make our mistakes, but better we learn from others’ mistakes—and earlier, rather than later.

Hope you found this week’s marketing marvel interesting and helpful.

Stay tuned for next week’s Monday Marketing Marvels!


Kyle Yu
Head of Marketing
Valens Dynamic Marketing Capabilities
Powered by Valens Research

View All

You don’t have access to the Valens Research Premium Application.

To get access to our best content including the highly regarded Conviction Long List and Market Phase Cycle macro newsletter, please contact our Client Relations Team at 630-841-0683 or email client.relations@valens-research.com.

Please fill out the fields below so that our client relations team can contact you

Or contact our Client Relationship Team at 630-841-0683