from GS:
*NETAPP CONTINUES TO MAKE GOOD PROGRESS IN SHIFTING ITS VERTICAL MARKETS TO
AREAS OF OPPORTUNITY. NetApp has done a credible job in shifting its
business away from the Internet, telecom and technology space and into more
traditional enterprises. Its approach here has been methodical and
includes the hiring of industry experts and the shifting of sales resources
to better opportunity markets. Success has been evidenced by penetration
of the energy and gas markets, which could represent close to 10% of sales
this year, and new traction in financial services. In short, NetApp has
both extended the number of key enterprise markets that it is concentrating
on at the same time that it has grown revenues in those markets. This
segment, now representing 40% of revenues, up from 15% last year, nearly
doubled from last year in the current quarter. Conversely, the Internet
segment declined from 40% of sales last year to 15% in the October quarter,
although the quality of the customers has been significantly enhanced, with
Yahoo and Oracle.com two major customers. The following table demonstrates
the progress that NetApp is making in its ongoing move to broaden and
diversify its customer base.
.....................Percent of revenue..Oct Quarter Change
........................Oct-00,Jul-01,Oct-01..Qtr/Qtr,Yr/Yr
Enterprise................... 15% 25% 40% +55% +99%
Technology, comm's, and other 45% 55% 45% -21% -25%
Internet..................... 40% 20% 15% -27% -72%
Total revenue............... 100% 100% 100% -3% -25%
Source: Network Appliance; Goldman Sachs Research estimates. |
