Network Appliance CEO Sees Europe as Fastest Growing Region
London, Jan. 26 (Bloomberg) -- Network Appliance Inc., a U.S. maker of equipment that stores data on computer networks, expects revenue from Europe to double in fiscal 1999, accounting for a quarter of total sales, according to Dan Warmenhoven, its chief executive.
He said growth in Europe was led by demand for its file servers and ''Web caching'' products. File servers allow data to be stored and accessed by computer networks. Web caching devices enable computers to store separately the most frequently used data for faster access through the Internet.
European companies, especially Internet Service Providers, use file servers and Web caching products to cut down the time and money spent to access data through a telecommunications network. Telecommunication charges are generally higher in Europe than the U.S. ''Europe is our highest growth area,'' said Warmenhoven, in an interview. ''The return on cache investments for companies are within three to four months in Europe compared with a year in the U.S.''
He expects Europe's share of the company's total sales to exceed 25 percent in the current quarter. Europe's contribution rose from about 6 percent two years ago to 19 percent in its most recently reported quarter ended Oct. 30, 1998.
Unix-based file server products accounted for half the sales, while sales of Microsoft Corp.'s Windows NT-based products contributed about 5 percent. Web cache products accounted for 5 percent of its total sales, Warmenhoven said.
The Santa Clara, California-based company supplies its products to the U.K.'s largest ISP, Freeserve, owned by appliances retailer Dixons Group Plc, as well as Demon Internet, owned by ScottishPower Plc. In the U.S., Yahoo! Inc. counts among its top customers.
Network Appliance's second-quarter earnings rose 71 percent to $8.38 million, or 22 cents a share. Sales rose 71 percent to $65.6 million. Sales to ISPs contributed 18 percent of revenue.
Its shares rose $1 to 50. |
