This years plunge in information technology spending has obscured a
major strategy shift by IT managers. Despite the painful purchasing
slowdown, the deployment of network attached storage (NAS) filers is quickly
moving from the realm of niche product for engineering geeks to an IT staple
throughout corporate departments in fields ranging from manufacturing to
medicine.
As recently as a year ago, NAS appliances were used mainly by technology
companies, dotcoms, and engineering departments. Along with the rest of the
fallout in tech spending, overall NAS revenues at vendors like Network Appliance
Inc. (Nasdaq: NTAP)
have dipped during the last couple quarters. But, while sales of NAS filers
to technology-centric business units have stagnated, mainstream businesses
in other vertical markets have spotted the value of NAS and are increasing
spending accordingly.
NetApp CEO Dan Warmhoven noted at a Prudential Securities
conference this week that his company has experienced an $80 million
quarterly revenue shift. During the quarter ending in April 2000, just
before the economy began to unravel, 70 percent of NetApps $200 million
revenues were sales to technology businesses and departments and to dotcoms. The
remaining 30 percent were to non-tech business units.
By the quarter ending July 2001, when revenues were again $200 million,
the numbers were reversed. Now, 70 percent of sales are to non-tech business
segments. (NetApp will announce its financial results for its October quarter
on Nov. 13.)
The key industries NetApp now sells to are telecom services, financial
services, energy, manufacturing, life sciences, and government. NetApp began
its relationships with major customers by first selling to their engineering
departments. Now the company sells to various departments within major
clients like Merrill Lynch & Co.
Inc. (NYSE: MER), Citigroup, and The Hartford, notes Rod Mathews, NetApp's director of investor
relations.
To realize the benefits of cloud-native software, an application must actually be cloud-native—designed to run in the cloud, interacting with disaggregated cloud services, fully manageable as code—to deliver the expected benefits.
By combining resources and expertise, the AI-Enabled ICT Workforce Consortium will offer a blueprint for how industries can adapt to an AI-dominated future.
IT leaders should heed the guidance of cybersecurity insurance providers who think businesses should prioritize security education, incident preparedness, regular internal audits, and ongoing vulnerability scanning and patching.
