“Our approach is to bring to the enterprise, an enterprise-grade hyperconverged solution that deals with some of the challenges that first-generation hyperconverged solutions like VSAN and Nutanix has,” Kurian said on NetApp’s first quarter fiscal year 2018 earnings conference call. “This is the ability to deliver a guaranteed mixed workload performance to have modular scalability and upgradability of your storage environment, and your compute environment, as well as to deploy mission-critical workloads like databases and other things beyond VDI, which is where the primary first-generation vendors are.”
Kurian repeatedly urged investors to “come to Insight,” NetApp’s annual conference, in October for more details. It’s widely assumed the company will debut its HCI system at the trade show.
The company’s all-flash storage arrays have boosted NetApp’s business since the acquisition. HCI, which combines scalable compute, networking, and storage in a single system, is the company’s next growth opportunity, Kurian said: “Hyperconverged is another arrow in our quiver” for the second half of calendar 2017.
On Wednesday, the company reported better than expected earnings with net revenues for the first quarter topping $1.33 billion, up 2 percent year-over-year. Non-GAAP net income for the first quarter was $173 million, or $0.62 per share, compared to non-GAAP net income of $129 million, or $0.46 per share, for the same period of the prior year.
Kurian said the company’s growth shows that NetApp’s “transformation” from a legacy storage appliance maker to a hybrid cloud company is working. “In a hybrid cloud data-driven world, we have an unprecedented opportunity to strengthen and grow our business,” he said, according to a Seeking Alpha transcript.
In addition to its all-flash arrays and HCI, this includes a relationship with Microsoft Azure. NetApp partnered with Microsoft to provide hybrid cloud data services to enterprises moving to Microsoft Azure.
Kurian said the partners will reveal more details later this calendar year, but he added that the collaboration includes cloud and on-premises data center services.
“On the cloud side, it’s developing new cloud data services based on NetApp ONTAP innovation that will be offered on the Azure cloud,” he said. ONTAP is NetApp’s data management and storage software. “On-premises, we have agreed to engineering collaboration to deliver an integrated solution architecture that combines Azure and Azure stock with NetApp ONTAP. We are also working with Microsoft on integrating our data fabric technology.”
With its HCI play, however, Nutanix may be competing against Microsoft, which quietly debuted its own HCI offering last October and then announced its hardware partners last month.
As enterprises look to modernize their data centers, many are choosing HCI systems — and the growing technology segment doesn’t show any signs of slowing.
The integrated systems market will reach $20 billion by 2021, according to a Gartner report. The report says HCI systems will grow at a compound annual growth rate of 48 percent — three times faster than the overall market.