NetApp continued to wade through troubled waters during Q2, and it expects these waters to remain rough through the end of its current fiscal year. However, every cloud has a silver-lining, and for NetApp the cloud remains one area of both calm and promise.

For its second fiscal quarter of 2020, NetApp posted $1.37 billion in revenue, which was down from the $1.52 billion it reported a year ago and fell just short of expectations. NetApp's Q2 results pile onto what has now been three consecutive quarters of revenue shortfalls. The company said it expects full-year revenues to drop 8% year over year.

NetApp CFO Ron Pasek laid some of the latest woes at the feet of its larger customers that he said are feeling the impact of the trade war with China. He explained that the company is also taking an indirect hit as those customers slow their spending due to recessionary fears. But, he added, NetApp's overall business model remains solid.

“Despite ongoing macro-economic uncertainty and the potential for continuing unpredictability in enterprise purchasing behavior, the fundamentals of our business are strong,” Pasek said on a call with investors, according to a transcript. 

Despite Pasek's sunny outlook, enterprise spending will continue to deteriorate, and that could pose problems for several large tech stocks including NetApp, said Goldman Sachs analyst Rod Hall. “We believe that most of this weakness relates to a lack of business confidence at large enterprise driven by trade volatility as opposed to a broader macro slowdown,” he wrote in a research note.

Nonetheless, Pasek is confident his company will return to growth through its strategic investments in hybrid and multicloud technologies that Pasek says increase NetApp’s strategic relevance and “enables us to reach new buyers through new pathways, address new workloads, and expand our presence with existing customers.”

“The hybrid, multicloud is the de facto architecture of choice,” Nancy Hart, VP of marketing at NetApp, told SDxCentral. “Either by hook or by crook, customers are going to end up in a hybrid cloud, multicloud kind of world.” She explained that customers already use multiple clouds, and they want to be able to manage them from one place while using the tools and services native to each environment.

To that end, NetApp launched its Keystone platform in October. 

That launch is a checked-box for a NetApp that earlier this year announced it would be moving into consumption-based pricing to make on-premises infrastructure more cloud-like. That move followed similar announcements by Hewlett Packard Enterprise (HPE) and Dell Technologies.

Regardless of the company’s financial difficulties, NetApp CEO George Kurian remains optimistic for the future — and rightfully so considering that the company's Cloud Data Services business posted a 167% year-over-year increase in revenue to $72 million. 

“Our customer conversations indicate that our hybrid multicloud portfolio of solutions is the right one,” Kurian said. “We believe we can return to growth over time by prudently reallocating investments to expand sales coverage and accelerate our participation in the growing private cloud and cloud data services markets.”