Network Appliance, Inc. ('NetApp'), provides enterprise network storage and data
management solutions. NetApp' network storage solutions and service offerings
provide data-intensive enterprises with consolidated storage, improved data center
operations, economical business continuance, and efficient remote data access.
Network Appliance's success to date has been in delivering highly cost-effective
network storage solutions that reduce the complexity associated with conventional
storage solutions. Our goal is to provide products that set the standard for simplicity
and ease of operation, with what we believe to be one of the lowest total costs
of ownership (TCO)'and highest returns on investment (ROI)'in the industry. Network
ApplianceTM solutions are the data management and storage foundation for leading
enterprises, government agencies, and universities worldwide.
Network Appliance focuses on 'simplifying the complex.' This philosophy drives
the entire company, from product design and system operation through support
processes. This results in significant customer advantages, including:
''Lower total cost of ownership, in part because system administrators can
more efficiently manage much greater amounts of information, and also because
recovery times are significantly reduced in the event of a disaster or data
corruption.
''Business agility, by improving our customers' ability to react quickly to
changes via rapid deployment or reconfiguration of storage assets.
''Improved information availability, due to increased reliability.
''Improved application performance, enabling customers to advance their time-to-market
goals and create new revenue-generating opportunities.
''Business continuance via online rapid restore and disaster recovery deployments.
''Satisfying customers' growing regulatory compliance requirements with our
comprehensive software and solutions.
Customer Base
Our diversified customer base spans a number of large vertical markets. Examples
include:
''Energy. Customers in the energy market have traditionally deployed our products
to support their exploration activities, where the simplicity of the appliance
architecture and the ability to support massive amounts of data are critical.
Our solutions help enable energy companies to meet their workflow optimization
objectives, improve quality, reduce cycle times, and lower costs.
''Federal government. The United States ('U.S.') federal government is one
of the largest information technology ('IT') consumers in the world, and Network
Appliance Federal Systems, Inc., provides solutions for many data-intensive
activities, including intelligence gathering, analysis, and civilian and military
operations.
''Financial services. New data-processing methodologies, shorter time frames
for settlement transactions, and new demands for better knowledge management
are requiring financial services firms to improve their data storage infrastructures.
Network Appliance solutions for enterprise storage enable these financial institutions
to effectively manage large amounts of data in a high-speed distributed infrastructure,
enabling customers to leverage their existing technology investments and derive
maximum value from their time-sensitive information.
''High technology. Global technology enterprises, including semiconductor,
systems, and software companies, are keenly focused on reducing infrastructure
cost and improving time-to-market. Network Appliance solutions enable high-technology
firms to achieve these goals by reducing total cost of ownership and providing
highly reliable systems and rapid access to corporate information assets.
''Internet. Internet-focused businesses place considerable and often unpredictable
demands on transaction-intensive, database-driven environments such as electronic
mail (e-mail), World Wide Web (WWW), and electronic commerce (e-commerce). In
a marketplace where retaining customer loyalty is paramount, Internet-focused
businesses must have high performance and readily available data to ensure that
their customers do not seek alternative providers. Scalable distributed architectures
based on Network Appliance's products improve data availability, scalability,
and performance, while reducing the total cost of ownership.
''Life sciences. Pharmaceutical, bioresearch, genomic research, and care providers
are focused on developing vital new drugs, improving quality of patient care,
and increasing their returns on investment. Network Appliance solutions enable
fast access, integration, and sharing of massive amounts of exponentially growing
scientific and medical imaging data, reduced time-to-market, and improvements
in operational efficiency.
''Major manufacturing. Global manufacturing companies face intense competitive
pressure to develop attractive new products, improve time-to-market, and optimize
profitability. Network Appliance solutions enable these companies to simplify
the management overhead associated with storing and protecting large amounts
of ERP, engineering, and manufacturing product data, while ensuring that information
can be easily and efficiently distributed to manufacturing and distribution
sites around the world.
''Telecommunications. Service providers in the telecommunications industry
are faced with deregulation, globalization, increased competition, and often
a substantial debt burden. As a result, they must control infrastructure costs
while maintaining or improving services to existing customers and at the same
time identifying and developing compelling new revenue streams in order to grow
their business. Network Appliance's products and solutions allow these providers
to quickly and cost-effectively build the network storage infrastructure and
content delivery networks required by the global telecommunications industry.
''Storage consolidation. Managing the explosive growth of data is one of the
greatest challenges enterprises face today. Network Appliance gives enterprises
the scalable solutions they need to consolidate storage from hundreds or thousands
of servers and manage storage efficiently in a mixed server environment.
''Data center operations. More than just applications and hardware, the data
center is the nerve center of an organization, controlling the flow of information
throughout the enterprise. Many of the costs that drive up the total cost of
information technology (IT)'ownership are associated with data center operations,
and include tasks such as data backup and recovery, hardware and software maintenance,
performance management, and resource allocation. Our simplified appliance architecture
automates or eliminates many of these administrative tasks, and delivers simple,
centrally managed, and flexible data storage that leverages and increases the
performance of existing IT infrastructures.
''Business continuance. Many enterprises are increasingly focused on disaster
preparedness and recovery and must avoid costly downtime in the event of a major
disaster or localized disruption. Minutes of downtime are costly, and hours
of downtime can be catastrophic. Working in tandem with the existing network
infrastructure (both Fibre Channel and Ethernet), our storage appliances and
data management software enable customers to implement disaster recovery and
data mirroring plans quickly and effectively, while minimizing incremental telecommunications
and administration costs.
''Distributed enterprise. As enterprises grow, it becomes increasingly difficult
to provide timely information to remote locations and branch offices, jeopardizing
their productivity. NetApp products accelerate information access and application
performance while reducing bandwidth costs, and also reduce the cost and complexity
associated with managing the data in these distributed offices. Our solutions
enable enterprises to quickly replicate and relay information to and from one
or many locations, fully protecting data in remote offices and locations.
''Regulatory Compliance. Regulatory compliance is a growing concern for every
industry. Regulations such as Sarbanes-Oxley, Patriot Act, Gramm-Leach-Bliley
affect all U.S.'based companies. Furthermore, industry specific businesses are
affected by such regulatory acts such as Rule'17(a)(4) of the Securities and
Exchange Act of 1934, as amended, which relates to preservation of certain records
by certain exchange members as well as brokers and dealers, as well as Health
Insurance Portability and Accountability Act ('HIPAA') and several government
defense requirements. NetApp offers compliance solutions designed to address
such regulations and the need for data permanence, security, and confidentiality
while reducing business risks and improving information access.
Network Appliance markets and distributes products globally in over 100 countries
employing a multichannel distribution strategy, which focuses on product sales
to end users through a direct sales force, value-added resellers, system integrators,
original equipment manufacturers ('OEMs') and distributors. In North America,
we employ all forms of distribution previously mentioned, with a focus on direct
sales to our strategic and named accounts. In Europe, we employ a mix of resellers
and direct sales channels to sell to end users. In Asia, Africa and South America,
our products are primarily sold through resellers, which are supported by channel
sales representatives and technical support personnel.
Competition
The storage and content delivery markets are intensely competitive, and are
characterized by rapidly changing technology.
In the storage market, our FAS appliances and associated storage software portfolio
competes primarily with storage system products and data management software
from EMC Corporation, Hitachi Data Systems, Hewlett-Packard Company (including
the integrated Compaq Computer Corporation), IBM Corporation, and Sun Microsystems,
Inc. We have also historically encountered less-frequent competition from companies
including Dell, Engenio Information Technologies, Inc. (formerly the Storage
Systems Group of LSI Logic Corp.), StorageTek Technology Corporation, Silicon
Graphics, Inc., and Xiotech Corporation. In the nearline storage market, which
includes the disk-to-disk backup and regulated data storage segments, our NearStore
appliances compete primarily against products from EMC and StorageTek. Our NearStore
appliances also compete indirectly with traditional tape backup solutions in
the broader data backup/recovery space.
In the content delivery market, our NetCache appliances and content delivery
software compete against caching appliance and content delivery software vendors
including BlueCoat Systems (formerly CacheFlow, Inc.), and Cisco Systems, Inc.
Our NetCache business is also subject to indirect competition from content delivery
service products such as those offered by Akamai Technologies.