NetApp Pricing Trajectory Spells Good News for Patient Buyers

By Chris Vicknair

Director of Client Services, NPI

November 17, 2015

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Artwork Courtesy of @iStock/baranozdemir

NetApp’s health over the last couple of years has some customers nervous. The vendor has seen its market share – which grew steadily from 6.5% in 2005 to 13.1% in 2013 – decline over the last two years. NetApp seems to be suffering primarily from a stagnant product set, coming last to the party for all-flash storage solutions. Competitors like EMC have made greater headway in putting quality flash solutions in place and have increased an already dominant lead in the external storage market.

However, change is in the air. Those customers concerned about NetApp’s viability as a long-term IT partner should consider a few things. Although late to market with its flash storage solution, there is impressive momentum with its newest all flash offering - the NetApp AFF8000 series - especially among customers who are restructuring data centers as part of their cloud roadmap. According to the vendor, the array has become one of the fastest growing products in its history. Some analysts are predicting that NetApp’s market share will soon return to growth.

Another thing to consider is NetApp’s price trajectory for external storage. It is estimated that NetApp sold each GB of storage for approximately $.70 in 2013. In 2014, the per GB price was $.60. It is predicted that the cost of external storage will continue to decline, approaching $.30 within the next few years. This will make the solution more accessible and will grow market share, albeit on smaller margins.

If you’re considering a purchase or renewal with NetApp, consider sitting tight for a little while longer if you have that flexibility. Pricing is likely to get better the longer you wait. As for long-term health, with key product innovations heating up and the price of external storage coming down, NetApp is positioned to be around for a while.