) storage hardware market share in terms of gigabytes has been
increasing consistently over the years, with 201o witnessing high
growth led by success of its unified storage strategy and rising
demand by enterprises for high-end storage hardware via cloud
computing.NetApp competes mainly with EMC (
), IBM (
), HP (
) and Dell (
) in the external disk storage systems market.
While we expect NetApp's hardware storage share to rise to 13%
in the coming years, Trefis members project a higher growth level
reaching close to 17% by 2013, translating into an upside of 38% to
our price estimate for NTAP stock.
We currently have a
Trefis price estimate of $64.48 for NetApp's
, about 16% above the current market price of $55.35.
NetApp Benefits from Single Operating System
NetApp has a single operating system Data ONTAP which supports
all of its hardware platforms such as NAS, Fiber Channel SAN and
iSCSI SAN. NetApp's products offer several advantages: easier
deployment of applications, easier management of storage resources,
reducing total cost of ownership for customers, and access to many
software features like data backup and retention, provisioning, and
Increasing Demand for Virtualization of Storage
There is rising demand for high-end storage hardware from
cloud-service providers as cloud storage becomes increasingly used
by businesses. According to IDC, storage is the fastest growing
cloud service, growing from 9.0% of all cloud service revenues in
2009, or $1.6 billion, to an estimated 14.0% in 2013 or over $6
billion of worldwide IT cloud services revenues.
More than 10% of NetApp's hardware shipped is built on
Performance Acceleration Module (PAM) technology, and we believe
this shift will drive growth for NetApp's high-end storage hardware
in the future.
The Trefis community forecasts NetApp's storage hardware market
share will rise from 13% in 2011 to almost 17% by 2013, compared to
the baseline Trefis estimate of inch higher from around 12 to 13%
during the same period.
The member estimates imply an upside of 38% to the Trefis
price estimate for NetApp's stock, signifying the importance of
storage hardware business for the company. This would imply a
price estimate of close to $90.
complete analysis for NetApp's stock is here