NetApp CEO: Cisco Partnership To Stay Strong Despite EMC JV
By Jerry A. DiColo, Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- NetApp Inc.'s (NTAP) collaboration with Cisco Systems
Inc. (CSCO) will remain strong despite the networking giant's latest tie-up with
NetApp rival EMC Corp. (EMC), NetApp Chief Executive Tom Georgens said.
"We will partner with them just as often," Georgens said in an interview
Friday. He conceded that EMC has a loyal base of customers but said NetApp can
grow by finding new opportunities outside of that base.
NetApp has fared better than many of its peers amid the recession, even as
corporate spending has fallen as companies conserve cash. On Thursday, NetApp
reported that its fiscal second-quarter revenue remained flat from last year,
but profit doubled on sharply higher margins.
The stock on Friday ended down 1.3% to $30.44, though shares have more than
doubled over the past year and are up 41% over the past three months.
NetApp is often mentioned as a potential acquisition target amid the
increasing consolidation in the IT industry. Georgens, who took the reins of the
Sunnyvale, Calif., storage-product maker in August from veteran chief executive
Dan Warmenhoven, said he was open to an acquisition at the right price, but he
stressed that his focus is to continue to grow.
"If you look at market penetration, market share, there are still substantial
opportunities to grow in this market," he said. "There is ample evidence that we
can continue to gain share."
"At some price, it's a shareholder matter, no matter what our preference is,"
he added.
Tech giants have recently moved to build one-stop technology shops, combining
hardware, software and services companies to bring a full suite of products to
customers trying to simplify their IT infrastructure.
Following Hewlett-Packard Co.'s (HPQ) purchase of tech-services firm EDS, Dell
Inc. (DELL) and Xerox Corp. (XRX) have moved to boost their services offerings.
Meanwhile, software giant Oracle Corp. (ORCL) is still waiting for approval from
the European Union to complete its acquisition of Sun Microsystems Inc (JAVA).
EMC and Cisco, along with virtualization software maker VMWare Inc. (VMW),
have unveiled a partnership to design all-in-one products, leaving many in the
industry to speculate that NetApp could be the next target for companies such as
Dell and H-P that may want to boost their storage offerings.
Georgens said NetApp would continue to pursue acquisitions as well after
losing a bid for storage-maker Data Domain to EMC and said he would be willing
to spend more than the $1.9 billion offered for Data Domain in June if the right
opportunity emerged.
"For a bigger deal that justified a higher valuation, I think we could go
further than we did," he said.
-By Jerry A. DiColo; Dow Jones Newswires; 212-416-2155; jerry.dicolo@
dowjones.com
(END) Dow Jones Newswires
11-20-091634ET
Copyright (c) 2009 Dow Jones & Company, Inc.
|